Sounds romantic, right? Shopping along the Champ Elysee in Paris and bringing home a gorgeous designer handbag, “Oh this? I bought in Europe!” And I’m sure you’ve heard about the value-added tax (VAT) that you can have refunded so you’ll get a better deal on your purchase thank you would in the states. But is that all true? Is it worth the hassle? I’m going to break down my experience and mistakes I made when I bought a Chanel bag in Germany. You can skip to the bottom if you are just looking for the quick tips.
Do Your Research and the Math
You’ve picked out the bag you want, great! Now pick out a couple more options because it is entirely possible that the one you want won’t be in stock. When I walked into the Chanel in Munich I knew I wanted a Medium Classic Flap in black lambskin, I hadn’t decided on the hardware. This was purely speculation. Had I ever gone and looked at a Chanel purse in a store prior to this? Not really. When I got to the store and saw how fragile the lambskin was I immediately decided against it in favor of the calfskin with silver hardware. However, this was sold out. Turns out that particular combo is the most popular… who knew? Someone who does their research, that’s who.
Oh, and make sure the store is open. When I was originally going to purchase my purse I was in Belgium but it was unfortunately a Sunday and the stores are closed that day. I was also with my husband and that would have saved me money when I came back through US Customs – more on that later.
I ended up getting the next bigger size, a Jumbo (which is basically a Large in the US) Classic Flap in black calfskin (also called caviar) with silver hardware. This was roughly a €500 difference from the Medium.
Getting to prices, I can only speak to what I paid in December 2018 as an example, let me break down the cost between buying a bag in Europe. I’m using Germany as an example and while the prices across the EU are similar, they do fluctuate a bit between countries. ChanelPrices.com and Bragmybag.com are great resources for figuring out current prices.
The purse I bought in Germany was €4495.80 plus a 19% VAT €854.20 for a total of €5350. My card was charged $6,078.68. Gulp.
The price in the US was $6,200. Add in my hometown of Austin Texas’ cringe-worthy sales tax of 8.25% and you get a total of $6,711.50. Check your local sales tax on salestaxstates.com.
Good news! I’m already saving some money and that’s without counting my VAT refund.
What’s a VAT Refund?
As a visitor to EU (and other countries around the world) the Duty Free shop in the airport is not the only place where you can enjoy tax free shopping. In the EU you can get your VAT back on many purchases as you exit the EU – provided you have the appropriate paperwork.
There are countries that have a minimum spend in order to qualify for a refund so do your research, but if you are getting a big ticket item like a Chanel purse, you are going to hit it, no sweat.
When you are at the store they are going to give you a receipt that will have your purchase information as well as a section you have to complete to get your refund. This receipt then has to be stamped by EU Customs as you are leaving the EU, not the country you bought the item in.
For example you purchase a purse in France then go to Spain and you leave Spain to go back to the US. The VAT refund receipt needs to be stamped in Spain.
This would come back to bite me later.
My Very Confusing and Stressful Day
I’m checking out at the Chanel store. I’m excited about my new purse, a little nervous about taking public transportation back to my hotel, but overall feeling pretty good.
One thing you need to remember to bring with you when you are shopping is your passport. This information is on the receipt that you will use to get your VAT. The refund is only for people who are not EU citizens.
Here’s the fun part, if you ask the clerk any questions, like, “Where is the Customs office in the airport?” or “How long do I have to wait?” or any questions about getting your refund, they probably won’t know because they have never and will never go through this process themselves. So here you are, stuck reading blogs like this one trying to figure it all out for yourself.
And these blogs will contradict each other, so good luck.
One of the things that all the blogs, guides, and official government websites I could find agree on was that when you show up to the EU Customs office the item has to be in all of its original packaging when it is presented to the officer for inspection. This purse came will a lot of extra fluff. There was a huge box and about a pound of tissue paper all in a large bag. It was at this moment I realized I was going to do something I had never done on a trip. I was going to need to buy another suitcase.
I successfully made it back to my hotel, dropped off my purchase and immediately went back out to try and find another suitcase. A cheap one. Luckily, in Germany there is the European equivalent of TJ MAXX and that is where I found my new cheap check-in sized suitcase that I prayed would make its maiden voyage, because that’s all it needed to do.
Just to be clear, this was an unexpected purchase.
At the hotel I packed everything that had previously been in my carry-on bag into my new slightly larger bag. I had acquired quite a few souvenirs along the way as I was also doing holiday shopping on this trip.
The only thing that fit in my carry-on bag was the Chanel purse and all of its packaging. It looked ridiculous and in fact the security officer manning the x-ray machine at the airport did chuckle as my bag went through.
That evening in my hotel I started to do my research on where the Customs office was in the Munich Airport so I could get my receipt stamped. I was leaving Munich to go back to the US but I had a layover in Amsterdam – which would technically be my last port. But this layover was less than two hours and one of the blogs I had read said that if you could show them you had a tight layover then you could get your receipt stamped and processed in the first EU country.
The Customs office opens at 6AM, my flight out of Munich takes off at 7AM.
It is not in the same terminal as my gate.
I start doing the math.
I have to check in for my flight, drop off my new bag, go to the other terminal, wait in line, get my receipt stamped, find the right place to mail it, go back to the other terminal, get through security, and get to my gate to board my flight. Immediately I realize this is going to suck and there’s a chance I will be doing the thing I hate the most – running for my flight.
The next, very early morning, I get to the airport, drop off my bag and get my ticket. But there’s a problem, the airline has only given me my ticket to Amsterdam, not my next flight. They tell me that I’m going to have to get my next ticket when I arrive in Amsterdam. This puts a wrench in my plans for getting my stamp in Germany. I head to the office anyway, maybe the Customs officer will be understanding. I get there with plenty of time to spare and I wait for the office to open. I chat with my husband on my phone, I am very stressed. My anxiety level is through the roof.
Finally, the office opens. I get up to the desk and am promptly turned away. I am informed that Amsterdam is my last port. No exceptions – unless I had checked my purse to my final destination then they would have inspected it in Munich and given me my stamp because I would not have been able to present my purchase in Amsterdam.
Okay, timeout. Everything I read said to keep your purchase with you in your carry-on bag. Thinking on this it doesn’t make exact sense because what if you bought skis or anything larger than a bread box? It would have to be checked. Here’s another example of a contradiction that I found. Turns out you can inform the airline that you have an item for VAT refund, your bag is still tagged but you take it with you to the Customs office. They examine your goods, you get the stamp, and drop the bag off at the check in desk.
Would this have worked for me? Probably not, I was cutting it close getting myself on the plane let alone my checked bag. Also, I wasn’t comfortable checking an expensive bag.
Defeated, I walked to my gate.
As I was about to be without internet and I had done exactly no research on where to get my stamp at the Amsterdam airport I message my husband and asked him to help me figure out what to do next. He was able to send me a map of the Amsterdam airport and the location of the Customs office. Which, quite honestly, caused me even more confusion.
When I got to my gate I found out that my flight had been delayed due to snow in Amsterdam. My layover time shrunk. I was already going to have the haul butt to get my next ticket and get through passport control and get to my gate. Add on figuring out where the Customs office was, waiting in line to get my stamp and then finding the right place to drop it in the mail, I was starting to think I was not going to be getting a refund.
When my plane finally landed in Amsterdam, I booked it. I had roughly 40 minutes to get everything done.
At the ticket counter I asked if I could maybe take a later flight. Answer: Not without paying a significant amount of money and the airline employee helping me wouldn’t budge on this. She also told me to run because if I didn’t make my flight it would be my fault and I would have to pay extra to get home. Yikes!
That’s what I did, I ran to passport control. While I was getting my passport stamped I asked where the Customs office was. I was met with some confusion but a general direction to head in once I got into the international terminal.
I hustled toward my gate and with 20 minutes to go until the boarding doors were scheduled to close. Instead of taking a right to my gate I kept walking toward where I had been told the Customs office was located.
I was taking a gamble.
Along the way I asked an information desk attendant for more instructions, which were once again a bit vague but I did find it. Thank goodness the line was really short. In fact there was only one other person in line and he was arguing about packaging rule I had mentioned earlier.
I’m staring at the clock on my phone. The minutes are ticking by as this man is arguing with the officer but finally she takes pity on him and stamps his receipts. I run to the counter, shove all of my paperwork on the desk and start to unzip my bag to show my purchase. The officer stops me and doesn’t even bother to look at my purse. I show her my passport and my boarding pass. My receipt is quickly stamped. She tells me where to go to get my cash refund. “I don’t want a cash refund, I want a credit card refund.” I mean, what am I going to do with that many Euros? She tells where me there is mailbox. I shove my receipts in their pre-postage envelope and take off toward the mailbox.
5 minutes until boarding doors close.
I, of course, can’t find it but I do find the desk for cash refund. I stick out my envelope, ignoring that the person who is working the booth is already helping someone and curtly yell, “MAILBOX?!”
She points behind me, I had just walked past it. I shove my envelope in the box and take off toward my gate.
3 minutes until doors close.
As I’m power walking, because I’m too out of breath/shape to run I yell out “HOUSTON” a couple of times thinking maybe that will stop them from closing the doors. It takes me 7 minutes to get to my gate which is thankfully still open.
The gate attendant tells me to slow down. Because of the snow, they delayed the flight for people who had tight connections. As I’m boarding, I actually do a little fist pump down the jet way. I end up taking my seat and the plane remains at the gate for another 30 minutes. Plenty of time for me to have hit up the Duty Free. Darn.
Getting to the US
Yay! You’ve made it back to the US. Now you have to claim your purchase and pay duty on it.
I have Global Entry so when I got up the the kiosk I checked box saying that I was claiming a large purchase. At this time I am able to bring $800 worth of goods into the US without claiming it.
Make sure you claim your goods. If you don’t, you can get into big trouble. Remember you had to show your passport to get your VAT receipt so your purchase is linked to your passport number.
I presented my print out and was escorted to a different area of US Customs. I was asked if I had checked a bag and I was then escorted to baggage claim to get it. Luckily my cheap bag made it. From there I was then escorted to yet another room where my purchase was inspected.
The amount that the item is taxed is dependant on the material and the country of origin – not the country it was purchased from but the country it was manufactured in. My purse is leather and made in Italy.
Here’s a big tip, make sure you have your receipt with you. The store should give you two copies, one for your VAT and one to keep. This is how you prove how much you paid for your item to US Customs. If you don’t have that they will look up how much the item is currently being sold for in the US and charge you that amount instead.
Here is the cost breakdown for my duty: Purse cost €4495.80 (don’t include the VAT) this was converted to $5080. Then $800 is subtracted, this is the amount you can bring in without claiming. That leaves me with $4280. The first $1000 is taxed at a flat 3% – $30. The rest, $3280 is taxed at the rate that is determined by material and country of origin. For this purse that was 8% – $262. The total duty paid for my purse was $292. In Houston they accepted a credit card so I got some points out of it.
Note: If I had been traveling with my husband than our $800 limit would have been combined allowing the first $1600 of the purse to be tax free.
Here’s the new grand total: $6370.68. Even if I don’t get my VAT back I’m still less than purchasing it in Austin Texas at $6,711.50. But I’m going to get my VAT back right?
Waiting is the Hardest Part
One big mistake I made when I dropped my refund claim in the mailbox in Amsterdam was that I didn’t take a photo of the completed forms. I had no proof that I had gotten the forms stamped. Heck, I didn’t even think to get the tracking code off the form.
Internet searches weren’t much help. The service that would be processing my refund had a few horrible reviews which made me feel worried about getting my refund. You don’t really get a choice as to who is processing the refund, it all depends on who the retailer partners with.
I wasn’t even sure if I filled the form correctly and with no photographic evidence I had no way to sure if I had done anything right. I was going to be quite ticked if all that running around and stress was for nothing.
One lucky thing did happen. I actually had two receipts in the same envelope. I had also purchased a couple of dresses and thought, “What the heck? Germany had no minimum spend to get a VAT refund, I might as well fill out the form for that purchase and get back $30 or so.” I did have the tracking number for that refund.
Sadly, in the weeks that followed I was never able to get the tracking number to show up on the company’s website. There was nothing to do but wait. And wait some more.
Exactly a month later the credit for the Chanel bag appeared in my account for €722 or $771.99. The VAT was €854.20 so about 15% was taken in fees by the processing company. Unfortunately, there is no way around this “service” fee and it can fluctuate depending on how you choose to receive your refund.
After the refund the final total for what I spent on my purse ended up being $5598.69 saving me $1112.81 if I bought it in Austin, Texas.
If you want to get really picky I spent €40 on the new luggage and you can take that out of the difference.
Would I Do This Again? and Should You?
I can’t argue with the money that I saved but it was a lot of work and stress. There was also the chance that I wasn’t going to get my refund due to mail issues or a filling out a form incorrectly. I would say that even if you don’t get your VAT back and the item still costs less, then go for it. Let the VAT be the icing on the cake.
My Tips for a Successful VAT Refund
- Know what you want to buy and have couple of options just in case they are sold out
- Make sure the store is open
- Know your prices and do the math before you go – It might not make sense to purchase it outside the US
- Have your passport with you when you shop
- Make sure your get two copies of the receipt – one for VAT one to show US Customs and for your records.
- Know your last port of call – ie. what country you are leaving the EU this includes connecting flights
- Book a later departure so that you have time before your flight to get your VAT refund stamped
- If you are leaving through a connection make sure you have enough time during your layover to get your stamp
- Located ahead of time where the EU Customs office is at your point of departure
- Take photos of all your completed forms, noting any tracking numbers
- Claim your purchase when coming back in the US
- Have patience, the refund can take anywhere from 4 to 6 weeks
EU guide to VAT
US Customs guide to duty