Did we get Scammed? TAXFREE

16 Days in Italy Sept 2012: Venice shopkeeper offered to prepare the paperwork for us to get VAT refund for a 400 Euro purchase before leaving the city. (We didn't/don't know tax rate) We went to the "TAX FREE" office just off St. Mark's square the next day and came away with 38 Euros. Now we are being BILLED from this same organization on the credit card we used $79 US plus the foreign transaction fee charged by VISA of another $6. We contacted VISA to have the charge investigated. Turns out that their clever wording has our signature with conditional language: IF THE INSTRUCTIONS ARE NOT FOLLOWED ... WE WILL BE BILLED X AMOUNT. I think we've been scammed. Others experience this??

Posted by Andre L.
Tilburg, Netherlands
2176 posts

This looks strange to me. VAT refunds are processed upon leaving EU (meaning: after you cleared security and passport in an airport, after you cleared the processing area in a cruise terminal). ========== I found the company you are referring to with an easy Google query. What they do it not a scam, but it is a gotcha. They will "advance" you the money for the equivalent VAT refund without interest, upon condition that you (1) get your form stamped on customs and (2) send it stamped to the TaxFree office within 21 days, authorizing them to receive the refund in your name. If you don't do that, they will collect the VAT from your credit card because you didn't follow the procedures to authorize them to collect the refund proper from the tax authorities! The Italian page in their website has a section for merchants. They pay commissions to merchants on business they get. And how can one pay commission on a tax refund for full nominal value? Simple: they now too many costumers will not read the fine print and be billed for the VAT. So STAY CLEAR OF SIMILAR BUSINESSES!

Posted by Ed
Pensacola
7978 posts

I'd say you got screwed a couple of ways. IVA/VAT in Italy is 20% if what sticks in my mind is correct. That would make your refund forty euro, not thirty-eight. Blow off the two euro to a processing/admistrative/commission fee which you could have saved by doing it yourself at the departure point, but it's still something. The rest is a combination of what you and Andre said. These 'tourist refund offices' by whatever name, are operated by TravelEx and others of their ilk - - the same ones that screw you on currency conversion rates. I can't imagine why anybody would go near one unless it's the only game in town and you need to convert a tiny amount of money until you can get to an atm. I can see the ftf, since something went on a crdit card. The $79 is a mystery since 38 euro should be something like fifty bucks, maybe fifty-five with a bad exchange rate. As Andre said, it's a 'gotcha'. You signed something that said you agreed to the sorry deal and you no longer have your receipt and refund document prepared by the retailer. Even if you had them, I'd be too late since VAT has to be reclaimed before leaving the economic zone. You've probably gone as far as you can with Visa. Sorry.

Posted by Nicholas
Seattle, Washington, United States
282 posts

James, the issue doesn't seem to be the shop keeper. It was the company that has this advance refund business. They are the ones that had the screwy language and shady practices.

Posted by Debra
Los Angeles, CA, USA
1001 posts

I did the same thing when I was in Italy a few years ago. I knew my connection out of Italy would be very tight in the morning, so I went to downtown Florence to a similar place and they told me exactly what I had to do - put it in the slot at the airport on my way out, or mail it once I got home. I did so at the airport and never heard another word. That sucks that they didn't explain it to you at the window when you went. In my experiences, doing it at this in-city office was exactly the same as at the airport, it's just that if you do it at the airport, they take the form for you, instead of you having to mail it from the airport once you get there. Also the office I went to was explicitly listed on the form I was given at the shop - perhaps that is where you went wrong? Maybe there are "unofficial" ones that are less legit? No matter where you get the refund you are not going to get 100% of the exact conversion rate, I've done it at the Rome airport on my way out and didn't get 100% either. They're all run by third party people who take a cut. The shopkeeper is not to blame - he just filled out the form just like they always do. He didn't force anyone to get their refund at any specific location.

Posted by Frank
Tresana, Highlands Ranch, CO, USA
10884 posts

The question never asked or answer is - did you follow the instructions for dealing with the tax refund. If you did, then you have a very good complaint and if not, then only you are to blame. And it is not a scam.