Are luxury brands still cheaper in Europe in 2024?

Are Luxury Brands Still Cheaper In Europe In 2024?

There’s no doubt that visiting Paris is always a good idea, whether it is for shopping or not. However, those of us who are luxury lovers are particularly motivated to visit the city of light, as it’s oftentimes much cheaper to shop there than here in the States. Or at least it was until recently. That’s right, thanks to the recent luxury price hikes and price harmonization efforts of certain brands, it’s no longer as advantageous for American luxury enthusiasts to shop abroad. Though the options for savings still exist. Yes, you’ve read it correctly, savings can still be made by shopping for luxury in Europe in 2024. Find out how that’s possible as you scroll through this article!

Why are luxury brands typically cheaper in Europe?

So, we’ve all heard those stories of fellow luxury lovers saving substantial amounts by shopping in Paris. But how is that actually possible? Well, the short answer is: VAT refunds.

VAT is a sales tax applied to goods and services within the EU. Non-EU residents, however, are usually eligible for a so-called VAT refund on purchases they make while visiting the region. This refund typically ranges between 12 and 21 percent (depending on the country), significantly reducing the final price of the goods for the foreign buyer.

Additionally, companies are often able to price their goods cheaper when selling them in their home market (which Europe is for many luxe brands) due to low transportation costs and no expenses related to import/export. I, however, wouldn’t put much hope on this in 2024, as a lot of brands have recently announced plans to harmonize prices worldwide, which essentially eliminates the home-market savings by making the prices the same across the regions. Hence, the biggest reason why foreign shoppers are able to save money by shopping in Europe is VAT refunds. But how do you apply for one?

How to get a VAT-refund?

Well, first things first, one must be at least 16 years old to apply. If you are, then you can request a VAT refund form when making your purchase. Btw, there is a minimum purchase requirement of €100.01 per transaction to be eligible for a refund in France (purchase minimum varies from country to country).

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If your purchase meets the minimum purchase requirements (which it most likely does if you are buying luxury goods), go ahead and fill it in. Doing this right away will save you a significant amount of time at the airport’s customs office, which is where you will have to present the completed refund form and purchased items for inspection.

The officer will verify the form details and products before stamping for approval. Then, proceed to the VAT refund counter to collect the refund in cash or as a credit on your card, depending on the provider. Note that administrative fees may apply, reducing the total refund amount.

FIY: American shoppers should anticipate US duty charges when returning back to the US. And while those aren’t anything major, they can indeed offset some of the savings obtained via the VAT refund.

A real-life shopping example

Now that we’ve learned why luxury brands are typically cheaper in Europe and how one can apply for a VAT refund, it’s time for some math!

Let’s say we are looking to purchase the Chanel Classic Flap in the size “small”, which currently retails for $10,400 plus tax in the States (yes, Chanel just recently had another price increase)! Sure, we could simply go ahead and purchase it here, which will set us back $10,400 + tax (for the sake of this example, let’s assume the approx. sales tax of 10 percent). So, we are going to pay a total of around $11,440.

Chanel Small Classic Flap Bag in Black Caviar Leather
Media Credit: Fashionphile

But why pay $11,440 now when we can wait until we go on a summer vacation to Paris, where the same bag can be ours for €9,900 with the potential of receiving 12 percent of the amount back (the current VAT refund rate in France)? See the full calculation below.

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Buying the Small Chanel Classic Flap in the US vs. Europe
Price of the bag in the US$10,400.00
Price of the bag in Europe (1EUR=1.08)€9,900, or $10,670
Total cost of the bag in the US (approx. sales tax of 10 percent)$10,400+$1,040 =$11,440
Total cost of the bag in Europe (1EUR=1.08)$10,670.00
Potential VAT refund (12%)$1280.40
US import duty (5.3 %)$565.51
Total cost of the bag in Europe (incl. VAT refund and US import duty)$9955.11
Total savings$444.89
Potential savings from purchasing the Chanel Classic Flap in Paris

By taking a look at the numbers, the findings are clear: savings can still be made when purchasing abroad! Though we must admit, they aren’t as impressive as they have been in the past ($445 in 2024 compared to over $700 in 2020). But this can also be attributed to Chanel’s global price harmonization strategy, the goal of which is to make prices the same around the world.

Will other luxury brands follow suit? Time will tell. But for now, let’s enjoy the savings that are still available! So, if you happen to be in Europe this summer, make sure to stop by your favorite boutiques.

xoxo’s, Masha S.

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