I’m not one for fanciful purchases, but I think there are many those around me who are. So while we were expecting to visit Galleries La Fayette in Paris and Harrods in London, I certainly did not expect to make multiple trips nor to bring back a number of luxury bags, amongst other luxury items. Case in point: It felt very strange that we had multiple huge shopping bags from top-end brands and yet was still taking public transport to get around London.
It turned out that there were a number of people who learnt of our Euro trip and wanted us to help them buy back some luxury bags because apparently it was much cheaper to get the same brand and model in Europe. For a sense of scale, I’m now a Harrods Gold tier member (with a spend between £5,000 and £9,999 a year) and had sufficient points to cover sandwiches for one lunch for the family.
What’s interesting for the Gold tier member is a choice of two personal 10% discount days, which is also applicable to online purchases, particularly since I don’t think I’ll be back in the UK any time soon.
Before I carry on further, I just want to add the caveat that it’s worth noting the upcoming analysis is specific to the example and the ballpark figures will not be applicable for different goods, brands, models and countries, and even time of transaction depending on the various laws and regulations at that point in time. So with all that said, let’s get down to the real deal for comparisons and check out Louis Vuitton’s OnTheGoMM Tote Bag and the various prices as listed on the respective country websites for an example:
- Singapore LV: S$ 4,350
- UK LV: £2,250 = S$3,757.50 (at S$1.67/£ on 1 Oct 2023)
- France LV: €2,450 = S$3,552.50 (at S$1.45/€ on 1 Oct 2023)
These prices looks like a massive discount and it’s worth splurging on a couple to bring back to Singapore and even sell them to make the spread. But taking these prices at face value fails to account for all the added-on costs that come along with such transactions imposed on travellers, which I will subsequently demonstrate.
First, unless one is already holding onto a lot of pounds or euros, the more likely scenario is that the currencies would have been bought at a much poorer rate or there would be some foreign currency transaction fees imposed on the credit card used. In my case, it’s 3.25% fee for the Citibank PremierMiles card for 2 miles per dollar as we planned to go cashless for our entire time in Europe. The MileLion treats this as buying miles at 1.63 cents each but if you’re helping a friend to make the purchase, it’s still sensible for them to cover all such associated costs because they would have to if they make the purchase on their own anyway!
A little side track: Get the Citibank PremierMiles card if you think it’s suitable for you. Just go to the Citibank website and use this referral code: b1801440179O.
And while travellers with primary residence not in France are eligible for VAT refund, this is no longer a thing in the UK unless the goods are delivered directly to an address outside the UK. So no more VAT refund for shopping in the UK, all thanks to Brexit. Moreover, there may be other criteria to qualify for VAT refund introduced by the retailer, such as a minimum purchase of €100 in a single receipt and you also need to allocate sufficient time to complete the documentation at the airport or train station. So it’s great if you eventually get your refund, which also means it’s that much more worth it to buy in Paris than in London if you’re visiting both locations. There is some ongoing news that VAT refund may be reintroduced, but will likely happen sometime in 2024 or 2025. In any case, assuming there are no refunds and foreign currency fees being included, this is where we are:
- UK LV: S$3757.50 + S$122.12 = S$3,879.62
- France LV: S$3,552.50 + S$115.46 = S$3,667.96
Second, all goods imported into Singapore are subjected to the 8% Goods & Service Tax (GST) (9% on/from 1 Jan 2024 onwards), regardless of whether such goods have already been subjected to an equivalent tax by the export country, and even if the goods are solely intended for personal use or consumption. There is a small value that can be granted GST relief depending on the period away from Singapore, but for such luxury bags at stratospheric prices, the GST relief barely puts a dent in the overall GST amount.
Payment can be done online via the Customs@SG web application and then going to the Red Channel manned by ICA personnel upon arrival into Singapore.
Assuming these are necessary costs, we have:
- UK LV: S$3757.50 + S$122.12 + S$260.60 = S$4,140.22 (~5% discount)
- France LV: S$3,552.50 + S$115.46 + S$244.20 = S$3,912.16 (~10% discount)
While you might think it is possible to get away with this, getting caught for not declaring could be a very costly affair. As recently as May 2023, ICA’s press release shared that 115 travellers had been caught for not declaring. As stated under the Customs Act, any person who is in any way concerned in any fraudulent evasion of, or attempt to fraudulently evade, any customs duty or excise duty shall be guilty of an offence and will be liable on conviction to a fine of up to 20 times the amount of duty and GST evaded or jailed for up to two years. Not at all worth the risk if you ask me.
Third, there is opportunity cost involved in helping somebody to be their personal shopper while on your own holiday overseas. What you think may be a simple purchase could easily run into a couple of hours just to take a deviation from your original travel plans to head down to the shop, get the product you’re looking for, and carrying on your way. And that’s assuming that the product is in stock with the size and colour you’re looking for. So unless you’re a middleman who has been doing this regularly with a large pool of customers who want to buy through you and you’re making multiple purchases for a few friends all at once, it may be worth too much hassle unless you already plan to make a trip down to these luxury shops. Additionally, you also have to ensure that there’s sufficient luggage space and capacity for the return trip to fit these goods. Because one thing we learnt is that the bag or the pouch may be small, but the packaging that comes with us is way larger! Something like $100 to $200 for all the effort (and that’s <5% of the Singapore price) to transport this goods halfway across the world essentially means you should get the items in Singapore after you come back instead and save yourself the trouble.
Just to conclude, it was an interesting experience to make these purchases for friends and realised that there are some money-making opportunities for some additional effort if one really wants to put themselves through the whole process. As a final shoutout, if anybody’s making a trip to London, do hit me up if you’re planning to make a Harrods trip because I have that personal 10% discount day which you can benefit from too.
Making Cents 