I’m always trying to buy local goods when traveling internationally. Between tracking down hard to find items, saving money on the currency exchange rate and getting VAT refunds, I have shopping down to a science (or more like a math).
In my previous post, I talked about some hard to find Germany beauty items, but this post is all about saving money. The amount I save is shockingly significant. I save about 30-40% on designer fashion and 20-40% on beauty. It’s sometimes less, like designer shoes is significantly less than handbags for example, but I’d say this is the average. There are two ways to potentially save:
Currency Exchange Rate
1- Download a currency app
I highly recommend you download the app, XE Currency, (or any other currency app) so that you can easily convert prices on the go. When connected to a network, it updates the rates in real time, but even if you don’t have service abroad, you can still convert from the last pulled rate.
2- Look up the foreign price ahead of time & take screen shots
Before I go, I look up the foreign price online to know how much I can expect to save or if it’s worth it to buy it abroad. For example, if looking up the price of a Gucci handbag, just go to the Gucci website and change the country to wherever you’re going. Use google translate to navigate the site if necessary.
🗝 Tip: I always take screenshots of what I’m looking for- it’s the easiest way to communicate with shop employees and remember details.
3- Look up US price ahead of time & take screen shots
Sometimes I just want to shop around for items and can’t look up the foreign price ahead of time. The best way to know if you’re saving money is to take a screenshot of the item and its US price. This way when you’re shopping (1) you can just show a photo of the item and (2) you can instantly compare prices by converting the price with your app. I always do this with beauty products.
1- Look up the country’s VAT & VAT refund fee
You will generally not get the full VAT refunded (see my exception below). So, it’s good to know both numbers. In Germany, for example, the VAT is 20%, but the processing fee is 8%. So, your refund is actually 12%, not 20%.
🗝 Tip: Also, some countries have minimums. For example, your purchase total (same day & in the same store) must be at least $100, etc.
2- Confirm with retailer that you can purchase items tax-free
Just because you’re shopping with a passport, doesn’t mean everything you buy is going to be tax-free (I thought this once). The retailer has to actually sign-up to participate in the program. There are several different programs (Global Blue, for example, is one specific program). Always ask first.
3- Get the proper paperwork
In order to process the refund you will need additional paperwork and receipts. Make sure to get this before you leave the store. Without this, you are not eligible for a refund.
🗝 Tip: Always carry your passport when shopping as you will need to show it to get the tax-free forms.
4- Find out where to get refund processed
Most of the time, you will need to get the refund processed at the airport. Go at least an hour early (in addition to how early you would normally go for your flight) if processing at the airport. Some stores (large department stores for example) might process the refund on site. It’s usually on a different floor in the customer service area and not at the register. You will always have an option to process it via mail (some locations only allow this, like at the Milan Malpensa airport), but if you have the option to do it in person, I would recommend that.
Getting a full VAT refund on my Rimowa in Germany
Normally you do not get a full VAT refund when shopping abroad as all tax-free shopping programs (ie: Global Blue) charge a processing fee, but in very rare cases, a small local shop will allow you to directly get a refund from them, and they will not charge you a processing fee.
Ruser Lederwaren, a leather goods store in Lorrach, Germany, give you a full 20% refund. Once you leave the EU, you mail them the tax-free form, and they will refund your credit card. You must request the tax-free form when checking out and show your passport. They allow you to mail the form back within 1 year from purchase. They have a fantastic selection of Rimowa. I saved almost 40% on my Salsa Deluxe Cabin Multi-wheel 37L.
🗝 Tip: I found it really hard to find tips for how to get a VAT refund at the Frankfurt Airport, but HERE is a great post on TripAdvisor.
🗝 Tip: Seoul Incheon Airport has automated refund kiosks incase you have a super late or early flight. The VAT refund in Korea is 6%.