5 Tourist SCAMS to Avoid in Iceland!

5 Tourist Scams you can find in Iceland and How to Avoid them!

Heyyy there! Are you travelling to Iceland and want to avoid being scammed by, lets say a taxi driver, an ATM or the currency exchange store at the airport, maybe get a crappy machine made woollen sweater (known as Lopapeysa) rather than the real deal? Well then you're at the right spot.

If you're like us and you LOVE discovering new places but the last thing you want on your dream trip is to fall into a tourist trap, then this is something you will find interesting. Scams can leave you feeling ripped off, embarrassed, or even in danger and nobody has time for that when they are on vacation!

Now, good news: Iceland is one of the safest and most honest travel destinations in the world. Seriously, you won’t find sketchy guys “cleaning your shoes” for surprise tips or rigged street games like in other big cities and the overall crime rate is one of the lowest in the world here.

But unfortunately, even paradise has its problems, so here are 5 tourist scams or touristy rip offs to steer clear of when visiting Iceland, so you can travel smarter and save your money in the best way possible.

1. Taxi Trouble - Good things to keep in mind

Unfortunately here in Iceland we do not have car services like Uber or Lyft. When using public transport in Iceland it is just taking a taxi, renting electric scooters like Hopp and Bolt or taking the bus.

But recent rule changes from the government have made it easier for anyone to start a taxi company, which has led to some shady operators charging outrageous fares to customers and especially tourists that are not familiar with how things work in Iceland.

*Disclaimer - These are the prices as of July 2025 and they can change*

Here’s how to avoid getting ripped off:

• Ask for the price before hopping in and especially for airport transfers.
• Standard airport transfer is (as of July 2025): 22,500 ISK ($174 USD) for a 4-seater taxi from Keflavík airport and to Reykjavík.

In-town starting fares should be around:

• 810 ISK for a 4-person taxi
• 1,050 ISK for larger ones

Unfortunately we have heard some horror stories of people seeing a starting fare of 9,000 ISK ($70) when getting into random cabs. Don’t let that be you and be aware that since you are a tourist, you are probably more likely to get into a situation where you might be scammed.

But overall, taking a taxi in Iceland is very safe and this is just a small population of dishonest taxi drivers that are ruining the good reputation for the honest and fair taxi drivers that we have here.

Pro tip: Stick with trusted taxi companies like Hreyfill and BSR taxi and always check the starting meter before the drive starts.

2. Pickpockets in Iceland

Yes, you heard it right. Iceland is still an incredibly safe country and actually the safest country in the world for the past years but for the first time ever, we have had a few unfortunate reports of pickpocketing. These rare incidents have primarily occurred in popular tourist hotspots such as:

• Rainbow Street in Reykjavík
• Golden Circle stops
• By Hallgrímskirkja Church

But there is no need to panic, just be smart and stay alert:

• Keep phones, cameras and wallets in front pockets or zipped bags
• Stay alert in busy and crowded places

We walk up and down Rainbow Street daily on our Reykjavík Food Walk and we have never had any issues regarding this for the past 10 years we have been operating that tour. But hey, better be safe than sorry, right?

3. Airport ATM's & Currency Exchange

Stop right there my friend! You don’t need to exchange your money to the Icelandic Króna (ISK) or pull out cash when you land at Keflavík Airport unless of course you want to.

Literally everywhere in Iceland we accept credit cards or Apple Pay. That includes small cafés, gas stations in the middle of nowhere, and souvenir shops.

The exchange booths and airport ATMs can unfortunately be total rip offs. They tack on steep fees for money you probably won’t even use since cards are accepted everywhere here.

Of course, if you want to have cash with you, that is totally fine and some people just like to use cash instead of credit cards. In Iceland we do not have a tipping culture like in the United States for example but we do of course accept cash tips from tourists if they want to tip, but just remember that it is definitely not mandatory to tip people in Iceland.

4. Always Pay in Local Currency

This one can be sneaky and I have actually made this mistake myself when travelling in other countries.

When using your card abroad, some payment machines offer you an option and ask if you want to pay in your home currency (like USD or EUR for example) or pay in the local currency (Icelandic Króna, ISK) in this case.

If you choose to pay in your own currency, you would be making a big mistake because that option usually comes with terrible exchange rates and hidden fees, so I would recommend that you always choose ISK (Icelandic Króna) when paying for something in Iceland, it’s cheaper 99% of the time and what is a better feeling than saving money when buying things huh?

5. Puffin Shops (a.k.a. Tourist Trap Central)

You’ll see ‘em everywhere in downtown Reykjavík. Puffin hats, Viking helmets, overpriced and mass produced mugs and sometimes not so Icelandic souvenirs.

They sure can be fun but if you're after something authentic from Iceland, try these spots instead:

• The Handknitting Association of Iceland (on Rainbow Street): High-quality, hand-knit Lopapeysa sweaters made by real Icelandic knitters. Each one is unique!
• Kolaportið Flea Market: Open on weekends and full of vintage Icelandic treasures, quirky finds, and local charm right next to the famous hot dog stand.
• Rammagerðin store is also great for buying authentic Icelandic products and it is located in downtown Reykjavík.

Skip the plastic puffins and go home with something that actually tells a story and will last you forever.

If you follow these steps and recommendations that we have listed then you’re officially scam savvy and ready to take on Iceland like a local.

Wanna make the most of your trip? Join our award-winning and absolutely delicious Reykjavík Food Walk on your first day. It's the best way to explore the city, eat like a true Viking and kick things off with good vibes and great people.

Hopefully you found this information, tips and tricks helpful and we would not want anything else than to make your Iceland memories scam free and full of epic and memorable moments.