Money Matters, London
As of midnight tonight (3 January 2011), goods and services in the UK just got EVEN more expensive with an increase in Value Added Tax (VAT) from 17.5% to 20% as part of the Government's austerity measures. For those not familiar with VAT, it is a tax applied at the point of purchase and by law it must be included in the advertised price.
The good news is that most international travellers should be eligible for VAT refunds provided that they are willing to put in a bit of time and effort (a process which is well explained on the website listed below). Refunds are potentially applicable on most goods and services, except on the following items (with some exceptions):
•new or used cars
•a boat you plan to sail outside the EU
•goods worth more than £600 exported for business purposes
•goods to be exported as freight
•goods that need an export licence - except antiques
•bullion over 125g, 2.75 troy ounces or ten Tolas
•mail order goods, including Internet sales
•goods used or partly used in the EU, such as perfume
•service charges, such as hotel expenses
In summary, the process for reclaiming this refund is as follows (adapted from the Revenue Service website):
"WHEN YOU PURCHASE THE GOODS
First, you need to choose a shop that operates the VAT Retail Export Scheme. It's a voluntary scheme and not all shops operate it, so you need to check before you buy anything.
To obtain your VAT refund, you need one of the following documents. The shop will give you this:
•a VAT 407 form
•a shop or refund company's own version of form VAT 407
•a VAT Retail Export Scheme sales invoice
You need to fill in the form when you make your purchases, in front of the retailer. The retailer will ask to see evidence that you are eligible to use the scheme, such as your passport.
You also need to agree with the retailer how your refund will be paid. Some retailers will pay you the refund directly, others will operate through a refund company, and some will have an arrangement with a refund booth at the point where you leave the UK.
You may not get all the VAT back. The retailer and/or the refund company may make a charge to cover the cost of handling your form. If they do, this will be deducted from your refund before you receive it.
"WHEN YOU LEAVE THE COUNTRY
If you're travelling outside the EU, you must show your goods and your refund form to UK customs staff at the airport you're leaving from. Make sure you arrive at the airport early so that you have plenty of time to deal with the customs staff before your departure.
If you're travelling to another country within the EU before you finally leave the EU, then you must show your goods and refund form to customs officials in that country when you leave it.
If you are leaving the EU on a flight that stops in another EU country before leaving the EU, then you have two options:
•if you're taking your goods as hand baggage, then you must show them to customs officials along with your refund form in the last EU country you stop in before leaving the EU
•if you're checking your goods in as hold baggage, then you must show your goods and your refund form to UK customs officials before checking in
If there aren't any customs officials at the port or airport you're leaving from, there will be a telephone you can use to ring an official or a clearly marked customs post box in which you can leave your refund form. Customs officials will collect it from there and if they are satisfied that all requirements have been met, they will contact the retailer to arrange your VAT refund.
Once your form has been approved by customs officials, you can then obtain your refund in the way you agreed with the retailer when you made the purchase. You will use one of these methods:
•post the form back to the retailer to arrange payment of the refund
•post the form back to a commercial refund company to arrange payment of the refund
•hand your form to a refund booth to get paid immediately
There may be a charge to cover the cost of handling your refund. This charge will be shown on your refund form."
In summary, it's a bit of a performance and potentially quite a time consuming exercise which you probably need to give some thought to in advance so that you collect the necessary paperwork and allow sufficient time at your point of departure. However, the prospect of being able to claim back up to a fifth of the cost of an item or service is an attractive one, particularly given how expensive Britain (and particularly London) is for the tourist, and if it helps you stretch your budget that bit further, then it could be well worth the effort!
I happened to look closely at one of my creidt card receipts after having been in London for a day or two. After seeing that my entire credit card number, as well as the expiration date on the card were a part of my receipt, I kept a closer watch on where those receipts went!
After I discovered this, I watched very carefully and only 2 places that I used plastic X'ed out all but the last 4 digits of my credit card numbers. I'm not sure about elsewhere, but here in the U.S., it is normal to have most of the credit card info represented as X's. with the whole number and the expiration date, anyone can use that card for online or mail order purchases!
Just be aware that most places leave your entire credit card information intact on the receipts.
Update.... on a more recent trip I was watching this and most places had gone to X'ing out all but the last 4 digits of the card. I was glad to see this but there were still a few places who hadn't updated their methods.
If you are coming to London from the US a good thing to remember is to change your $ to pounds before your trip. The exchange fee's at the airports are outrageous. I belong to AAA so i was able to go online and order some money to be directly sent to my home or my local AAA office if I preffered. This way there was no hassle and no waiting in line and NO HORRID FEES! There is still a small fee but not much. The website gives you alot of ideas on how to go about getting the money you need also for the type of trip you are taking.
Money... Cash, Travelers' Cheques, ATM/bank machine cards, credit cards... Traditionally, travelers' cheques have been the secure answer to a travelers' needs. Banks and Exchange bureaus will exchange them for a fee if you can't get to an office of the issuer like Thomas Cook or American Express. And they're still a viable, and secure option.
I gave up TC's. I rely mainly on my ATM card and my credit card. I don't think my ATM card would work as a debit card outside of Canada, possibly the US but it's also the money machine card.
1. The ATM card will default to your PRIMARY ACCOUNT ONLY . For most people that is your CHEQUING account if you have that connected to your ATM card. At least that's been my experience. You very likely won't get a choice of what account to take your money out of. Make sure your PIN number is 4 digits, NO LETTERS Just numbers!
2. You can also get cash advances off your credit card. Make sure you know what your daily limit for cash advances is. Translate this into the local currency . 500 dollars a day is *not* 500 pounds. On credit card cash advances, interest starts adding up the minute you take out that advance. Make a payment to your credit card before you go, ideally to put the card into a credit balance. Then you don't get any interest charged when the balance is below zero. That goes for purchases as well as cash advances.
3. Have a backup. Once in awhile an ATM won't accept your card. In that case i just used my credit card for a cash advance. Make sure you have a backup, either 2 atm cards for 2 different banks, or an atm and a credit card that you can get an advance from. If you feel more comfortable having those travelers cheques as a backup, go ahead. If you get them in local currency, chances are you *may* be able to use them in a shop as local currency instead of going to the bank to get cash. You can also get a cash advance on common credit cards like Visa and MasterCard in a bank though you may have to show your passport.
I had ordered my money from the bank before travelling over to London. I had asked many other questions - for example how much money to have on hand before I started to withdraw from the ATM. I ordered my chosen amount and the bank gave me 50£ notes. I was informed very few places accept the 50£ notes due to so much counterfeiting
I must have caught some shopkeepers off guard with my Canadian accent because I did manage to get rid of them, but I do know that the next time I go back I will order my money without any 50£ notes.
After reading all the warnings about pick pockets, etc., I made so many plans for safety before I left. I get home 2 days ago and my credit card has been copied and $2000 spent!!! I put my card in a small purse around my neck and tucked into my jacket, and it never left my side in London except for the 6 stores where I used it. I guess Ill stick to traveler's checks in the future. Now I discover that credit card cloning is rampant in London. I will get my money back from Visa, but the stores and police could care less. They just told me to drop it and get my money back and no effort was made to find the culprits even though the places and times the card was used were given and several stores admitted there were surveillence cameras. No wonder its so rampant! Its so easy to get away with and no one cares! Dont use credit cards in London unless they are pin and chip types!
When eating out check your bill to see if the establishment has added a service charge. If it is not clear from the bill whether this has been done then ask. If they have added a service charge do not feel obliged to add a separate tip. A favourite ploy is to add a service charge and then, if you are paying by credit card, leave the total amount empty. If you don't realise you may add some more to the total for yet another tip.
Some establishments are just greedy and will try anything, epecially in tourist areas where they are not too concerned about repeat trade.
I had a rather unpleasant experience at a burger establishment in Soho. They included service in my bill so I didn't leave anything else. As I left a volley of obscene verbal abuse followed me out the door. Nice. As if a tenner is not enough for a cheeseburger and chips.
Get money from the ATM, not one of those kiosks at the ariport (like American Express). I've known this, I knew this but did it anyways. There are ATM's right outside of baggage claim right before you get onto the Underground. Even if you order money over the internet and you think you get a good rate they don't have to honor the rate when you go to get your money.
When withdrawing money from cash machines in public places, be very aware of the people around you. You're better using a machine where there are a queue of people than being a solitary user (easy target).
Thieves will use lots of different ploys to distract you 'oh, I think you've dropped something' etc....
Unless you're part of the Royal Family, the job you currently hold does not pay you enough to make London "cheap". It's not that the city is that ridiculously overpriced, it's just that your currency will not put up much of a fight against the £. No matter how much of a pep talk you give your dollars before they leave your wallet, they just won't be able to last that long in this vicious economy. Don't say I didn't warn you!
Don't tip the barman when ordering a pint of beer! It would give you immediately away being a stranger. However, should you get executed like Queen Anne Boleyn, it is according to custom to distribute a few pounds between the executioner and his assistants (could anything be more bizarre and gruesome than the act of tipping the headsman?).
Avoid CHEQUEPOINT to change your money to GBP.
They promise: "0% Commission (big), when you buy currency (very small)".
The text was confusing and they really charge up 9,8% commission for changing EUR or any other currency to GBP.
When you've been scammed, they explain to you that they do not charge commission when you buy a currency other than GBP.
These kind of slighty honest practices, should be pursued by the responsible authorities in London.
Evita cambiar EUR u otras divisas a GBP en los establecimientos CHEQUEPOINT.
Prometen "0% de comisión (en grande), cuando compras divisa (muy pequeño)".
Como se puede apreciar, el texto es confuso y, al final te cargan hasta un 9,8% de comisión por comprar GBP.
Cuando ya te han timado, protestas y te explican que no cobran comisión al comprar otra divisa distinta a GBP.
Ese tipo de publicidad engañosa y prácticas poco honestas, deberían ser perseguidas por las autoridades responsables de Londres.
If you need to change money during bank working time, no problem, any Bureau de Change can do it for you and the rates are nearly the same, but at weekends and after banks close, they drop dramatically the rates, so plan the amount of English pounds you need, you can use Euro anyway.
In Colonnade Walk, the pedestrian area adjacent to Buckingham Palace Road, separating Green Line & Victoria Coach Stations, is an ATM that charges £1.99 per transaction...
I cannot help but be cynical & observe the location, opposite the central thoroughfare into the Green Line terminal, where most of the international coaches in to London, pick up passengers & unload the unwary tourist, unwise that using an ATM in most places in London, is free...
The Colonnade Walk terminal is deliberately sited to cash in on travellers laden with heavy luggage, who do not care to walk too far to find a free ATM to pay for their next ticket, or obtain £'s from their bankcard...
Buckingham Palace Road is 1 of the few streets in London, where an on street, 'hole-in-the-wall' cash machine isn't obvious, so if you're not local, the cash-in on travellers at the Colonnade Walk site, must be lucrative...
There is a free to use ATM inside Victoria Coach Station's main terminal, but it's not easy to locate, behind refreshment vendors & bustling tourists, but if you go towards the far end of the building, where the main entrance doors are, it's within the foyer, there...
Be very careful when using ATMs in busy areas (especially Oxford Street). Make sure NO_ONE can see you enter your pin no. A new scam is someone watches you and just at the right time (when your card is about to be returned) they will ask you if that is your £10.00 note on the floor. While you are distracted an accomplice takes the card which the machine has just returned. All over before you notice anything. DO NOT LET ANYONE DISTRACT YOU WHILST YOU ARE USING THE MACHINE!!