While I love Europe for its history, architecture, food, and culture, let’s be real – one of the best things about a European vacation is the opportunity to shop! It’s the only place where this American can buy European designer goods at a discount. Hello, Louis Vuitton, Chanel, and Christian Louboutin!
Here’s what you need to know to make sure you get a good deal:
- Even though prices are in euros, they are usually still less than the price you would pay if you bought them in the US.
- Prices are not the same all over Europe so if you’re on a multi-country holiday, it may pay to wait to buy. Prices tend to be lowest in the country of the designer’s origin. For instance, Chanel will be cheaper in France than in Germany and Mulberry will be cheaper in Britain than in France.
- Do your research beforehand so you know how much the item is in USD; this is the only way to calculate your savings!
- Make sure to bring your passport or at least a copy of your passport so that you can get the Value Added Tax (VAT) refund – this is key!
Ahh, the VAT. Getting the VAT back is the best part of the whole shopping trip. For those who are unfamiliar with VAT, this is the additional tax that is baked into the listing price of the item. As a visitor, you don’t need to pay the tax so you’re entitled to getting the tax back as long as:
1) you shop from a store that participates in this program (most design houses do), and
2) you meet the minimum spending requirements which varies by store
The amount of VAT baked into the price varies by country, but I’ve seen ranges from 15%-25% (Europeans pay a ton in taxes). You don’t get all of it back since the company that processes the refunds subtracts the “handling fee”, but it is still substantial. As an example, I got at least 12%-13% back on my purchases in Paris recently.
Here’s how to get the VAT refund:
- Shop from a store that participates in the program. There are usually stickers on the stores for Premier Tax Free or Global Blue, which are two of the major processors for tax free shopping. Even if there are no stickers, it is worthwhile to ask the store if they participate in the program before you make the purchase.
- When you make your purchase, ask the associate for the Tax Free forms. Then present your passport and the sales associate will fill out additional forms using the information from your passport. Make sure everything on the form is correct!
- At the time of purchase, you may need to indicate if you want the refund as a cash refund or on your credit card. Once the purchase is complete, save all the receipts, forms, and do not open or use the items you purchased! In order to qualify for the VAT, the goods have to be exported outside of the EU so keep the shopping bags sealed.
- If you choose the cash refund:
- The processing company takes out more commission so your net refund may be lower than if you took the credit card refund. For instance, a cash refund may get you 12% back versus 13% back if you opted for the credit card refund. That 1% could be significant depending on how much you’re spending.
- You’ll get the refund at the airport prior to departing the European Union. The refund will be delivered in euros so you’ll have to exchange it back to dollars if you’re headed home after that, which could result in paying additional commission to the Exchange Bureau. But, you’ll get the money right away.
- If you choose a credit card refund:
- You could get a higher refund amount than if you opted for the cash refund.
- Similar to the cash refund, you’ll process the paperwork prior to departing the European Union, but it will take 4-6 weeks for Premier Tax Free or Global Blue to process and then issue the refund on your card.
- If you choose the cash refund:
- On the day you’re departing the European Union, make sure to arrive at the airport 30min to an hour earlier than you normally would. Go to the customs desk, show them the sealed shopping bags and the associated forms and receipts, and ask for a customs stamp. Your forms will not be processed without a customs stamp so this is important!
- Once you get the stamp, there’s usually two things you can do: 1) stand in another line to show them the forms with the customs stamp and to receive your cash refund, or 2) mail in the forms using the pre-paid envelope the sales associate gives you and wait for your credit card refund.
- If you’ve opted for the cash refund, you’ll be done at this point.
- If you’ve opted for the credit card refund, you may wait up to a couple of months before you’ll see a credit on your credit card. Since you’re dealing with a foreign company to get your refund, I recommend taking pictures of all the forms so that you have a copy in case you do not see the refund processed. I’ve never had issues asking for a credit card refund, but it is nerve wrecking to wait for the credit card refund especially if it’s substantial. In case you want to follow up on the refund, that photo of the forms will undoubtedly come in handy.