Monday, May 10, 2010

Tax-free shopping: not worth the trouble

I have long lamented my laziness in requesting my tax back from purchases made in other countries. So in March, while on a weekend trip to Barcelona, I decided to do something about that. When paying for my Spanish fashions, I requested a Global Refund. It seemed easy enough.

1. Fill out the Global Refund receipt that the store gives you.
2. Take it to the tourist office.
3. Get your tax back in cash.
4. Get the receipt stamped upon your departure.
5. Mail it back in and hope you filled it all out right.

Anyhow. I spent 138 Euros on clothes, got 17 Euros or so back in cash after standing in line at the tourist office for a half hour, ran around the Barcelona airport almost missing my flight for the silly stamp (it is my impression that the tax-free customs guys hide on purpose--you'll see why below), and then spent 2,40 CHF on a stamp to mail the thing back to Spain. Worth it? No way.

Time is money. And unless you're spending thousands of dollars in a foreign country, forget the tax-free thing. It's just not worth the time and stress.

And here's the catch: my sister paid it. If you fail to get your receipt stamped at customs and fail to send it back after the fact, you are charged. A lot. My sister got a nice $25 charge on her credit card two months after the fact, even though she originally only got 10 Euros of tax money back. So the whole transaction ended up with her having a loss of about $15. (Spain told her Switzerland would stamp her receipt before her flight back to the U.S., but Switzerland wouldn't stamp it because they are not in the EU.)

Lesson: tax free, don't bother. Unless you are spending at least $1000 and are 100% sure of the rules and how to follow through--especially if your trip involves multiple countries that may or may not be in the EU.

Do you have experience with tax-free shopping? Do you think the time is worth the money?


Jen said...

I remember we did it from Canada to uk and it was worth it: Every receipt over a certain cdn$ amount needed to be stamped at the airport (again, hard to find!), then you sent off the receipts on your return and two months later, a cheque for (i think) GST was sent to us, in pounds. We had bought a camera, but the rest was tshirts and CDs. The onus was on us though, if we didn't send in receipts, no money, unlike where you got money then had to send receipts. I did worry we'd get hit for uk import vat instead which was more than we saved, but we weren't. We dud declare the camera, but though it was expensive for us, it was under our combined allowance.

Anonymous said...

When we were in Prague we got the tax refund at the airport before returning to Switzerland. The vendor gave us the form, we filled it out at the airport and got our refund immediately. The way you describe doesn't sound worth the trouble, but what we did was easy.

Chantal said...

Glad to hear others had better experiences than me. Maybe I'll have to try it from another country at some point.

M'dame Jo said...

I did it from Canada and from the US to Switzerland. It went pretty smoothly. As for Europe, I'll do it for the UK or Northern Europe, where taxes are really high. Otherwise, I don't bother if it's to save 20 CHF.

M'dame Jo said...

Btw, it's because you're a non EU resident that you can get the tax back. Bad for your sister, good for you...

Chantal said...

Long live the Non-EU!

Anonymous said...

I have recently moved to Basel and being so close to the border find myself shopping in Germany a lot. It is sort of like shopping with a permanent 19% discount, and with the Euro being rather week one saves a lot of money. I find the regaining of my VAT quite easy, though that may be as I am crossing the border by land. I even find myself only shopping at stores that make the whole process easier for you. All you have to do is fill in your name and address on the (usually) green Ausfuhr und Abnehmerbescheinigung form, flash your B or C permit or Swiss ID at the border and get the nice border guard to stamp the form. Next time you go back to the same store they hand over the money, which I then feel obliged to spend again. Some stores use agencies, which take a cut of your refund, only send checks and take forever to process things, needless to say once we find one of these stores we don't go back.

Anonymous said...

Can somebody scan the Ausfuhr und Abnehmerbescheinigung form with the stamp.
Thank u

Anonymous said...

Can somebody scan the Ausfuhr und Abnehmerbescheinigung form with the stamp and send it to mail
Thank u

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Aytan said...

I feel your pain regarding the tax refund process. Did you know that most tax-free operators also take between 30-60% of the refund you are supposed to receive as an admin fee? Change is coming though - I was recently in Belgium and used an app called Refundit. You do the whole thing on your mobile phone and we didn't even need to stop in customs at the airport for a stamp. I just uploaded my store receipts, passport and boarding pass and then I saw it was confirmed and about 30 minutes later I got an email saying the money was already credited to my MasterCard. I am not sure what countries they work in, but I really recommend checking them out -

Aytan said...

forgot to mention that we paid about 2 euros in commission for about 150 euros worth of goods - so it was totally worth downloading the Refundit app!


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