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Mexico restricts use of U.S. dollars

by Andrea Sachs - Nov. 3, 2010 05:51 PM

Washington Post

Travelers, be aware: Your freewheeling days of spending U.S. dollars in Mexico are over.

In October, the Mexican government passed a law restricting how many greenbacks Americans can exchange south of the border.

The new magic number: $1,500 per month.

In addition, certain states, such as the resort haven of Quintana Roo (Cancun, Cozumel and Playa del Carmen), are capping individual cash purchases at $100. AAA and other travel experts say some vendors may refuse dollars altogether.

"Despite the $100 restriction in many parts of Mexico, tour operators are warning customers that some businesses might not accept dollars at all," AAA spokesman John Townsend said in an e-mail, "and are suggesting that visitors stock up on pesos or travelers checks in the U.S. before flying south."

Townsend also said the law forbids Mexican airports and their occupants to accept U.S. currency "for anything," including checked-baggage fees. Air Transport Association spokeswoman Victoria Day said the organization's members are addressing the new law "individually."

Tempe-based US Airways, which has 18 daily flights from Phoenix to 10 Mexican cities and beach resorts, stopped accepting U.S. dollars at its ticket counters in Mexico in September. The airline notified customers in advance and has had no complaints, spokeswoman Valerie Wunder said. The airline still accepts pesos in cash and credit cards in both dollars and pesos. The airline also has a notice about the new policy on its website, and reminds passengers when they check in online.

JetBlue now takes only credit cards and pesos for expenses incurred in Mexican airports; American Airlines has established a similar policy.

The government enacted the change to control the number of dollars entering the country's banking system, hoping to curb drug-related money laundering.

The law does not limit credit-card or debit-card transactions, or ATM withdrawals of pesos. Nor is it stymieing some regions' trade with American visitors.

Rita Wilcox has been to Rocky Point twice in the past two weeks and had no problem using dollars. The vice president of Rocky Point Reservations, a Phoenix-based hotel, condo and house-rental booking service, used cash at her favorite restaurant, La Curva, and at the grocery store.

"They accepted my dollars wholeheartedly,'' she said.

Wilcox said a resort operator with three properties in Rocky Point, including Sonoran Spa Resort, is also still accepting dollars.

"They have walk-ins all the time, and those Americans don't come down with pesos,'' she said. "They still take dollars freely.''

The response is similar in Baja California.

"Despite recent reports, hotels, restaurants, stores and other merchants in Baja California still gladly accept U.S. dollars," Juan Tintos Funcke, state secretary of tourism for Baja California, said in a statement. "Dollar bills are as welcome as pesos and credit cards across Baja California, everywhere a tourist would spend money."

The one concession: "For sales over U.S. $100 in cash, venues may choose to run multiple transactions without any problem."

Republic reporter Dawn Gilbertson contributed to this report.