Traveling and shopping often go hand in hand. Particularly when the destination of our getaway is unfamiliar, there is a tendency upon arrival to rapidly empty our wallets as we indulge in new exotic cuisines, fancy clothing, thrilling activities, and much more. This week’s Travel Tip Tuesday outlines several simple and effective suggestions to help save you money as you explore the world. The following tips will allow you to enjoy a fantastic vacation while avoiding expensive tax and duty costs along the way.
Duty-Free Shops
Most often found inside airport departure areas, seaports, and border crossings, duty-free shops are magnets for thrifty shoppers in search of a great deal. The products at such retail outlets are sold exclusively to international travelers just prior to leaving the country, and merchants as a result are exempt from paying government import taxes that would otherwise hike up the prices of their inventory. The best bargains will typically be found on heavily-taxed items such as alcohol, cigarettes, makeup, fragrances, watches, and various luxury items.
Tax-Free Stores
Tax-free shopping is a means for countries to promote tourism. Particularly in the European Union, keep an eye out for stores advertising signs that read “Premier Tax Free,” as such retailers allow you to receive a refund on the value-added tax (“VAT”) that is included in their prices. Upon completing a purchase at a tax-free store, you will receive a “tax-free shopping check” which you can later present to Customs prior to your departure from the EU. Present your stamped check(s) at a border kiosk and receive an immediate refund. The largest VAT refund service is Global Blue, which represents more than 270,000 merchants in 37 countries.
Tax-Exempt Eligibility
Note that tax-exemption for foreign travelers is specific only to select physical products such as clothing, jewelry, perfume, etc. In other words, the goods and/or services at establishments such as hotels or restaurants are not exportable, and their prices therefore do not include import duties that would otherwise be eligible for a refund by tourists. Be sure to carry your passport with you while shopping abroad, as cashiers will request it at the time of purchase as proof that you are indeed a visitor. There may be a minimum length of stay requirement in a given country in order to qualify for a tax refund, so it is advisable to research your destination(s) in advance. Travelers typically need to remain in foreign territory for at least 48 hours in order to qualify for duty-free savings.
Additional Considerations
- If there are long lines at the airport when you attempt to receive your tax refund, you have the option to mail your stamped tax-exempt forms and receipts to a refund-processing agency (such as Global Blue). You can do this at an airport mailbox and later receive your refund in the mail.
- The U.S. Transportation Security Administration (TSA) recommends purchasing duty-free liquids, such as perfumes or liquor, at the last airport you visit prior to arriving in the United States. Doing so will help you to avoid violating the three-ounce carry-on rule for liquids, which may result in your purchase(s) being confiscated by a TSA agent at a security checkpoint.
- Know the allowable personal exemption rules in the country to which you are returning, and be aware of restricted items. For example, the United States allows a personal exemption of $800 worth of merchandise, and restricts travelers to only one liter of alcohol and one carton of cigarettes per person.
- Take advantage of duty-free shops as an excellent means of spending your remaining foreign currency without the hassle and expense of exchanges.
Ready to Explore Destinations?
Stay tuned for the latest edition of Travel Tip Tuesday.
Hear from our experts on all elements of travel as they share their personal experience and knowledge, which spans everything from fascinating must-see locations, to practical and informative suggestions.
Let us help ensure that your next getaway is the best one yet.