Tuesday 15 June 2021

Billing Dollars And Charging In Colones Is A Common Practice in Costa Rica

Businessman paying in dollars

Quoting and billing in US dollars and charging or receiving payment in colones is a common practice in Costa Rica.  Retailers, cable companies, ICE and the immigration service are some examples where prices for their services are quoted in dollars, but when it comes time for payment, it is collected in colones.

Another common practice is giving back change in colones when a cash payment is made is dollars.

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So, why is it that the consumer cannot pay in dollars when they are being billed in dollars?

Yes, you can.

According to La Nacion who spoke to the director of the director of the Dirección Nacional,del Consumidor del Ministerio de Economía (Directorate of the Ministry of Consumer Economics), Cynthia Zapata, Article 48 of the Ley Orgánica del Banco Central, gives the consumer the option choose the currency to make payments.

Zapata explained that the law provides that,contracts and financial obligations in foregin currency are valid, effective and enforceable, but may be paid at the option of the debtor, in colones, computed at the current exchange rate.

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This means that the consumer can pay in dollars or colones. The key word, explains Zapata, is “may be paid”.

However, in real practice it doesn’t appear as such.

It is almost impossible to find a situation where the bill due is in dollars and payment is accept in dollars. Even more, getting back change in dollars.

The list of examples of billings in dollars is long. Cable compaines like Tigo bill their internet services in dollars, then convert the payment to colones at the exchange rate at the time of the billing.

The Institutio Costarricense de Electricidad (ICE) quotes its international calling minutes in US dollars, yet it bills in colones.  Click here for the ICE long distance rates.

Another example of a government agency billing/quoting in dollars is the immigration service. On its website, the Dirección General de Migración y Extranjería sets a price of US$56 (plus ¢250 colones) for a Costa Rican passport. Yet, payment at the Banco de Costa Rica (BCR) is accepted only in colones. That is, you can use dollars to pay, but the teller exchanges the dollars to colones to cover the US$56 at the current are of exchange and then hands you back change in colones.  The state bank (BCR) says the immigration service sets the rate in dollars, yet, according to Alejandro Acón, manager of División Institucional , told La Nacion that immigration’s bank account is in colones.

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A number of retailers have begun the practice of quoting prices in dollars. At the authorized Apple stores, for example, the price of an iPad and other products is quoted in dollars. And while you can pay in dollars, try to get change back in dollars.

Using a credit card is one way to pay in dollars in Costa Rica. However, you must ask, if the charge will be in dollars or colones and then be specific you want the charge in dollars. The majority of charge card processing machines in Costa Rica have the ability to charge in either dollars or colones, but not all.  Ask before, especially if you have a U.S. issued credit or debit card. Having the charge in U.S. dollars avoid the head beating financial institutions give their customers on the exchange rate.

One issuer, Payoneer, for example, not only charges its customers for the use of their debit card (your money) but beats up its customer on the exchange rate, that can be as much as ¢20 or ¢30 colones below the current day rate.

This is very confusing and frustrating for foreigners visiting or living in Costa Rica.

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We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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