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Tax Free shopping is one of the great perks of international travel—who doesn’t love getting money back on luxury items or everyday purchases? But if you're not careful, a few simple mistakes can mean the difference between a smooth refund and walking away empty-handed.
Whether you're a seasoned traveller or a first-time shopper abroad, this guide breaks down the 11 most common Tax Free shopping pitfalls, and how to avoid them:
1. Misunderstanding eligibility criteria
The first step to securing a VAT refund is ensuring you actually qualify for one since every country has its own requirements for Tax Free shopping.
This may include the purchaser’s residence, a minimum spend, and the type of product purchased. Misunderstanding the criteria is one of the top mistakes when Tax Free shopping and can prevent you from obtaining a refund.
While each country is different, an example of eligibility criteria from France includes:
- Residency from a non-EU country at time of purchase
- Spent less than six months in France
- Over the age of 16 years
While every country’s refund process is different, the European Union has a fairly standard eligibility requirement for tourists who reside outside of the EU. Here is a complete list of conditions for VAT refunds to non-EU travellers.
2. Losing track of or failing to secure documentation
When buying an item that’s eligible for a VAT refund, you’ll need to present your passport and fill out a form for each purchase. Doing this for every qualified item can quickly turn into a mountain of paperwork, making it easy to lose track as the pile continues to grow.
Plus, when you’re excited about a new purchase, you may forget to secure the documentation in the first place.
If you’re looking for an easier way to stay on top of your VAT refund papers, Planet’s digital shopper portal streamlines the experience. Instead of having dozens of forms to hold on to, Planet consolidates and organises the necessary data to ensure you can breeze through the refund process.
3. Forgetting validation from customs
As one of the most important steps in securing a VAT refund, you’ll need to have your Tax Free papers validated by customs in order to claim any money at all.
Failing to have your papers validated by customs upon departure of the country will result in missing out on your refund entirely.
At the airport or point of departure, follow signs for the Tax Refund desk (often before baggage check in) and present your forms, either as a physical or digital copy. You’ll also be required to present your purchased goods, passport, and any other relevant documentation.
To avoid extra stress, be sure to allocate additional time during your travel day to stop by the customs desk. Because we all know how messy the airport can get… even when you plan ahead.
How does Tax Free shopping work?
4. Not submitting claims promptly
The key to securing a VAT refund is submitting your claim ASAP. Putting it off is one of the top Tax Free shopping mistakes because it’s easy for the forms to get lost in the shuffle. By the time you finally dig them out of the bottom of your bag, they probably won’t be valid anymore.
The validity period of VAT refund forms varies from country to country, ranging from thirty days to six months. If you cannot submit your claims immediately, it’s worth brushing up on the country-specific validity periods to ensure you slide in before the deadline.
5. Not understanding country specific rules
Country specific rules dictate what you can and cannot bring across the border. While the goods might be Tax Free, your country of residence may have specific limits or regulations that prevent you from bringing them home with you.
The same goes for the country you’re leaving.
This typically applies to items like tobacco and alcohol purchased at duty free shops, which gives them Tax Free status. But the biggest Tax Free shopping mistake is assuming you can purchase as much as you’d like.
The approved quantity differs based on the country — for example, the United States will allow up to one carton of cigarettes through customs, while France allows up to four.
It’s worth consulting the individual at the duty free counter, but also wise to have an understanding of limits. Knowing these country specific rules can save you from having your Tax Free goods confiscated at customs.
6. Focusing only on luxury good refunds
It’s a common misconception that only luxury goods are eligible for VAT refunds. Sure this is true… if you want to miss out on a ton of money.
To maximise your Tax Free shopping experience, remember that a huge number of items qualify for a VAT refund, namely those that you don’t plan on using during your trip.
Consider purchases like:
- electronics
- jewellery
- homewares
- clothing
- cosmetics
- skincare
Even if the store doesn’t issue traditional refund forms, simply request a purchase invoice that can be uploaded to Planet’s Shopper Portal to be included in your Tax Free savings. Any time you spend a significant sum on personal shopping abroad, your purchases likely qualify for a VAT refund.
7. Thinking every purchase qualifies for VAT refund
Along the same thread, it’s a mistake to assume that every purchase made abroad is considered Tax Free shopping.
It’s typical that there’s a minimum purchase requirement for a single transaction to qualify for the VAT refund. For example, in France, the minimum is 100€, while in Germany, it’s only 50€. It’s important to remember that for these minimums to apply, the goods must have been bought on the same day, in the same shop. They are not cumulative.
Additionally, some items are excluded from VAT refunds entirely, namely those purchased with the intent to export and more simply, basic food, tobacco, cultural goods, weapons, and other similar items.
Remember, the whole idea of VAT refunds is giving tourists cash back for retail purchases made for personal use.
8. Overlooking currency conversion (+ fees)
Many individuals overlook the difference in currencies, which can be a huge Tax Free shopping mistake. When pursuing a refund, you may quickly realise that with the currency conversion, you can lose a significant portion of your cash back due to steep exchange rates and associated fees.
The best way to circumvent this is with Planet’s Dynamic Currency Conversion (DCC). This system allows you to pay in your local currency with complete transparency as to how much you’re being charged. Beyond payment, DCC is extra handy for Tax Free shopping since Planet will refund you in your own currency without any surprise fees or steep bank exchange rates.
Instead of guessing how much you’re owed, Planet makes your refund clear.
It’s worth keeping in mind that refund partners charge different fees and refund at different rates. With fees factored in, you can expect an average VAT refund rate of between 10 and 13%.
What is Dynamic Currency Conversion? (DCC)
9. Using goods prior to departure
When leaving the country you’d like to claim a refund in, you’ll likely need to present the items to customs for inspection. It’s smart to keep the items in your cabin baggage so that you can access them quickly when the time comes.
We strongly advise keeping the goods in their original packaging — try your hardest to resist using them prior to departure. I know, I know, that brand new Chanel bag must be calling your name. But it’s important to retain the product’s original condition as customs will specifically be looking for whether the goods were used before attempting to claim a VAT refund.
10. Breezing past tax refund kiosks
Hanging around the customs office in most airports you’ll find handy tax refund kiosks. These allow you to process your paperwork and have your VAT refund validated digitally rather than by an officer. Instead of waiting in queues and adding more stress to your travel day, these kiosks are your best friend when aiming to secure some cash back.
11. Using physical paperwork rather than a digital system
The biggest and potentially most costly Tax Free shopping mistake is sticking to archaic paperwork rather than utilising a digital solution, like Planet’s Shopper Portal. The app centralises everything needed for a VAT refund and works with local stores to prefill Tax Free forms so everything is ready when it’s time to return home with your prized purchases.
So what does this mean for you?
Say goodbye to the piles of paperwork — No more filling out forms for each purchase. Planet does the legwork here.
Track your refund and enjoy preferential rates. That means less time wondering when your money will arrive and more time enjoying your new swag.
Receive your refund directly through Planet because cheques are so Y2K.
Adios to jumping through hoops and haggling with shopkeepers. This is the future of Tax Free shopping and the easiest way to bypass all of the common mistakes.
Learn more about Planet’s Shopper Portal and how it can make a difference for your Tax Free experience.
Planet is the all in one Tax Free shopping companion
The ever changing, forever confusing Tax Free shopping process can be a real doozy. Rather than struggling every time you travel abroad and purchase an item eligible for a VAT refund, Planet simplifies the process.
Through a streamlined digital approach that centralises necessary information, Planet consolidates the Tax Free process. With 30+ years of Tax Free experience, our digital solution was designed to make your life easier. It’s as simple as that.
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