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Qatar Airways and utu partner to redefine tax-free shopping

Asad Jumabhoy, co-founder and CEO of utu

Qatar Airways Privilege Club, the loyalty programme of the World’s Best Airline, is the latest airline loyalty programme to join the utu service, which aims to revolutionise tax-free shopping for travellers.

As part of the biggest upheaval in the history of tax-free shopping, this new partnership will reward travellers with a significant value addition to their international tax-free shopping experience. From January 18, 2022 members of Qatar Airways Privilege Club have been able to benefit from a 25 per cent increase in the value of their tax refunds by converting them into Qmiles, making their tax refunds even more rewarding.

utu provides a simple way to boost tax refunds on purchases made abroad and convert them into Qmiles. Travellers can benefit from higher tax refund values simply by entering their utu Tax Free Card number on their tax-free forms, and choosing Qatar Airways Privilege Club from the utu Tax Free app as their preferred refund method.

“My money is on reforming the VAT refund system in the UK one day so that the tourist gets their VAT from the operator who works for them – and not the operator who shares tourists’ VAT with retailers, when indeed the VAT belongs to the tourist”
– Asad Jumabhoy
 

By leveraging the virtual utu Tax Free Card in the utu Tax Free app, Privilege Club members will now be able to boost their VAT refund value by 25 per cent. As a special launch offer until March 31, 2022, Privilege Club members will collect 1,000 bonus Qmiles in addition to 4,167 Qmiles for every tax refund transaction above $100.

Qatar Airways Privilege Club is the latest airline loyalty programme to join utu’s new service, which aims to revolutionise tax-free shopping. Travellers purchasing tax-free with the utu card gain a greater choice of rewards, an easier and more convenient reward claiming process, and significantly greater value in terms of Qmiles collected.

Asad Jumabhoy, co-founder and CEO of utu, comments: “We are thrilled to be partnering with Qatar Airways Privilege Club, the loyalty programme of the World’s Best Airline, to open up a new world of better value, choice and opportunities for Privilege Club members. We believe the partnership is another valuable way Qatar Airways Privilege Club is providing exceptional travel experiences leading up to the FIFA World Cup Qatar 2022 and beyond.”

Jumabhoy has spent 25 years in the VAT refund sector as former director/VP of Global Blue and Vice Chairman of Premier Tax Free (now Planet).

We asked him a few quick questions about the latest trends in shopping tourism.

 

What are some of the key trends in shopping tourism since 2019?

The world moved to mobile over the pandemic, from banking and video conferencing, to ordering food and buying all sorts of tickets, etc. and people now prefer fewer manual processes and transactions.

 

What hasn’t changed?

Consumer aspirations, such as wanting to travel and wanting to shop. We see any lift in lockdowns as being a benefit for shopping, and food and beverage uptake. Countries not under lockdown have seen periodic bursts in air travel.

 

Can you share any statistics on the amount of refunds made in 2019 vs latest statistics?

From what we understand, and it depends on who you talk to. Refunds are running between 20 per cent to 28 per cent of 2019, but this is more a 2020 last quarter phenomenon. Additionally, shopping source countries have changed significantly. The US provides the most refund business, followed by the GCC countries for refunds processed in Europe. In Asia, only Dubai has been open to shop, so in the region it is GCC, UK, Germany and Russia providing that business.

 

UK has stopped tax-free shopping – has there been any impact?

Anecdotally, shoppers have been travelling more to the European Union to shop as they expect to get their VAT Refund. However, even in Europe, people are starting to note that they don’t get the VAT they are owed. UK nationals can shop tax-free in European Union. So, UK stores are affected, tourism is affected. Some of the largest stores and outlet malls in the UK have made representations and brought forward legal action against the UK Treasury. So I would imagine that they are affected by the lucrative foreign shopping and VAT refund kickbacks from traditional operators.

For EU-based retailers, they tend to be global and so they will pick up the tourist volume in Europe – the action was more local retailers, airports (again, VAT fees and commissions taken from tourists), etc.

I would imagine the UK will evaluate, and my money is on reforming the VAT refund system in the UK one day so that the tourist gets their VAT from the operator who works for them – and not the operator who shares tourists’ VAT with retailers, when indeed the VAT belongs to the tourist.

VAT refunding should be about getting the best deal for the tourist so that they shop in the country and partake in the sites, hotels, restaurants, and more. This is the true tourism ecosystem and what drives national income. Refunding more VAT gets more traction – refunding no VAT means no or less traction.

 

Please tell us a bit about partnering with airlines for tax-free shopping – how does it benefit airlines, customers, retail industry etc?

We see the airline partner programme as the first leg in our series of partner programmes. Airlines like their loyal customers to be sticky and select them to fly with. They are therefore generous with what the shopper can benefit from, should they transform their VAT refunds for a cashback bonus to be spent in airlines points.

For retailers, it temporarily masks the commissions they make from traditional VAT refund operators (cashback bonuses) so that it does not seem that the refund is as low as it is. This also helps the other VROs whose interest is to promote utu partner programmes after they have done their refund so that shoppers get more than what they receive today.

 

What other interesting partnerships is utu working on apart from partnering with airlines?

Retail partnerships are a key segment to get the dialogue in motion to reward shoppers more. It also allows us to help tourists make informed choices in their shopping, their refunds, and their rewards for shopping at promoting retail partners; not too dissimilar from airlines, and all via mobile.

Drawing on its deep industry experience, utu believes travellers should be getting more value and a better experience when it comes to tax refunds. Tax-free shopping is available in 50 countries across the globe, including France, Italy, Germany, Singapore, South Korea, and the UAE. utu allows travellers to claim back the Value Added Tax (VAT) or Goods and Services Tax (GST) for purchases in countries they visit. By the time a refund is processed by VAT refund operators, shoppers typically only receive about half of the total value of the VAT refund they are due. utu is transforming tax-free shopping worldwide by empowering travellers with the freedom to obtain a higher VAT refund, something they have been unable to do until now.  

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