are luxury goods cheaper in europe?

well everything is free on vacation, right?

Hey fam, and welcome back to dumb rich. We have a lot to celebrate this week. First up: a belated Happy Father’s Day to all the dads out there — including uncles, godfathers, dog dads, and every man who’s ever said, ‘Well, money doesn’t grow on trees.’” I’ve learned a lot about money from my dad, starting with the timeless classic: “Cash is king.” Someday I’ll do a post on teaching kids about money and the financial lessons we inherit, but today is not that day. Because today, we’re talking about blowing money on luxury goods in Europe.

Also, breaking news!!!!! It’s Mr. dumb rich’s birthday!!! He doesn’t get a ton of airtime on here (because this blog isn’t about him... jk, kind of), but he is an avid supporter. He tries really hard to keep up with the pop culture references and understands just enough of the lingo to be dangerous. His support is a blessing and a curse. Thanks to dumb rich, he knows exactly what I’m spending money on at all times. Sigh. Happy Birthday, MDR!

Anyway, this summer, we’re heading to Paris and Italy for our wedding anniversary. And it would be a true disservice if I did not share all the research I’ve done on pricing, currency conversion, and tax. So now that we’ve covered the personal celebrations, let’s get into the good stuff.

how i look in every photo mr. dumb rich takes of me

My personal mantra is that money doesn’t count on vacation, so technically if you’re shopping abroad it’s *free*. Just kidding.

Today, we’re comparing three designer handbags, across three countries, to help you figure out where to buy what. This is my version of Olympic training. If handbag arbitrage were a sport, my bestie and I would be gold medalists. You may need a spreadsheet, but you’ve got this.

Here are the bags we’re working with, listed at their sticker prices:

1. Celine Tote — $1,750 / 1200€

2. Loewe Raffia Tote— $1,850 / 1400€

3. Saint Laurent Crochet Tote — $1,800 / 1600€

Right now, the euro is sitting at about 1.15x USD — not ideal for us, but let’s work with it. That means something costs €100, that’s about $115. But here’s where it gets interesting: prices vary by country, not just by currency.

To get local pricing, I open a brand’s website in a new window, switch the region to the country I’m traveling to, and shop like a local. You can probably always translate the page, but sometimes I simply memorize the layout navigation from the US website.

For example, on Celine’s site, switching to “Italy” showed me the bag price in euros.

From there, I converted it to USD. I made this little chart showing the converted cost of each bag in each country before factoring in taxes. So far, it looks like we’re saving money on everything... except Saint Laurent. But we’re not done yet.

Let’s talk taxes.

In the US, unless you live in one of those mythical no-sales-tax states, you’ll pay additional tax on top of the listed price. I live in New York, where sales tax is 8.875%. So we tack that onto each US price.

Europe, on the other hand, includes the VAT (value added tax) in the sticker price. What you see is what you pay. Must be nice. Makes the US system feel a little... deceptive?

Even better: If you’re not an EU citizen, you can get the VAT partially refunded on certain purchases. The exact refund rate depends on the country and the item, but generally speaking, it’s worth it.

The final step to determine the price is to add the tax to the US sales and deduct the tax from the EU sales. Below is the final chart showing the price of each bag, adjusted for US sales tax and VAT refunds in Europe (already converted to USD for easy comparison):

In short, Italy wins. The VAT refund there is the highest, and the final prices are better than I expected, even with the euro exchange rate working against us. I was also surprised to see price consistency across Italy, France, and Spain. In real life, I’ve noticed some differences depending on the store. Lastly, I was super shocked that the Saint Laurent prices weren’t significantly lower.

If you are shopping in Europe, make sure you submit all of the necessary forms to receive the VAT refund. It’s an administrative burden, but it’s worth it on higher priced items!

Conclusion: Yes. Shop. Spend all your money on your Eurotrip. You’re practically making money. Purchases justified!!!!

That’s all for this week fam xoxox