The currency of Mexico is the Peso. In high tourist areas, you can pay with dollars and get change in dollars. US dollars are actually the main form of currency in the downtown of Cabo San Lucas, with prices usually listed in American dollars instead Pesos. ATM machine dispense cash in Pesos, not dollars. Shops and restaurants accept credit cards as in the US. You should call before you come and tell your card company where you will be in Mexico and for how long. When paying by credit card, clearly write whether the amount is in dollars (“USD”) or pesos.

When paying in dollars and getting change in Pesos, exchange rates tend to fluctuate from place to place. As with the rest of the world, a common tourist problem in Cabo is short changing of tourists. Most short changing is done when you pay in dollars and getting change in Pesos. You can always ask for your change in dollars in advance.

Mexican gas stations are notorious for short changing of tourists. Mexican gas stations are full service. Most Mexican gas stations do not take credit cards. It is traditional to tip the attendant, but not the usual US tip; a real tip, as in “keep the change.” If you pay in dollars, do not expect change in dollars at gas stations . The best way to avoid short changing at gas stations is to pay for gas in pesos.
Just as American cash seems to be flowing into Cabo, a good chunk of money is apparently flowing right back where it came from.