In many travel-related web sites for airlines and hotels, there is some attempt to sting the customer with an extra fee by performing a currency conversion at an inflated exchange rate. Sometimes it is only about five percent and this may not appear to be a lot but in one case a hotel was trying to use a rate that increased the cost of my booking by 30%. This scheme/scam is referred to as Dynamic Currency Conversion (DCC). Sometimes the website says that they are making it "easy" for you by giving you a "guaranteed" exchange rate that "might" be better than the rate from your bank. Sometimes a hotel or restaurant in a tourist location insists that you have to pay in a currency that is not the same as the currency on your booking receipt or their menu card, this is also a DCC situation.
Reality check: these DCC rates are universally bad. Last time I checked, my own credit card only has a 0.9% fee for currency conversion. Credit card companies have become a lot more competitive but the travel industry hasn't.
Airbnb often claims that they want to help the little guy and empower people, at least that is the spin they were using when New York city authorities were scrutinizing their business model. Their PR blog tries to boast about the wonderful economic impact of Airbnb.
But when it comes to DCC, the economic impact is universally bad for the customer and good for Airbnb's bosses. Most sites just turn on DCC by default and add some little opt-out link or checkbox that you have to click every time you book. Airbnb, however, is flouting regulations and deceiving people by trying to insist that you can't manually choose the currency you'll use for payment.
Fortunately, Visa and Mastercard have insisted that customers do have the right to know the DCC exchange rate and choose not to use DCC.
What are the rules?
Looking at the Visa system, the Visa Product and Service Rules, page 371, s126.96.36.199 include the statement that the merchant (Airbnb) must "Inform the Cardholder that Dynamic Currency Conversion is optional".
The same section also says that Airbnb must "Not use any language or procedures that may cause the Cardholder to choose Dynamic Currency Conversion by default". When you read the Airbnb help text about currencies, do you think the language and procedures there comply with Visa's regulations?
What does Airbnb have to say about it?
I wrote to Airbnb to ask about this. A woman called Eryn H replied "As it turns out we cannot provide our users with the option to disable currency conversion."
She went on to explain "When it comes to currency converting, we have to make sure that the payments and payouts equal to be the same amount, this is why we convert it as well as offer to convert it for you. We took it upon ourselves to do this for our users as a courtesy, not so that we can inconvenience any users.". That, and the rest of Eryn's email, reads like a patronizing copy-and-paste response that we've all come to dread from some poorly trained customer service staff these days.
Miss H's response also includes this little gem: "Additionally, if you pay in a currency that’s different from the denominated currency of your payment method, your payment company (for example, your credit or bank card issuer) or third-party payment processor may apply a currency conversion rate or fees to your payment. Please contact your provider for information on what rates and fees may apply as these are not controlled by or known to Airbnb." and what this really means is that if Airbnb forces you to use a particular currency, with their inflated exchange rate and that is not the currency used by your credit card then you will have another currency conversion fee added by your bank, so you suffer the pain of two currency conversions. This disastrous scenario comes about because some clever person at Airbnb wanted to show users a little "courtesy", as Miss H describes it.
What can users do?
As DCC is optional and as it is not clear on the booking page, there are other things a user can do.
At the bottom of the Airbnb page you can usually find an option to view prices in a different currency. You can also change your country of residence in the settings to ensure you view prices in the host currency. This allows you to see the real price, without the DCC steal.
People have been able to email or call Airbnb and have DCC disabled for their account. Not all their telephone staff seem to understand these requests and apparently it is necessary to persist and call more than once. In the long term, the cost savings outweigh the time it may take even if you spend 20 minutes on the phone getting it fixed.
Whatever you do, with any travel site, print a copy of the information page showing the price in host currency. After doing that for an Airbnb booking and before making any payment, send a message to the host quoting the total price in their currency and stating DCC is not authorized. If Airbnb does wrongly convert the currency, send a letter to the credit card company asking for a full refund/chargeback on the basis that the transaction in the wrong currency was not an authorized transaction. It is important to ensure that you do not agree to the payment using Verified-by-Visa or Mastercard Securecode and do not pay with a debit card as these things can undermine your chances of a successful chargeback.
The chargeback rules are very clear about this. On the Visa website, the Guide for the Lodging Industry describes all the chargeback reason codes. On page 46, reason code 76 is described for cases such as these:
- Cardholder was not advised that Dynamic Currency Conversion (DCC) would occur
- Cardholder was refused the choice of paying in the merchant’s local currency
If you feel that Airbnb's web site was not operating in compliance with these rules, while many other web sites have made the effort to do so, why shouldn't you demand a correction by your bank? Once enough people do this, don't be surprised if Airbnb fixes their site.