Buying an Engagement Ring Abroad with Merchandise in Baggage
Jon and I purchased my engagement ring while we were in London, last December. He spontaneously proposed at the London Tower bridge, and it was fun to ring shop together as a giddily newly-engaged couple. At the time there wasn’t much information on the internet about how to make such a large, significant jewelry purchase abroad. The Tiffany sales assistants (from both London and back home in California), managers, and coordinators guided us through the whole process. I thought I’d share our experience here in case it’s helpful to other soon-to-be-engaged couples!
Below is a list of tips, arranged in order to match the process from start to finish. The most unique service we used was “Merchandise in Baggage (MIB)” — this is a method by which, for large purchases, you can have the value-added-tax (VAT) removed at the point of sale. (Instead of the normal way, which is to pay VAT upfront, and then apply for a refund at the airport). Read on for more details!
- Go to boutiques early on in your trip, because if your closest store doesn't have what you're looking for, it may take a few days to transfer stock from other stores in the country. Interestingly, the sizes and shapes popular in London are slightly different from what’s popular in LA. So we did have to request a few transfers just to see more of what we were looking for.
- Go to boutiques with clear criteria in hand. We gave the staff parameters for carat size, color, clarity, and even the specific dimensions (depth, table diameter, crown angle, pavillion angle, etc) of the diamond. Of course, we also gave them a budget we wanted to stick to!
- Visit a domestic boutique ahead of time to check out prices, OR if you’re already abroad, call your domestic boutiques to gauge the price in the US. Tell them you want to know the ballpark pricing of a diamond that is roughly X carats, X color, X clarity, etc. Of course, no two diamonds are exactly the same, so you can’t truly compare prices… but hey, at least you can get a ballpark idea of whether it’s cheaper to buy domestically, or in the country you’re visiting. Many sales assistants are hesitant to discuss prices over the phone, but be persistent and call around a couple different stores and you should be able to find the information you need.
- When buying in europe, calculate the price as:
Price paid if bought in Europe: GBP → convert to USD → subtract VAT ~12%
Price paid if bought in California, US: USD → add 8% tax
(12% is a conservative estimate of how much VAT they will refund you. It could be slightly more or slightly less depending on the methods you choose to process your VAT.)
- Note that you may have to pay US customs duty when returning to the US. Upon returning to the US, you declare items purchased abroad. Each person is eligibile for $800 duty free. After that, it seems up to the discretion of the customs officer.
- Download the app "Whatsapp" for international text messaging. The Tiffany SA asked me right away to keep in touch via this app, and she gave me regular updates on what diamonds she was able to find in the UK based on our criteria and when she would arrive at her store. This app was handy for keeping in touch with our international friends as well!
- Confirm the numbers. Juggling the conversion factor, different geographical pricing, estimates of VAT %, etc can easily get messy. Confirm the price in GBP, how much VAT is included in the price. And if you've been offered the MIB service (more on that below), confirm the fee that the store will charge for the service.
- Merchandise in baggage. The Tiffany manager and SA offered the MIB service to us, which is a simplified way of buying something abroad. The usual process is to pay for your item, the store gives you a VAT form, you show up at the airport a couple hours early to process your VAT at the VAT desk, and then you either get a smaller refund back in cash OR you wait 1 - 6 weeks for it to be refunded to your credit card.
MIB means that at the point of purchase, they remove the VAT right away and you only pay the store the net amount. The only catch is that you can't walk out the door with your purchase back to your hotel room -- it will be hand delivered to you at the airport before your return flight.
- I'm not sure what the threshold of price is for MIB, but it sounded like it was done only for very large amounts of money, at least over ~$35,000 USD. We were told it's most commonly used for commercial merchandise, art pieces, etc.
- We were escorted to a private VIP room where we completed our purchase Also, we were told was ours for the entirety of the day. We could lounge there, or leave our things there if we wanted to wander around the city and shop more and come back.
- The floor manager oversaw everything. SA dealt with specifics of the ring, e.g. confirming my ring size and sending it off to be resized. The MIB coordinator took down our flight details and gave us the contact info of the messenger who would meet us at the airport and give us our ring (name, phone number, what time and that we would meet at the VAT desk)
- The day of our flight, we arrived at Heathrow airport 3 hours earlier than boarding time to ensure we had enough time to process our VAT for our regular purchases as well as and meet our MIB messenger and sort out that process.
- VAT processing was straightforward and expedient at Heathrow. All in all took perhaps 25 min. (A stark contrast to the disorganization of Italy’s Rome-Fiumicino airport!)
- We texted our MIB messenger that we had arrived early and to let us know when he arrived
- He was early as well, and we met him at the VAT desk and were escorted to a private room to visualize the merchandise. It was in a sealed bag that we opened in front of a VAT officer. The VAT officer processed the paperwork confirming that the VAT had been removed at point of sale, our passports, etc.
At this point, the ring was ours!!! We thanked and tipped our messenger for a safe, punctual, and smooth transaction and went on our merry way back home as a newly and happily engaged couple!! I hope this post was helpful, don't hesitate to ask if you have any questions :)