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OOO Newsletter Summer Travel Guide Travel

The Math Behind Buying Luxury Abroad

  • 1-min read
Avenue des Champs-Elysees, camera locked down. In the context of a story about shopping for luxury goods while abroad
MediaProduction / Getty Images

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A European vacation is about two things: Enjoying a change of scenery and acting like I’m Bezos-rich as I gallivant through cobblestone streets lined with luxury shops. And right now is a great time to do just that.

To Americans’ benefit, the euro is the weakest it’s been against the dollar since 2002. Though some fashion houses have adjusted their pricing to smooth sales across regions, there are still plenty of deals to be had for Americans looking to cop a belt or bag from Gucci, Louis, Fendi, Prada.

Even the seemingly not-so-good deals are good because of the dollar’s comparative strength. Take the Cartier Love bracelet, which costs $6,900 before tax in the U.S. and €7,100 in France, inclusive of value-added tax (VAT, or TVA in French).

  • Assuming a 5% sales tax rate, you’re at $7,245 in the states. That’s about even with the price in France, which in USD comes out to $7,242, assuming €1 = $1.02.
  • But: US residents coming home with luxury goods bought in the EU are eligible for “détaxe,” or a return of VAT. For U.S. residents who buy a Love bracelet in France, the VAT return is a sizable €852, or 12% of the purchase price.
  • The détaxe brings the net purchase price down to €6,248 or $6,373 when €1 = $1.02.
  • That represents savings of $872. But don’t forget U.S. duties, which would run you about $455 here (calculate duties here) and you’re down to a net savings of $417, which is roughly the cost of a one-way ticket to France.

TLDR: Buy a Cartier bracelet in France, and the flight there pays for itself.