American tourists routinely face severe sticker shock when they are shopping for luxury and tourist items in the member countries of the European Union (EU).

What they fail to realize is that the price tag on  EU consumer durables contains the required VAT (value added tax).  The VAT varies from country to country, but can equal an amount from 15% – 27% depending on which country you are in.

Let’s say you were buying a watch in Greece that is worth €500.  The price tag is going to read €615, as that price must include the Greek 23% VAT.

Therefore, tourists must not only be able to calculate the conversion rate from euros to dollars, but they must also bear in mind that the price tag also includes a refundable VAT.

Is your head swirling yet?

Don’t dismay.  Here’s a handy foreign currency calculator for your smart phone, and we’ll now teach you how to get a refund for most of the VAT.

How to Obtain a VAT Tax Refund

The first thing you should realize is that these countries would prefer that you leave the VAT tax in their pockets.  Therefore, the process to get your VAT tax refund is not a very pleasant one.  Thankfully, of course for a fee, a few entrepreneurial types have come up with a program to help you get your refund quickly in hand.

By far, the largest of these companies is a company called Global Blue, claiming well north of 270,000 merchant participants across Europe.  Another popular VAT refund company is called Premier Tax Free, which is about a quarter the size of Global Blue.

Here’s how it works with Global Blue:

1. Get it – look for stores displaying Global Blue Tax Free Shopping signage in the window.  When paying for your purchases, ask the clerk for a Tax Free Form.  Fill in all of the required fields in block letters using the Latin alphabet.  For Americans, that’s our alphabet.  If you are a frequent European visitor, you might do well to obtain the free Global Blue Card.  Then you simply present the card at purchase and the form will be pre-printed with your personal information.
2. Stamp it – this is done at the airport, and will require some additional time before your flight departs.  In busy times, lines can be quite long, so be prepared! Before you check in for your flight, go to the Customs desk and present your completed Tax Free Form, passport, receipts and purchased items to get a stamp on your form. Make sure the goods are unused. Don’t pack them away in your check-in luggage as you will need to show them to the Customs Officer.
3. Cash it – Go to the refund counter displaying a Global Blue logo. Present your stamped, completed Tax Free Forms to receive the refund in cash or to your credit card. Worried about missing your flight? Mail your stamped, completed Tax Free Forms using the Global Blue envelope and receive your refund on your credit card.

It’s important to know that an incomplete form, or a form not stamped by customs will not get you a refund.  And, your refund will be minus Global Blue’s handling fee.

Alternatives

If you’re hellbent against paying a fee to these refund companies, you can attempt to talk the merchant into sending you a refund after you get your properly stamped papers from customs.  However, as you can imagine, this is a hassle not only for you, but the merchant as well.  Our advice?  Use one of the refund companies, and know that this is the cost of making purchases in Europe.  Smile.  Enjoy your souvenirs.

Don’t put all your hopes in the refund!

Countless travelers recount tales of improper forms, no customs agent on duty to stamp their form, and massive lines during busy times thus preventing them from getting their refund.

Listen, you’ve just enjoyed a fabulous European vacation.  Don’t let this spoil your return trip home.  You can only do what you can do.  Right?

Take a deep breath, have a nice glass of wine, and thank God for all of the beautiful things you’ve seen, the interesting people you’ve met, and the wonderful cuisine you’ve enjoyed during your visit.  🙂
 
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