How travelers can get money back

Travelers to Europe may leave money on the table when purchasing goods.

I learned this on a recent trip to Italy. My girlfriend, who bought shoes in Venice, was able to claim a refund of the value-added tax she paid on the purchase.

In the end he got 17 euros (US$20) out of a total purchase of 155 euros (US$181).

Value-added tax refunds, known as VAT, can cost US travelers to Europe “a lot of money,” depending on what they buy and in which country they buy it, said Sofia Markovich, a travel consultant and founder of Sofia’s Travel.

Bringing back a few extra dollars after a European vacation may go some way to defraying the high cost of air travel due to the Iran war, and Euro-US dollar exchange rate that has declined in recent years.

However, we would have missed it if the Italian shopkeeper hadn’t asked if we wanted the necessary documents to claim a refund later, which we readily did at the airport kiosk in Rome.

Many times, stores don’t present the option to customers, experts say.

“You have to remember to find [the paperwork] in the store, because not all stores will remind you of it,” said Markovich.

For some, the extra hassle — including extra stops at the airport — may not be worth it for the low-priced items, says Sally French, travel expert at NerdWallet.

“It’s a nice thing to have, but I don’t get to the airport early enough to save $10,” she said.

Surcharges are taxes on domestic consumption, such as sales taxes levied by the US government and local governments.

VAT is the most common form of taxation in the world, used in more than 170 countries around the world.

European countries charge different VAT rates, which can also vary by product.

Standard VAT rates range from 8.1% in Switzerland to 27% in Hungary, according to the Tax Foundation.

Spain, for example, has a standard VAT rate of 21% but lower rates for certain items, such as 10% for sunglasses and 4% for books and magazines, according to Global Blue, a payment company that helps recover VAT.

However, not all purchases are eligible for a refund, experts say.

For one thing, refunds are usually only for merchandise, not specific categories like hotels and dining, experts say.

Many states also set a minimum purchase price to qualify.

“In general, you have to pay a minimum price in one shop – you cannot combine purchases from different shops to reach the required price – so if you buy a lot, you will benefit from finding one place where you can buy a large one,” Rick Steves, a travel expert who has written a series of guide books, wrote in an article about VAT refunds.

For example, countries like Greece and the Netherlands require travelers to spend at least 50 euros (US$58) at a retailer to get a refund, according to Rick Steves’ Europe, a travel and tourism company. In Italy, the minimum is 75 euros (US$88); France for 100 euros (US$117). In Switzerland, the minimum is 300 Swiss francs (US$384). Spain, on the other hand, has no shortage.

Claiming a refund is “really appropriate” for travelers who buy luxury goods, such as high-end fashion or jewelry, Markovich said.

“It could be hundreds of dollars back, or thousands, depending on what you’re buying,” Markovich said. “I know people who go to Europe just to shop.”

Fellow travelers should not use their belongings before leaving Europe, Steves wrote.

“If you arrive at the docks wearing your new Dutch clogs, the officials may refuse you a refund,” he wrote.

There is usually a multi-step process to claim a VAT refund, experts say.

Participating vendors typically must fill out a return document, and will need the traveler’s passport (or, sometimes, a passport photo) to do so, Steves wrote.

In most cases, travelers will need to process those documents at their last stop in Europe, which may be an airport, Steves wrote.

“At some airports, you will have to go to the tax office to get your documents stamped and then go to a separate VAT refund service, such as Global Blue or Planet, to process the refund,” Steves wrote. “At some airports, one VAT desk handles everything.”

Refund services usually charge a fee – usually around 4% or more – so travelers are unlikely to receive the full amount of VAT, Steves writes.

Travelers should remember to process documents at their destination in the European Union, Steves said.

So, if you buy sweaters in Denmark, pants in France, and shoes in Italy, and you fly home from Greece, get your documents stamped at the airport in Athens,” he wrote, adding, “And don’t forget: Switzerland, Norway, and Turkey are not in the EU, so if you buy in one of those countries, get your documents stamped before you cross the border.”

Customs offices are sometimes located in front of airport security, and agents may ask to see travelers’ unused luggage, he writes.

The whole process was easy for us: It took about five minutes from start to finish at one of the digital kiosks at the airport in Rome, which we reached just before the security check. Others will need to budget for more time if they want to get their money back, experts say.

In some countries, “there’s a line, and then you have to budget for extra time when you go to the airport to wait in that line,” says NerdWallet’s French.

“I would wonder if it’s worth spending time at the airport,” she said. “It makes sense if you’re buying a $5,000 designer bag. But time is money, and it’s okay to skip saving a few dollars here and there in the time and labor involved.”