Save ALL The Money: How To Shop Abroad

At last, summer — and that European getaway you’ve been planning all year. While you’re looking forward to that scenic boat ride through the Stockholm archipelago or getting a Rembrandt fix at Amsterdam’s Rijksmuseum, what you’re really excited about is scoring a sweet deal on that Burberry Bloomsbury bag or Saint Laurent metallic Mary Janes, right?

Savvy travelers already know that European luxury goods can be cheaper across the pond. So, if you've got your eye on big designer buys, it's probably worth penciling in a retail excursion on your next trip abroad rather than snatching them up near home. But, it's not as if Rue Saint Honoré is paved with bargain bins full of big-name goods. There is a process involved to get in on these savings (like getting your VAT refund at the airport, but more on that later) and it takes a bit of work. With our primer on how to shop smart while abroad, there's nothing between you and those armfuls of impulse souvenirs you may have to use as a seat cushion on your flight home. Just, try to hit some of those culture spots, too.

Photo: Courtesy of Chanel.
Do Your Research
Before you sail into Chanel and plunk down major euros for that boy flap bag, case the market. “The most important piece of advice I’d give anyone planning to shop in Europe is to comparison shop online and in stores here before you go,” says Kathy Borrus, blogger and author of The Fearless Shopper. “Otherwise, you won’t know if you are really getting a deal.” Most of the time you do come out ahead by buying in Europe. One way to be sure is to convert the price of the item from euros to dollars and subtract the VAT refund, which is already built into the price and varies depending on the country you’re in. Download an easy-to-use currency-converter app (like XE Currency or Oanda) before the trip and this will be a breeze.

You can find a country’s VAT rate (which is a type of sales tax called Value Added Tax), as well as the minimum purchase requirement to qualify for a VAT refund, at Global Blue and Premier Tax Free, the major VAT refund services in Europe. For example, France requires you spend a minimum of 175 euros (at current exchange rates, that’s about $240) and then you’re eligible for a 5 to 20% VAT refund, which varies based on the type of item you’re buying. If we’re talking Alaïa cutout sandals and Balenciaga knits, then you’re looking at about 12%. You can always get clarity on the country’s VAT percentage — and what that means exactly for your clothes and accessories budget — from the hotel concierge or store salesperson.
Photo: Courtesy of Dior.
Check In With Your Credit Card Company
Another crucial item on your to-do list before you leave for the airport: Notify your credit card company that you’re going to be swiping overseas. Find out if it'll be taking any kind of cut on that Valentino cape. “Many banks and credit card companies charge a foreign currency exchange fee on each purchase,” says Borrus. “Best to get a card with no fee for the exchange rate.” Or, at least be aware of what you’re in for — cards charge on average 3% per purchase, which can add up if you plan on doing some serious damage.
Photo: Courtesy of Burberry.
Shop Like a Pro
Now, you’re getting to the good stuff. You’ve made it to Milan, have spent the afternoon perusing the designer boutiques on the Quadrilatero d’Oro, and are ready to snap up that Fendi baguette and Dolce & Gabbana floral lace dress. Make sure you have your passport in tow because you’ll need it for paperwork. Most luxury salespeople will ask if you want a VAT refund, though more mainstream stores might not be as proactive. If the store doesn’t have a “Tax Free Shopping” or “Premier Tax Free” sticker in the window, find out before you buy if it participates in the program.

If the VAT-refund eligibility is a go, “they’ll usually ask if you want to be charged in dollars or euros,” says Michelle Madhok, online shopping expert and founder of "Always pay in euros," she says, as you'll get a better deal if you pay in the local currency. She also recommends asking the salesperson to mark “cash” not “credit card” on the VAT refund form, which refers to how you'll get your refund — either cash in hand at the airport, or months later on your card statement. Important: Hold onto the form, which you’ll have to complete, the envelope that comes with it, and the receipt from your the purchase — you’ll need all of this later.
Photo: Courtesy of Céline.
Do The Department-Store Thing
Maybe the mere thought of a department store makes you shudder — you’re still recovering from a misguided visit to Macy’s Herald Square. Consider that European department stores are a whole other experience. Enjoyable, even. They aren’t as hectic or as picked-over as their American counterparts, plus many of them, like Le Bon Marché in Paris, will actually give you your VAT refund on site. In that case, you'll only need to get your VAT form stamped by customs at the airport, put it in the accompanying envelope, and pop it in a mailbox, eliminating the need to wait in another (often tedious) line to get the cash back. “Some European department stores even take care of all the extra work for you,” says Madhok. “They fill out the forms for you and will reimburse you through the mail.” Pretty enticing if you don’t need that cash back immediately to, say, pay for your hostel for the night.
Photo: Courtesy of Cartier.
Master The Airport VAT Refund
You can only get your VAT refund in your final destination before heading home. So, if you’re starting out in Paris, then moving on to Munich, and wrapping things up on the Amalfi Coast (well, that's awesome for you), you will have to get your refund in Rome when you’re catching your flight back to the U.S. Don't stress about connecting flights; the refund needs to be issued in the origin country of departure.

“I would advise arriving at the airport three hours before your flight,” says Madhok, cautioning that getting there too early can work against you. “Some customs may not process a claim more than three hours prior to your flight.” If you have an early morning flight, check when customs and VAT services open. “You will likely run into lines at any time of the year,” Madhok adds, warning that they're the longest on Saturdays and, yep, during summer and winter vacation.

Here's how to do that VAT-refund shuffle: Make sure you have your passport, completed refund form, receipt for the purchase, and the actual item itself because the agents may ask to see it. Step one: Wait in line at customs, often found in the airport terminal before you go through security, to get your form stamped.

If you already got your refund at, say, a department store, put the form in the postage-free, pre-addressed envelope, drop it in a mailbox, and go on your merry way to security. If you still need to get your refund, you’ll proceed to the Global Blue or Premier Tax Free refund service, wait in line again, and get your cash. These services will take a cut of the refund (about 4%).

If you opted for a credit card refund, drop the completed form in a nearby mailbox and wait two to four months for the kickback to be reflected on your statement. Keep your receipts, you may need to check in with the service periodically if this doesn't happen in a timely fashion.
Photo: Courtesy of Fendi.
Shop IN The Airport
So, you’ve got a few hours to burn in Heathrow, and a group of close friends there that go by the names of Hermés, Gucci, Miu Miu, and Mulberry. Should you buy anything in these incredibly inviting duty-free shops? Again, this goes back to doing your research before you even leave the U.S., so you’ll know if you’re getting any kind of savings. These items have no sales tax whatsoever, so you can skip the whole VAT song and dance. So, the value here is finding prices that actually are better than what's offered in The States — not always the case at the airport — or finding items that simply aren't available at home. This writer shaved a few hundred dollars off a Collier de Chien bracelet; a brown suede and gold hardware combo she hadn’t been able to find in the U.S.
Photo: Courtesy of Louis Vuitton.
Here's Where You Declare
You’re all caught up on season three of Homeland and the captain announces the plane will momentarily make its descent. Oh yeah, you still have to fill out that U.S. customs form the flight attendant dropped off. The deal with that: If you bring more than $800 of international purchases back to the States, you have to declare it on that form and pay the U.S. duty of 3% on the next $1,000 worth of purchases. After $1,800, your "souvenirs" can be taxed up to 10%, and clothing can be hit up to 25%. So, list things as you will.
Show More Comments...