Business Math + Banker's Math II: The Shoe That Didn't Drop

In my first installment in this series I recounted how Budget Rental Car padded their CEO's bonus by adding 4% to my rental bill in Italy for a foreign currency conversion charge, even though I thought I was avoiding it by using my Capital One credit card.  Apparently I had agreed to this fee when I signed my contract in Italy, though I don't recall reading it there and unfortunately I've misplaced the contract and can't check the exact wording.

I contacted Budget's Customer Service and asked how I could avoid this in the future, particularly since I had reserved two more foreign rentals, this time in Chile.  I'll let you go to the first blog the read the email exchange that ensued in which I received confusing and contradictory advice, ending with the rather astonishing admission that there is no universal policy about this fee:

Budget: Thank you for contacting Budget. Budget locations in Italy and in Chile are independently owned franchise locations and may have different policies in place which deviates from standard policy. As advised, renters are to make their currency request [my emphasis] at the beginning of the rental. We apologize for any misunderstanding or inconvenience. If we can be of further assistance, please let us know.

As I pointed out previously the problem with "making a currency request" is that in one Budget email I was advised to request that the charge be in local currency, and in another email told to request that it be in U.S. dollars.

I gave it one last shot by contacting the Customer Service people in Chile directly:

Me:  My wife and I have reserved Budget cars in two locations for our upcoming trip to Chile:  Santiago (#xxx192US3) and Puerto Montt (#xxxxx5US1). I would like to avoid any currency conversion charges for these two rentals by Budget.  My credit card does not assess these and I would like to take advantage of this feature.

 How can I be certain that Budget will not assess me currency conversion charges?

 After considerable delay I received the following reply:

Budget Chile:  Dear Mr. Richard Sherman: According your request, inform you that is difficult for us confirm that you will not have any currency conversion charges, because we do not have any control over foreign banks, also our values and charges are systematized, maybe you could leave the guarantee with your credit card and pay of lease in cash.

 Everybody clear?

My interpretation of Budget Chile's email is that either (a) they were being deliberately unhelpful and if I wanted to avoid the Budget charge I would have to obtain wads of Chilean Pesos to pay the final bill, or (b) they had no idea what I was talking about because they never levied conversion fees themselves, unlike the Budget folks in Italy.

I went ahead with these rentals last month when we visited Chile, mainly because Budget's rates were very competitive and because I felt prepared to do battle over this.  Each time we picked up our car I asked the agent if there would be any additional charge for converting Pesos to Dollars, and I asked the same question again when we returned the cars.  All four times the answer was "no."

Of course, the proof is in the credit card statement, and so I have been waiting to see what the final charge amounts would be, as compared to the official exchange rates. The answer is now in, and to be "fair and balanced" (I can't believe I just said that), I have to report that Budget Chile did NOT add a conversion charge!

The lesson here is to travel to Chile and avoid Italy.  No, wait -- that's not it.  The lesson is that we consumers have to be constantly vigilant about business and banking practices in order to avoid unnecessary and unjustified charges.  And we can't become complacent just because we think we are prepared, like my use of a fee-free credit card. This becomes really difficult when you're in a foreign country and foggy from jet lag, but that's when you're most vulnerable.

Confusion, complacency and lack of information are a banker/businessman's best friends.

Lava Love: Geezers Gone Wild!

The airport in Kailua Kona, Hawai'i is built on top of a lava flow barely 200 years old.  Landing here is sometimes a jarring experience for tourists expecting waterfalls and rainforest because the landscape is instead a stark lava desert that looks a lot like dark brownie batter.  Of course we have waterfalls and rainforests too, but they are elsewhere on the island.

I live on the side of Hualalai volcano, one of five volcanoes that make up the mass of the island of Hawai'i (note, Waikiki and Honolulu are on a different island, not here).  Three of these are "active" volcanoes, meaning they are either erupting now (Kilauea, about 90 miles from my house), or are bound to erupt again in the future (Mauna Loa and Hualalai).  One of the remaining two is likely extinct (Mauna Kea, which has many world-class telescopes on its summit) and the other is quite dead (Kohala).

In short, there is a lot of lava around.

Most people assume that volcanoes erupt at their summit, often explosively, and lava flows down the sides in waves that gradually build the cone higher and higher as the lava cools.  But like many of our assumptions about lava, this one is very oversimplified.  For instance, another major way that Hawaiian volcanoes grow is by swelling from the inside as magma forces its way into cracks and crevices on its way to the surface.  Kind of like a pimple as it gets ready to "erupt" except that lava pimples are permanent and don't go away afterwards.

Another way is even more interesting, at least to a lava lover like me.  If a volcano erupts for a long enough period of time, it develops lava tubes, or conduits, through which the lava can flow for miles before being deposited on the flanks of the volcano.  The lava first forms channels, like stream beds or river beds, except that the force at work is thermal erosion, not water erosion -- the new lava melts its way into the older surface.  As the lava ebbs and flows in these channels the cooling sides get higher and higher and eventually close over the top, making an insulated route for lava to travel great distances before breaking out and coating the landscape.  The tubes can form a complex system in which they take different routes for a ways, then come together and diverge again, and each main tube can have many smaller side tubes. Also, newer flows can create tubes that enter older ones at a higher level making multi-tiered systems that resemble complex highway intersections.

When an eruption stops completely the lava in the tubes drains away, leaving empty conduits that can be as big as subway tunnels.  The cooling lava contracts and sometimes crumbles, collapsing the tube at its weakest points.  But long portions often remain intact.  For instance, the southern part of our island hosts one of the longest intact tube systems in the world, with over 32 miles of interconnecting underground conduits.  Shorter sections of tubes can be found in nearly all parts of the island.

To a near-geezer like me who wants to prove he is still young enough to do stupid and slightly dangerous things, these old tubes are irresistible.  For the past several years my hiking buddy from Oregon (also a near-geezer) and I have been exploring old lava flows and investigating the tubes that we can find.  Many of the tubes and openings are undocumented and unmapped and they aren't described in any guidebook.  They are also very difficult to find because the openings become hidden by vegetation or are in remote areas.  We've learned that some of the most unpromising-looking landscape can hold geological treasures, and we've become pretty good at reading the subtle clues in the terrain that may lead us to a great tube adventure.  It is terrifically rewarding to come across an opening and think that we used our wits (well, what's left of them) to locate it.  Very ego-boosting for near-geezers.

And getting inside is nearly always an awe-inspiring experience.  We're walking in the island's arteries, where 2000 degree molten rock once flowed and seeing the products of an unfathomably powerful geologic process from the inside!  Wow!

As lava flows through channels and tubes it spatters, splashes, and splatters, producing a limitless variety of fascinating swirls, drips, and globs that freeze in place as the lava cools.  [See my photos at the end of this blog for examples.] Some of these structures are extremely complex and delicate.  For example, the air movement that accompanies the flowing lava can produce a long drip that is needle-sharp and cools horizontally.  Gusts of air can also whip a long drip and stick the tip upward to form a loop or even a knot.  Some other features are

• lavacicles -- vertical stalactites from the ceiling of tubes.  These aren't formed by dripping water, though, but by the remelting of the ceiling as newer lava flows in the tube or by overhead intrusion of lava from a new surface flow over the old tube.
• stalagmites -- pillars of lava on the floor of a tube formed from lava dripping from the ceiling.  The heat in this case may come from new lava flowing over the top of the tube.
• bathtub rings -- newer lava flowing through a tube often leaves a "high lava" mark when it drains away.  Sometimes these are so thick they form benches along the tube walls.

I want to be clear that we are very respectful of the formations we find and try to be careful not to damage them.  And we never intentionally break off any of the features.

As rewarding as this activity is, there are also costs.  Hiking across a lava flow is a bit like using one of those balance boards at the gym -- the surface is uneven, unstable, and very unfriendly to aging muscles.  Moving through a tube sometimes requires a "duck-walk" strategy that aging knees really don't like at all.  And lava is really, really, really sharp.  Barely brushing against it can produce prodigious amounts of blood from delicate old skin.  Did I mention that "lava love" might be considered a bit stupid?

Complex drip patterns on side of a channel.

Look at how sharp and delicate this drip is!

A unique double-tipped drip.

Drip with tip stuck upwards. Hiking stick handle for scale.

Lavacicles

Figure this one out!!

Complex knobby drips with spatter on them.

More delicate complexity. Hiking stick for scale.

Alien hieroglyphs on side of tube.

Lava stalagmites deep inside a tube.

Great example of lavacicles.

Sharp lavacicles on ceiling -- don't bump your head!

Fabulous Synthetic Poop!

Last year I wrote about important scientific breakthroughs being made in understanding our microbiomes, the collection of trillions of bacteria that live on and in our bodies  -- see How About A Fecal Transplant?

One conclusion from this research is that our general cultural attitude that "the only good microbe is a dead microbe" is emphatically wrong.  We are very dependent for our health and well-being on these little critters, and in fact we can't exist without them.

The bacteria that colonize our guts are particularly noteworthy -- they enable us to digest food, synthesize certain vitamins, and fight off many infectious diseases. Normally the thousands of bacterial strains in our intestines form a complex ecological community in which competition among them is in balance. Of course, certain intestinal bacteria are quite harmful to us if they overwhelm the good guys, which can happen because of changes in diet, physical trauma, encounters with environmental toxins, or illness that weakens the immune system. One example is Clostridium Difficile, a strain of bacteria which can cause chronic severe diarrhea and other intestinal problems and is linked to 14,000 deaths each year in the United States. It is notoriously hard to treat.

In the past we have responded to Clostridium Difficile and other intestinal infections with a "nuke'm all" strategy of giving patients broad-spectrum antibiotics that kill both bad and good bacteria, not unlike a gardener spraying the entire garden with herbicide to get rid of weeds.  This has two unfortunate consequences.  First, the harmful bacteria become resistant to the antibiotics, requiring ever more powerful forms of treatments.  Second, wiping out the good bacteria destroys the normal ecological balance in the microbiome that can help keep the bad bacteria in check.

One very promising approach to these problems has been the fecal transplant, an "interesting" procedure in which the stool from a healthy donor is implanted in the intestinal tract of a patient with a bacterial infection, for example through fecal suppositories. The idea is that the healthy stool contains the complex collection of microbes needed to restart a depleted microbiome in another person. Despite what researcher Dr. Alexander Khoruts calls the "ick" factor, the procedure seems to work, particularly in Clostridium Difficile infections.

And now the really good news for those of us who have trouble with the concept of fecal suppositories, or in general with the idea that somebody else's poop can be good for us. A group of British and Canadian researchers reported just this month in the journal Microbiome that they have developed a successful new procedure that removes much of the "ickiness."  Their report has a catchy title:

"Stool substitute transplant therapy for the eradication of Clostridium difficile infection: ‘RePOOPulating’ the gut."

Who says scientists don't have a sense of humor?

The procedure is to take poop from a healthy donor, but instead of transplanting it directly to a recipient (thence the "ickiness), the bacteria in the poop are cultured in a laboratory and about 30 of the purified beneficial strains are combined to make "synthetic poop" that contains the bacteria but not the "ick."  The researchers call this material "RePOOPulate." Seriously.

The RePoopulate procedure has the advantage of allowing a high degree of control over the kinds and numbers of bacteria in the transplant.  This means the exact same treatment can be re-administered if necessary, and it also reduces the chances of inadvertently transferring diseases from the donor.  And once the bacteria have been cultured new RePoopulate can be concocted without a new poop donor.

This seems like a great advance to me, and you really have to give the researchers credit.  There is, however, just one teensy problem left to work on.  The transplant is performed during a colonoscopy.  For those unfamiliar with this procedure, see Dave Barry's famous essay on the subject.

Of course, I suspect if you are someone suffering from a Clostridium difficile infection you wouldn't think twice if a colonoscopy would end your suffering.

As for myself, I'm still hoping for a synthetic poop pill.
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Additional links for the scatologically inclined:

"How About A Fecal Transplant?"  My blog last year on this general topic.
"Stool substitute transplant therapy...."  The Microbiome journal article on synthetic poop.
"Artificial Poop Transplant May Fight Bacterial Infection:"  A somewhat more readable article in LiveScience about the procedure.
 "Microbes For Breakfast"  My previous blog on why eating microbes is good for you.

Taste Buds Are Wasted On The Young!

We were at Redd, a highly-touted restaurant in the Napa Valley north of San Francisco.  We hadn't planned to eat there -- usually it takes a reservation weeks in advance -- but the personnel at a nearby wine-tasting establishment suggested we try the restaurant's bar, which serves wonderful appetizers and doesn't require a reservation.  When we arrived we found to our surprise there was an unexpected open table in the main restaurant,  and we opted for that instead.

Good choice.

Early in the meal the waiter brought a special appetizer, complements of the chef. He described it as "yellowfin tuna tatar with asian pear, avocado, chili oil, fried rice, and cilantro."

Hmmm... "Tatar," of course means "ground up and raw." For most of my life the idea of eating raw tuna would have been acceptable only if I was stranded on a desert island and near death from starvation. Since moving to Hawai'i (which is most definitely not a desert island) and having access to excellent fresh seafood, I've found that certain types (not all) of raw or lightly cooked seafood have a texture and flavor that is amazingly tasty. But it isn't just the flavor of the fish that I've come to appreciate, it's also the subtle, complex and surprisingly unique flavors and textures that a talented chef can create in the total preparation of spices, sauces and other ingredients -- in this case the fried rice (actually more like puffed), the pear and avocado, and the chili oil and cilantro.  This appetizer had it all -- delicious!!

By the way, the rest of our meal at Redd was equally subtle, complex, and just as likely as raw fish to be something I would have shunned in earlier years:  chestnut soup with roasted apples and brown butter, a beet salad with gulf shrimp, pomegranate seeds, fennel, watercress and yucca chips, and a main dish of rare Sonoma duck breast with cranberry spaetzle, sunchoke, spinach, and duck consomme.  All terrific!

In my youth I had strong and rather simple taste preferences.  If it was salty, greasy, and over-cooked I liked it (well, except for liver & onions, but that's another blog).  My mother, who did most of the cooking in our family, was raised on a Midwestern farm and learned to prepare simple, straightforward, and very satisfying dishes like pot roast, pork chops, fried chicken, and baked ham.  Slightly more exotic were her tuna casserole, macaroni & cheese, meatloaf, spaghetti & meatballs, and Swiss steak.  The only fish dishes I can remember were pan fried trout and baked fish sticks, neither of which I liked.  Since we couldn't afford to eat at restaurants very often this was my culinary world for many years.

It wasn't really until my wife and I began traveling abroad, which we started doing shortly after we were married and have continued ever since, that I was exposed to different and more complex food.  These travels also introduced us to cultures where the preparation, presentation, and enjoyment of food was a highly developed norm, like Italy and France.  About the same time we joined a "gourmet" dinner group that met several times a year.  Each dinner menu was chosen by a committee and different dishes were assigned to different members for preparation.  The result was a combined meal that would have been very difficult for any single person to produce, and it offered us the chance to sample a number of dishes we would not have attempted for ourselves.  It also produced social pressure to at least taste foods I never would have tried on my own. As our experience grew my wife became an adventurous and accomplished cook and her enjoyment of preparing a wide range of dishes means that we eat very, very well at home these days.  I pay for her efforts by being the clean-up crew.

Another contributing factor to my willingness to seek out new dishes is that my wife and I never order the same thing in a restaurant.  We pick things from the menu that we will share, and usually we look for interesting items on the appetizer menu.  For instance, we might have two or three appetizers and one main course.  That way we get to try more things and compare our reactions.

So over the years my appreciation for well-prepared, creative, subtle and complex food has grown stronger and stronger. It was a slow process with many dead-ends, disappointments and sometimes unfinished dishes.  But frankly I'm glad it took so long because now I think I value good food even more and don't take it for granted.  An illustration of my evolution is that one of my favorite recent movies is the 2007 Disney animated film Ratatouille, in which a Paris rat (yes, RAT) dreams of becoming a world-class chef.  His family naturally doesn't understand his odd appreciation for food that isn't garbage.  One scene I particularly like occurs early in the movie, when the main character (Remy) tries to explain to one of his brothers the magic of food and flavor.  Different flavors can be wonderful when tasted separately, he points out, but when they are combined in just the right way they produce something greater and infinitely more enjoyable than any single ingredient.  His brother nods in feigned understanding and then returns to eating his garbage.

I need to make it clear that there are limits to my culinary explorations. First, I'm not eager to try anything just because it's different or exotic or I've never eaten it before.  My threshold for organ meats, for example, is very, very high.  And just because someone exclaims how good something is isn't enough -- some people will eat ANYthing.  Second, I'm too cheap to ever enjoy a $200+ meal -- my palate can't possibly be refined enough to consider that worthwhile.  In fact, some of the best food I've had has been at rather modest places.  For instance, another meal we enjoyed beside the one at Redd on our California trip was in a small family-run restaurant that served some of the best Mexican food I've ever tasted -- total cost $10.  Third, I choose not to eat certain kinds of food for philosophical reasons -- see my blog on The Reluctant Carnivore Diet.

According to the NIMH's Medline, when we are young have about 9,000 taste buds on our tongues that detect flavors.  Unfortunately this number decreases after age 40-50 for women and 50-60 for men, and those taste buds that remain atrophy.  Sensitivity to the four tastes -- salty, sweet, bitter and sour -- often decreases beginning around age 60.  The exact reason for this decline isn't known: "Studies about the cause of decreased sense of taste and smell with aging have conflicting results. Some studies have indicated that normal aging by itself produces very little change in taste and smell. Rather, changes may be related to diseases, smoking, and environmental exposures over a lifetime."  To the best of my knowledge, there isn't anything you can do to stave off this decline.

So the sad fact is that I now have the experience and appreciation for good food that has taken me most of my adult life to acquire, yet my tasting equipment may be wearing out!  This isn't certain -- the loss of taste buds may not get to the point of interfering with my enjoyment of eating, but the possibility isn't pleasant to consider.

When I was young I may have had 9,000 taste buds but I really didn't know enough to put them to good use. As I now begin to lose them, for me the conclusion is clear:  Taste buds are wasted on the young!

Bah, Humbug! (Sort Of)

I am decidedly ambivalent about the holiday season.

As a child I can remember being so excited that I was unable to sleep on Christmas Eve.  Everything was so special -- the decorations at our house and around the city, the presents under the tree, the Christmas music on the radio and in the shopping malls, the heartwarming holiday specials on television, the dozens of Christmas cards we sent and received.  Although my family wasn't devoutly religious, we usually attended midnight mass on Christmas Eve at our local Episcopalian church.  Christmas day was a hectic family affair that started with opening presents, followed by dinner in mid-afternoon with in-laws and relatives, more exchanging and opening of gifts, then socializing until 8 or 9 o'clock.  All in all this was a very intense and long day.

The next day was a big let down.  I can remember getting together with neighborhood friends to compare gifts and to play with each other's stuff.  But the big thrill was over and it seemed anticlimactic.  Amazing what a difference 24 hours can make -- from heartfelt joy, eager anticipation, and warm fuzzy emotions to a kind of emptiness, deflation and a feeling of  despondency.  And those presents I had wanted so badly almost never lived up to my expectations.

As an adult I have to fight a tendency to become a bit depressed during the holiday season.  It's not that I'm a Scrooge at heart -- I really would like to feel the holiday spirit and experience those warm fuzzies again.  But it is hard to do when retailers start their holiday push even before Halloween, Christmas carols are used to sell merchandise rather than express holiday sentiments, and buying gifts is evaluated in terms of contribution to GNP rather than as a gesture of caring.  It seems commercialized, shallow and insincere.

And of course it is hard to reconcile the messages of goodwill and peace with pervasive international conflict, and with the exploitation, denigration and ruthless subjugation of large segments of the global population. If we could act like it was Christmas Eve throughout the year these problems might disappear. But I fear we are more likely to act like it was the day after Christmas.

To end on a more positive note, and to illustrate my ambivalence, not just negativity toward the holidays, I'll offer this thought:  maybe capturing the spirit of the season shouldn't be easy.  Maybe the challenge of overcoming the obstacles, of seeing past the commercialism, conflict, and shallowness can lead to a more significant personal and social experience.  I think it's worth a try.

Business Math + Banker's Math: 0 = - 4

That's right, Business Math.  In my previous series of Banker's Math blogs I have railed against some of the practices of the banking industry that I consider excessive, like 9% ATM fees and unnecessarily high mortgage refinancing costs. Today's topic, though, is an example of how business calculations in conjunction with banking practices can sneakily take more money out of your pocket.

My wife and I travel internationally quite a bit.  As I've mentioned before, we've managed to minimize fees for transactions in foreign currency by using a credit card that waives the usual 3-4% extra charge and an ATM card that doesn't have fees on our side of the transaction.  For the past several years this has worked out well, and we've probably saved hundreds of dollars.

But after our most recent trip -- a very enjoyable three weeks in northern Italy -- I discovered a new wrinkle in the foreign transaction boondoggle, this time by a U.S.-based rental car company, not a bank.  Of course, rental car companies have long been notorious for some pretty sleazy practices, so maybe this should not have been a surprise.  But after researching this more thoroughly I have learned that a number of businesses, including local merchants are also joining in.

The practice is known as DCC, or "Dynamic Currency Conversion."  A merchant can bill you in local currency, say Euros, then convert the amount to Dollars through a financial services company, add on 3-4% and charge your credit card the total dollar amount.  Merchants make money off of this because they keep the conversion charge (minus some fees they have to pay to their financial services company).  If you have a credit card that charges international transaction fees (ours doesn't but most do), you could also pay your own company another 3-4% even though they didn't do the conversion because the fee is for any transaction that goes through a foreign bank regardless of currency.  Total cost of the charge then is 6-8%.  And this may happen even without you being aware of it.

In our case we rented a car from Budget which we picked up and returned in Milan.  When we turned in the car the agent gave us a receipt in Euros which was the exact amount we had been quoted when reserving the car online, and so we were satisfied. We left thinking our credit card would be charged the total on the receipt, in Euros, with the conversion to Dollars handled by our credit card company for which there would have been no fee.  Nope.  When the charge appeared on our statement it was 4% higher than it should have been.

I emailed Budget's customer service and asked why the amount was too high.  Here are excerpts from the subsequent exchange.

Budget: Thank you for contacting the E-mail Customer Service team.
I truly apologize for the inconvenience and confusion; however, the total indicated on the final rental receipt is showing as 399.59EUR which was converted to 548.21USD.  Please note that, because the conversion to be made by AvisBudget was signed for on the rental agreement rather than allowing your banking institution to process it, an additional 3-4% conversion fee was also assessed.  This may explain the slight difference after conversion.  I hope this information helps clarify.

Badabing!  In other words, I apparently agreed to this when I signed the rental agreement though I don't recall seeing it in the fine print (unfortunately I can't find my copy of the contract to check) nor is it to be found anywhere in the online conditions listed when you reserve the car.

So, is it possible to avoid this? 

Me:  Thank you for your fast reply.  Is there any way I can avoid this additional 3-4% in future international rentals with Budget?  I have a credit card that explicitly waives international transaction fees and I would like to take advantage of it (I thought I was doing so in this case).  If other companies allow the rental to be processed by my banking institution then I will likely use them instead. 
Budget: Thank you for contacting the E-mail Customer Service team. When you get to the counter to pick up your rental you need to tell them that you do not want to be charged in US dollars. This way you will be charged in the currency of the country and your credit card company will do the conversion. If we can be of further assistance, please let us know.

There you go, all you have to do is ask.

Maybe.

Fast forward to planning for a trip next year to Chile, where we are going to rent cars in two different locations.  Budget does business in Chile and our research found their rental rates to be competitive.  Encouraged by Budget's emails we reserved cars with Budget, but I thought I'd check on the conversion policy just to make sure I had it right. So I emailed customer service again.

Me: I have reserved Budget cars in Chile for our trip next year and will use a U.S credit card to pay for the rentals.  How can I make sure that the currency conversion from CLP to USD will be handled by my Credit Card issuer rather than Budget?
Budget: Thank you for contacting the Budget E-mail Customer Service team. You will need to request that you are billed in USD when you arrive at the location to avoid this. [my emphasis]

Whoa! Note that this is exactly the opposite advice I received earlier (and very likely wrong).  Confusing?  I wrote back pointing out my experience in Italy and asking if the conversion policies were different in Chile.  Here's the reply.

Budget: Thank you for contacting Budget. Budget locations in Italy and in Chile are independently owned franchise locations and may have different policies in place which deviates from standard policy. As advised, renters are to make their currency request [my emphasis] at the beginning of the rental. We apologize for any misunderstanding or inconvenience. If we can be of further assistance, please let us know.

Not helpful.  The advice is for renters to make their currency request at the beginning of the rental.  But which request?  Dollars?  Local Currency?  Do you still sign the same contract?  If you do sign it what recourse do you have later if they don't follow your request?  What do you do if they refuse? Try on the spur of the moment to rent from another company?

Well, at least the customer service person was polite.

Now I know some of you are saying,  "Just use a different company."  But a little internet research reveals that others do this as well.  For example, I found a forum exchange from 2010 in which Hertz did exactly the same thing to a customer.  And as my email exchange above shows, it isn't easy to find out a company's policy in advance, even if you contact them directly and ask.

And now for the coupe de grace. On Budget's web site they offer to show you the estimated total for your rental in either dollars or in pesos.  If you reserve your car based on the dollar estimate, then show up and get them to charge you in pesos instead (thus avoiding DCC), what rate do they use to calculate the pesos total?  Answer:  compared to the global standard rates available on www.xe.com, Budget adds 1 %!!  (It could be worse -- Thrifty adds 2%).  So even if you pay in pesos and use your no-fee credit card, you will still pay at least 1% more.

There you go.  My smugness in thinking I had achieved a consumer victory by using a credit card with no international transaction fees was unjustified.  In Business Math + Banker's Math: 0 (no fees) = - 4 (gotcha anyway!).

I'll let you know how the Budget rentals in Chile turn out.
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Here's some additional reading on this topic if you're interested:

• A succinct statement of the practice and the potential problem: http://www.cardhub.com/edu/dynamic-currency-conversion/
• A statement by FEXCO, a financial services company to merchants touting the benefits of the DCC program.  FEXCO was apparently the company that came up with this wonderful "service" back in 1996:  http://www.fexcoms.com/products/dynamic-currency-conversiondcc/
• A statement by KeyBank, a major financial services company in the U.S. and Europe, touting the financial benefits to merchants and supposedly to customers:  https://www.key.com/business/collecting-payments/dynamic-currency-conversion-banking-service.jsp 
• A 2008 forum discussion started by a credit card holder describing the difficulties in trying to opt out of this practice:  http://www.flyertalk.com/forum/credit-card-programs/916377-dynamic-currency-coversion-should-illegal.html
• A 2011 blog that offers a critical look of the DCC practice from the consumer's point of view.  Includes a reader who had a similar experience as ours with Dollar Rental Car: http://www.askmrcreditcard.com/creditcardblog/the-foreign-conversion-scam/
• A 2005 study by a consulting firm regarding DCC's acceptance by merchants and customers: http://www.psel.co.uk/pdf/articles/acquiring/dcc_myth_vs_reality.pdf

Breathing Again .... Again

Four years ago November 5th I wrote that I was Breathing Again after the divisive and derisive campaigning of McCain and Palin failed to win the White House for the GOP and Obama was elected by a substantial margin.  I also cautioned, however, that the euphoria over his election was likely unwarranted by political reality -- though at the time I didn't foresee the magnitude of the obstructionist tactics the GOP/Tea Party would employ to limit his effectiveness.  During this campaign I was holding my breath again because the strategy of Romney/Ryan was working and it seemed there was a very real prospect of not only a GOP president but also both House and Senate controlled by fiscal and social conservatives with no interest in compromise or consensus (recall John Boehner's adamant rejection of the word "compromise").  And so I'm breathing again....again.

But once again I'm not euphoric.  It is clear that nearly 1/2 the nation's voters saw Romney and Ryan in a positive light and therefore any solutions to the nation's economic and social problems have to consider their conservative viewpoints.  There was no mandate given here, other than through the polls that repeatedly show that most Americans want government to solve problems, not remain paralyzed by unbending adherence to a single philosophical agenda. And I can hardly be encouraged by the fact that this election may have simply maintained the status quo in congress of the last two years which showed a stunning inability to solve anything.

It is correct to say that our congressional leaders have become polarized and the distance that must be bridged in order to reach agreement is greater than it has been in a long time.  However, the GOP has moved farther to the right than the Democratic Party has to the left.  There was a time when I could have accepted a GOP dominated government because accommodation and negotiation (aka "civility") were still the norm.  But not now.

Maybe the positive impact of the election will be in causing the GOP/Tea Party to re-examine its position on the political spectrum and its relationship to a broader electorate.  Michael Gerson of the Washington Post recently offered an analysis of this possibility that I think is very insightful and I'll close with his words:

Some of the most important intellectual groundwork is needed on the role of government. Mitt Romney had a five-part plan to encourage job creation. He lacked a public philosophy that explained government’s valid role in meeting human needs. Suburban women heard little about improved public education. Single women, particularly single mothers, heard little about their struggles, apart from an off-putting Republican critique of food stamps. Blue-collar workers in, say, Ohio heard little about the unique challenges that face declining industrial communities. Latinos heard little from Republicans about promoting equal opportunity and economic mobility.

Neither a vague, pro-business orientation nor tea party ideology speaks to these Americans — except perhaps to alienate them. Conservatives will need to define a role for government that addresses human needs in effective, market-oriented ways. Americans fear public debt, and they resent intrusive bureaucracies, but they do not hate government.  [Emphasis added]

 We'll revisit this topic in another couple of years to assess if the situation has improved.  In the meantime I'll keep breathing, but I will also keep my fingers crossed.