For most ladies, one of the main attractions of traveling to Europe is the chance to go on a shopping spree for branded goods as they are considerably cheaper than in Asia. In fact, it is quite common to hear stories of people flying thousands of miles to London’s West End, Paris’ Champs-Elysee or Milan’s Fashion Quarter, purely to stock up on designer coats, watches, handbags, shoes and clothing. They fly over with empty suitcases and stock up on all of the latest designer wears before heading back home with considerably lighter wallets.
For those of you planning a trip to Europe and wondering whether to do branded goods shopping in London, Paris or Milan, here are some useful tips:
VAT Rates vs Refund Rates
One of the main advantages of shopping for designer and branded goods in Europe is that you are able to claim a VAT refund when you leave the country. This can significantly reduce the overall cost of the goods purchased. Of course, you do then have to be careful about how much you bring back into your own country of residence, as you could be subject to hefty import duties. But for the most part, the tax refund is well worth purchasing high-value branded items abroad. As each European countries have different VAT rates, the amount of refunds you receive will be dependent on these rates ie. considering all things equal, you’ll be better off purchasing an item in a country with the highest VAT rates.
London VAT rate: 20%
Paris VAT rate: 20%
Milan VAT rate: 22%
When calculating your refund, please note that the prices are inclusive of the VAT rates so if the price of an item is 100 Euro, the VAT is not 20 Euro but rather 16.67 Euro or 16.67% of the selling price. Also, there will always be administrative fees charged for processing the refund. In the end, the amount of refund you receive will likely be as follows: (based on Global Blue’s handling charges)
London refund rate: 12.2%
Paris refund rate: 12%
Milan refund rate: 12.4%
Global Blue is the largest agency specializing in VAT refunds process so it is very likely that it will be the company processing your refunds. For those of you who are not mathematically inclined, Global Blue provides a cool VAT refund calculator that will instantly give you the refund amount once you put in the purchase country and amount.
Currency Exchange Rates
Another important factor to consider is the exchange rate. At times when the pound is strong compared to the euro, it makes sense to buy designer brands in the Eurozone countries as you will get more for your money.
Paul Swansen’s Flickr
Minimum Purchase Amount
I believe this should not be a factor since we are talking about purchasing branded goods 🙂 However, in case you get such great deals, below are the minimum qualifying amount before you can receive a refund:
London: 30 GBP
Paris: 175 Euro
Italy: 155 Euro
Cash vs Credit Card for Refunds
This should be a no-brainer; cash in your wallet is always better than cash in someone else’s wallet. Even though cash refunds may incur higher processing fees (1-2%), it saves you the trouble of having to constantly check your credit card statement and waiting for the refunds to arrive, and worrying if you will ever receive the refunds. Afterall, your branded goods shopping spree is very much predicated on savings achieved from VAT refunds.
Buy Local Brands
If you are a fan of Italian designers then Milan would be a better option than Paris. The Italian shops will often receive the new collections before shops in other countries. If you are looking for the latest in designer trends then you will want to travel to the place which is the first to know about changes as they happen. They are also more likely to have a wider range of stock available, giving you access to more of the collection in one go. The reverse is also true; if French designers are more up your street then Paris would be a preferable option in terms of having access to the latest in French fashion.
Designer Outlets
If you are interested in getting the best deal possible, and don’t mind whether your handbag is from this season or the last, outlet shopping villages are the best places to secure a bargain. Here are some places to get reduced designer products:
London: Bicester Village (an hour away from London)
Paris: La Vallee Village
Milan: Serravalle Designer Outlet
Happy Shopping!
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