By Rick Steves

Every year, tourists visiting Europe leave behind millions of dollars of refundable sales taxes. For some, the headache of collecting the refund is not worth the few dollars at stake. But if you do any extensive shopping, consider that the refund is hard cash free and fairly easy to claim. You just have to bring your passport along on your shopping trip, get the necessary documents from the retailer, and track down the right folks at the airport, port, or border when you leave. (This gives you something to do while you're hanging around waiting for your flight.)
The standard European Union Value-Added Tax ranges from 15 to 25 percent per country. Exact rates change; you can double-check with merchants when you're there.
Unlike business travelers, tourists aren't entitled to refunds on the tax they spend on hotels and meals. Still, you can get back most of the tax you paid on merchandise such as clothes, cuckoos, and crystal. You're not supposed to use your purchased goods before you leave Europe if you show up at customs wearing your new Italian shoes, officials might look the other way, or they might deny you a refund.
To get any refund, your purchase has to be above a certain amount ranging from about $30 to several hundred dollars, depending on the country (except in Ireland, which has no minimum). Typically, you must ring up the minimum at a single retailer you can't add up your purchases from various shops to reach the required amount so if you're doing a lot of shopping, you'll benefit from finding one spot where you can buy big. If you'll be in Europe for a long time, shop near the end of your trip. You need to collect your refund within three months of your purchase.
The details on how to get a refund vary per country, but generally you'll need to follow the same basic steps:
Bring your passport along. You'll likely be asked to present your passport when you make the purchase, in order to start the refund process.
Shop at stores that know the ropes. Retailers choose whether to participate in the VAT-refund scheme. Most tourist-oriented stores do; often you'll see a sign in the window or by the cash register (if not, ask). It'd be a shame to spend big bucks at a place and not have a chance of getting a refund.
Get the documents. When you make your purchase, have the merchant fill out the necessary refund document, often called a "cheque." Make sure the paperwork is done before you leave the store so there's nothing important missing. If they leave any blanks for you to fill out, be sure you understand what goes where. Attach your receipt to the form and stash it in a safe place.
Some stores may offer to handle the rest of the hassle for you (if they provide this service, they likely have some sort of "Tax Free" sticker in the window). If you're charming and at the right store, try talking the merchant into mailing your documents for you and reimbursing your credit card on the spot. (To ensure their records are legally above-board, the merchant may ask you to get the documents stamped at the border, then mail them back to the store.)
If the store ships your purchase to your home, you can still collect a refund (or you may even be able to avoid paying the VAT in the first place). However, shipping fees can be pricey enough to wipe out most of what you'd save in VAT. I wouldn't mail a purchase home just to avoid paying the VAT, but if you're having things shipped anyway, ask for the refund at the shop. (Depending on the country, you may still have to handle some VAT-related red tape ask the merchant.)
Bring your paperwork and purchases to the airport or border crossing, and arrive early.Assuming you left the store with your purchase, receipt, and VAT paperwork (but no refund), you'll need to get the refund processed before going home. If you've bought merchandise in a European Union country, process your documents at your last stop in the EU, regardless of where you made your purchases. So if you buy sweaters in Denmark, pants in France, and shoes in Italy, and you're flying home from Greece, get your documents stamped at the airport in Athens. (If the currencies are different in the country where you made your purchase and where you process your refund say, pounds and euros you may have to pay an extra conversion fee.) 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.
Get your documents stamped at customs. Arrive an additional hour early before you need to check in for your flight, to give you time to find the local customs office and to stand in line. Before checking in, find the local customs office, and be prepared to stand in line. In smaller airports, ports, and less-trafficked border crossings, finding the right customs agent can be tough. If you run out of time and have to leave without the stamp, you're out of luck. At customs, an export officer will stamp your documents and may ask you to present your unused goods to verify that you are, indeed, exporting your purchase. (Some retailers, particularly those in Scandinavia, will staple and seal the shopping bag to keep you from cheating.) It's best to keep your purchases in your carry-on for viewing, but if they're too large or dangerous to carry on (such as knives), have your purchases easily accessible in the bag you're about to check, ready to show the customs agent.
Collect the cash sooner or later. Once you get your form stamped by customs, it takes one more step to get your money back. If your purchases were bought from a merchant who works with a refund service such as Global Blue or Premier Tax Free, find their offices inside the airport (either before or after security). These services take a cut of your refund (about 4 percent), but save you further fuss and delay. Present your stamped document, and they'll likely give you your refund in cash, right then and there. If they'll only issue your refund in the local currency, you can either exchange that cash at home, save it for your next trip, or try spending it at the airport. (Look there's a duty-free shop next door!) Otherwise, they'll credit the refund to your credit card (within two billing cycles, check Global Blue or Premier Tax Free).
If the retailer handles VAT refunds directly, you don't have the option of using a refund service it's up to you to return your stamped documents to the merchant for your refund. You can mail the documents from home, or more quickly, from the airport or border (using a stamped, addressed envelope you've prepared, or one that's been provided by the merchant). Then you wait. It could take months. Look for a refund on your credit-card statement, or for a check in the mail. If the refund check comes in a foreign currency, you may have to pay $30 or so to get your bank to cash it.
Don't count on it. My readers have reported that, even when following all of the instructions carefully, sometimes the VAT refund just doesn't pan out. (For example, they have all the paperwork ready when they get to the airport but can't find the customs official to process it.) These problems seem most prevalent in Italy. Your best odds are to buy from a merchant who knows how to deal with the red tape for you but even that is not infallible.
Only you can decide whether VAT refunds are worth the trouble. As for me, my favorite trip souvenirs are my photos, journal, and memories. These are priceless and exempt from taxes and red tape.