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Digital TFS: The trend taking the world over

25 March 2017 - As globe shoppers’ attention to customer service grows, merchants and shops around the world are under pressure to give these highly valuable customers an unparalleled shopping experience. And a digital Tax Free shopping process may well be the way forward.

A movement initiated by governments

The shift towards a digital tax free refund process in Europe dates back to 2007, when France pioneered airport self-check-in kiosks PABLO. Since then, numerous governments around the world have fully understood the potential and benefits of this new practice in making their country a more attractive and safer shopping destination. Recently for example, the British government decided to move to a fully digital Tax Free Shopping system to increase further the country’s image as “the place to shop” post-Brexit. Furthermore, Italy deployed its own digital validation system (OTELLO) in Milan Malpensa and Rome Fiumicino airports and Global Blue was the first to support the Spanish government’s digital Tax Free system (DIVA) featuring self-validation Kiosks that are currently being deployed across Spain.

Digital TFS benefits everyone

Compared to the paper-based process, when going digital, visibility of the transaction’s lifecycle changes dramatically as each step of the refund process – issuing, validation, refund – is recorded. 

This new data flow benefits shoppers, merchants and authorities. Globe Shoppers can expect faster export validation at the airport and a smoother VAT refund process. Digital TFS offers big benefits for merchants’ operations too as they are now equipped with more issuing options and, depending on the country’s model, are not burdened with the administrative tasks the paper based process demanded. In parallel, the digitally collected data is a considerable help for authorities and customs when detecting fraud and can be used for important intelligence input. Customs are relieved from long queues behind counters and can monitor transactions based on risk profiles.

Digital Tax Free Shopping is the gateway to a faster, more efficient and safer Tax Free shopping experience for globe shoppers, whose level of satisfaction increases as a consequence. Digital Tax Free Shopping ensures travellers will leave shopping venues with a lasting and positive impression until their next visit.

eTFS®: Global Blue’s referent digital solution

In order to adapt to this market evolution, Global Blue created eTFS®, a portfolio of innovative solutions where paper has been replaced by digital tools and services. Following in France’s footsteps with PABLO’s self-validation kiosks, other countries decided to join the digital venture and trust us to find the right digital solution tailored to their countries regulations. In Europe, Finland, Denmark, Sweden, Cyprus and Estonia are now running Global Blue eTFS® branded kiosks.

On the other side of the world, in Singapore for example, where all merchants now use digital solutions, Customs have deployed self-service kiosks both at landside and airside, reducing queuing time from one hour to only three minutes. The Singapore Tax Authority (IRAS) has access to the full data and software can detect the riskier transactions, allowing them to be processed manually.

In Japan, Global Blue has issued retailers with equipment integrated to the point of sales system that scans passports to avoid the need for any manual input, speeding up time spent at the till – a relief for both customers and retailers. In Estonia, where the focus is on the border with Russia, digital TFS 2015 includes electronic issuing solutions used by merchants as well as kiosks and PC software used by customs for an overall more effective export validation process.

In Cyprus, since 2016, transactions are now issued electronically by merchants and at the airport, customers can choose between self-service kiosks or the Customs counter equipped with software to validate their claims. This scenario benefits both globe shoppers whose queuing time has been shortened and authorities because the digitally collected data is more accessible.

More recently, the Uruguayan government re-appointed Global Blue as the country’s exclusive Tax Free Shopping provider for another four years. The first chapter of this successful collaboration saw Global Blue implement South America’s first VAT self-validation refund kiosk. The new agreement will focus on digital Tax Free Shopping services and marketing activities.

For more information on our eTFS® solutions, please contact your local Global Blue representative.