Toni explains why you should pay in local currency when vacationing to avoid this scam:
Last week I read in an English newspaper about a long-running currency scam often played on unsuspecting British tourists on the Continent and apparently also in the USA. Whether paying in cash or by credit card, tourists are asked if they want to pay in their own currency, which many people opt for. Trouble is, they usually aren't told the rate of exchange on offer until the credit card payment has gone through, or the anticipated change doesn't come back. (Obviously, if you get less cash back than you think you should, you can complain on the spot or ask to pay in the local currency.) The exchange rate is being decided by the vendor rather than the bank, and the rate is usually appalling. Sometimes the vendor processes the tourist's own currency on the credit card without giving the tourist any options.
This is called Dynamic Currency Conversion (DCC) and is perfectly legal. You are supposed to be given the choice as to the currency you pay in, but this often doesn't happen.
I'm here to tell you however, that it can happen to tourists in the UK too. While waiting for our flight back to Chicago, I took my kids for lunch in one of Heathrow's many restaurants. The bill came, and it listed the price in Pounds sterling, Euros and Dollars. Now, granted, I was given the option to pay in any of these three currencies, and since I was running dangerously low on pounds, I pulled out my dollars. And then I saw the price. Despite the exchange rate being about $1.60 to the pound that day, the bill (40 quid) was just over $80!
And apparently I'm not the only one. Here's someone else who was almost ripped off in Scotland.
So - to avoid arbitrary conversion rates, decided not my your bank or credit card, but by any Tom, Dick or Harry,- pay in local currency when you can.
13 hours ago