Correct, on SXM, the conversion rate is whatever the merchant chooses to set it at and is not pegged to the "official" exchange rate.
As it should be. The US Dollar is not the legal currency. And merchants are not banks. If you want to use US dollars then I guess you have to accept the rate the merchant chooses. You can always show up with some Euro, as we do. Or choose to to shop elsewhere if you don't like the rate.