Switzerland isn’t exactly an affordable country. Still, a lot of people wonder if Swiss watches are actually cheaper when you buy them in Switzerland simply because they don’t need to be shipped to other countries. Let me give you a quick answer!
Is it cheaper to buy a watch in Switzerland? No, watches aren’t necessarily cheaper in Switzerland. Swiss watches almost always have the same price all over the world. The only price difference between countries is the VAT and customs duty that are charged.
Now that we’ve gotten that out of the way it’s time to dive into the details a bit more. Let’s first take a look at the factors that influence the price of Swiss watches and how they influence the price. Finally we will look at the tricks you can use to get the best deal on Swiss watches in Switzerland.
Watchmakers Determine The Price
First of all it’s important to understand that most watchmakers have strict control over the price at which their watches are sold. Most Swiss watches are considered luxury items. One characteristic of a luxury item is the fact that they have a premium price.
Watchmakers are completely aware of this. Pricing is probably one of the most important ways they can preserve their luxury image. There is a reason why you never ever see a discounted Rolex. It’s because Rolex forbids retailers from discounting their items to a certain extend.
Most watchmakers will have these kind of arrangements with their retailers. That’s why most watches will cost almost the same everywhere you go. Of course there will be some difference between countries but these differences aren’t huge.
Supply And Demand
Secondly supply and demand play a huge role in determening at which prices Swiss watches are sold. If demand in a specific country drops, prices normally follow.
The major problem with this is the fact that demand for luxury watches almost never drops and has been incredibly consistent throughout the years. Add to that the fact that watches are very popular in Switzerland and you have another reason why watches aren’t cheaper in Switzerland.
Besides that the price of Swiss watches could also drop when there would be too much supply. However, this is also never the case since most watch companies have a good idea on how many watches they have to produce to meet demand.
Cost Of Living And Exchange Rate
Besides the above stated factors it must also be noted that Switzerland, in general, is a very expensive country. Wages are high compared to other countries in the world (including the United States) which means that the items that are being sold naturally also have a higher price.
Furthermore the exchange rate of the Swiss Franc against the US dollar is also highly unfavourable for most tourist looking to buy an affordable watch in Switzerland. This also makes it a hard task to find a good deal in Switzerland.
One factor that does influence the final price of your typical Swiss watch is the value added tax (VAT) that is included in the price. This is a factor that differs strongly between countries and therefore does change how your wallet feels about the purchase.
In Switzerland the VAT that is added to the price of the watch is typically 7.7%. In other countries around the world VAT is normally a lot higher. For example, the United States has a VAT of 10%. Other countries on the European continent typically have a VAT that reaches the low 20’s.
That means that, once you bring the watch back to you own country, you will still have to pay the VAT that is applicable in your country. On top of that, there is one other factor that makes buying watches in Switzerland a bit more expensive. That factor is called customs duty.
Most likely all countries in the world have customs duty. This is a tax that countries charge in order to protect their own economies. One of the things this tax accomplishes is that people don’t buy to many cheap items abroad and bring it back to their own country. Like expensive, Swiss watches.
If you live in the United States you are allowed to bring back $800 worth of watches without having to pay customs duty. If your watch is worth more than that you will have to pay.
How much you have to pay depends on Customs. Unfortunately there isn’t a straight answer to the question how much customs duty you will have to pay. Looking around on forums I found that generally, people pay around 3-5% customs duty.
That means that when you buy a $1.077 watch in Switzerland, you will have to pay 3-5% customs duty over the amount that exceeds $800. In other words: $277 * 3-5% = $8,31 – $13,85.
Tips On Buying A Watch In Switzerland
If, for whatever reason, you’re still looking to buy a Swiss watch in Switzerland then there is certainly a good tip I want to give you before you make your purchase.
Most watches that you will buy have a retail price above CHF 300. That means that they are elegible for a VAT-discount. As said before Switzerland has a 7.7% VAT. However, foreigners can get their VAT back via customs.
All you have to do is obtain a receipt that shows that you bought CHF 300 worth of items, at one time in one store. Furthermore you will need to get a tax-free form from the store at which you bought the watch. You can identify these stores via the tax-free stickers on the shop windows.
Also, bring you passport while buying the watch since you will need that to fill out the forms. Once this is done you will be able to go to the customs desk at the Swiss airport. There customs will want to see your purchased goods before they stamp you forms.
You can then take these forms to a private company like Global Blue (they work world-wide) and claim your tax refund. Typically this company also charges a small fee for their service which means you will get around 6.4% back instead of 7.7%.