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There will be a small office in the terminal where you go to apply for your VAT refund. Note, generally you MUST have the items in your possession, not just the receipts. They can and will refuse you if you've packed the items and just show up with receipts.
I think you guys missed a step
I don't think that's necessary. Some stores just give out regular receipts. As long as you have
Good lord this sounds like a pain **********.
Also some places don't need to see the items. When I left Singapore and Denmark they didnt ask to see anything. In fact, I've never been asked to show anything leaving the EU.
My understanding is that the guy at the counter has the right to see the item if he asks, but usually they don't bother because they know it's a huge hassle to open your suitcase pull it out, and put it all back when there's a long lineup. I've went through the UK several times and on 2 or 3 occassions they asked to see it, the rest of the time they just said "you have it with you, right?" and moved along to the next person.