Dynamic Currency Conversion: the airport fee you can refuse
DCC is the quiet 4-7% markup that terminals and ATMs ask you to accept. Here is why they ask, why you should say no, and how to spot the trick.
You are standing at a Prague airport ATM, pulling 3,000 CZK. A screen pops up: "Would you like to be charged in your home currency (EUR) at a rate of 1 EUR = 23.1 CZK?" Yes or no? The right answer is always no, and here is why.
What DCC actually does
Dynamic Currency Conversion lets the ATM or terminal convert the local-currency amount to your card's home currency and bill you in euros. On the surface this seems helpful: you know the exact euro amount. In reality, the exchange rate they use is 4-7% worse than what your bank would apply, and the fee is split between the terminal operator and your card scheme.
Why it keeps happening
Terminal operators earn margin on DCC. Many staff at hotels, restaurants, and taxis genuinely do not know what the prompt means — they default to "yes" when you ask. The design pattern is intentionally confusing: the "home currency" option is often prominent and the "local currency" option de-emphasised.
What to say
"Please charge me in local currency" — simple, works at any terminal in Europe. At ATMs, always decline when the "convert to EUR?" screen appears. Your bank will convert at its own rate (typically Visa/Mastercard's near-mid-market rate with a 0.3-1% markup).
The math
On a €200 restaurant bill in Prague, DCC adds about €10-14 of hidden fee. Over a two-week trip with daily DCC acceptances, you can lose €200+ to a prompt you had no reason to say yes to.
If you accidentally accept
You cannot reverse it. The transaction is already marked as "already converted". The best you can do is remember for next time.