I read an excellent article recently about how to collect your VAT (value-added tax) back from your shopping overseas. I wholeheartedly agree that it is up to you to ensure that you get your VAT back and also, that you have to be aware you won’t get all of it back due to various service charges. And yes, Japan is the easiest place to get your VAT refund without feeling like they are doing you a favour!
However, there are still other pitfalls you need to watch out for when shopping overseas. Here are some of them:
Go local
In London – at some retail spots, especially the department stores – when you pay by credit card, they often ask if you’d like to pay in your home currency, claiming that they give you good rates. No, they don’t! So always say no. Pay in GBP and just pray that the exchanged rate against your currency doesn’t rise drastically before you get your credit card bill.
Prepare to show and tell
Nowadays, some of the people servicing the VAT counters are no longer Customs officials but private companies that governments have outsourced the facility to. They are very keen to process your claims because they get a cut out of each claim. As a result, they aren’t that interested in physically seeing your goods to make sure you are truly taking them out of the country. It does vary from country to country though; I can’t remember the last time I had to show anyone what I bought in London or Paris but in Italy they can be insistent.
The rule is you must look as if you want to show them your stuff so you have to bring all your luggage with you to the claims desk. Most likely you won’t be asked at all. To be safe, the best thing to do is to put all your shopping in one suitcase and just bring that one to show them.
I made the mistake once of not putting all my purchases in one suitcase and could only show very few items. The female Customs officer also didn’t believe me when I said I was wearing my new bra. She pointed out that I couldn’t have been wearing all the three that I bought!
The airport I am most familiar with is Heathrow International. Terminal 4 has one of the worst VAT service centres. It is cramped (deliberately I’m sure) and in certain seasons and if you insist on getting your refund in GBP cash, be prepared for long queues. (Again, do not accept offers for faster refunds with no queues but in your own currency. The rates are awful.) But recently I happened to take British Airways and therefore departed from Terminal 5. What a revelation! The VAT counter was on the same floor as the check-in counters and is wide open and not hidden in some small dark room. The process is very fast and right after you can check in at the many counters just a few steps away. Definitely an incentive to fly BA.
Keep your items safe
Finally if there’s one thing that can totally zap your VAT claims, it’s having your purchases stolen. Not only did you pay full price but you don’t have the goods anymore and cannot claim your VAT. Or you can try, but if you can’t show them that you have it with you, then you’re done for. I had my new shoes picked out of my shopping bag once in the Paris Metro just two hours after I bought them and would never have realised it if another passenger hadn’t told me. I was more concerned about my wallet which had been picked clean of cash!
Travel gives you access to more interesting shopping. Just make sure you’re aware of how to get the best prices out of it.
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