The 5% consumption tax imposed is not refundable for purchases of consumable items such as food and beverages. However, for non-consumable items like clothing and electronics, the tax may be refunded for purchases of ¥10,000 or more in a single receipt if you are not a resident and intend to bring the items out of Japan when you leave.
At many department stores like Isetan, Seibu and Matsuzakaya, you typically pay the full cost at the cashier and go to a tax refund (税金還付 zeikin kanpu or 税金戻し zeikin modoshi) counter, usually located at one of the higher floors, and present your receipt and passport to the counter to get reimbursed. In some other stores advertising "duty free" (免税 menzei), you just present your passport to the cashier when making payment and the tax is deducted on the spot.
When making tax free purchases or tax refund claims, counter staff would staple a piece of paper in your passport which you should keep with you until you leave Japan. This piece of paper is to be surrendered to the customs counter at your point of departure just before you pass through immigration and checks may be done to ensure that you are bringing the items out of Japan.
Despite the saying that Japanese cities never sleep, retail hours are surprisingly limited. Opening hours of most shops are typically 10AM-8PM, though most shops are open on weekends and public holidays except New Year, and close on one day a week. Restaurants typically stay open until late at night, though smoking would usually be allowed after 8PM so those who can't stand cigarette smoke should have your meals before then.
However you will always find something you could need to buy at any time of day. Japan is crawling with 24-hours convenience stores (コンビニ konbini), such as 7-eleven, Family Mart, Lawson's or Circle K/Sunkus. They often offer a much wider range of products than convenience stores in the U.S. or Europe, sometimes have a small ATM and are often open all day all week! Many convenience stores also offer services such as fax, takkyubin luggage delivery, a limited range of postal services, payment services for bills (including topping up international phone cards such as Brastel) and some online retailers (e.g. Amazon.jp), and ticket sales for events, concerts and cinemas.
Of course, establishments related to night life such as karaoke lounges and bars stay open well into the night - even in small towns it is easy to find an izakaya which is open until 5am. Pachinko parlours are obliged to close at 11pm.
Anime and manga
To many Westerners, anime (animation) and manga (comics) are the most popular icons of modern Japan. Many visitors come to Japan in search of merchandise relating to their favorite anime and manga titles, which are often released in different versions in Japan and the West; the Western versions edit out taboo references in the Japanese version. Some even try to find Japanese-language anime DVDs, but there is a catch: not only are there usually no subtitles on domestic releases (with the exception of Studio Ghibli releases, which all offer English subtitles), but Japan is in DVD Region 2 and uses NTSC-J video formatting, so if you live outside of Region 2 and/or use PAL or SECAM, you're out of luck except if you have special, often expensive equipment such as multi-system televisions, VCRs, and all-region DVD players. However, a computer with region-lock bypassing software installed (i.e. VLC Media Player) should allow the more tech-savvy to view such DVDs. You may also be surprised by the prices: new DVD releases regularly cost over ¥3,000 and there are usually only 2 episodes per DVD.
Blu-Ray releases are more expensive than DVDs (starting at ¥4,000). Note however that the Blu-Ray region in Japan is different; Blu-Rays are released in Region A, which differs from regular DVD Region 2. Blu-Ray Region A includes all of North America and almost all of South America, as well as Korea, Hong Kong, Taiwan and Southeast Asia.
Video and PC games
Video games are a huge business in Japan, but Japan's NTSC-J region code is incompatible with consoles in Europe, North America, Australia and mainland China so you will need to buy a Japanese console to play these games. However, if you are from South Korea, Taiwan, Hong Kong, Macau or Southeast Asia, these games should work fine on your console, though the game would just not be in your native language. The possible exception to this is the PlayStation 3, touted as having no regional lockouts; although the disadvantage of the language is still present, many games are now multilingual, choosing the language of your console settings. The PSP and DS are also region-free, while the Xbox 360 is on a case-by-case basis. The Wii is totally isolated by region, as even Korean and Japanese Wii systems fall under different regions and are incompatible.
PC games, on the other hand, will usually work fine, as long as you understand enough Japanese to install and play them. Only-in-Japan genres include the visual novel (ビジュアルノベル), which are interactive games with anime style art, somewhat similar to dating sims, and its subset the erotic game (エロゲー eroge), which is just what the name says.
Electronics and cameras
Battery-powered small electronics and still cameras made for sale in Japan will work anywhere in the world, though you might have to deal with an owner's manual in Japanese. (Some of the larger stores will provide you with an English manual (英語の説明書 eigo no setsumeisho) on request.) There are no great deals to be found pricewise, but the selection is unparalleled. However, if you are buying other electronics to take home, it's best to shop at stores that specialize in "overseas" configurations, many of which can be found in Tokyo's Akihabara. You can get PAL/NTSC region-free DVD players, for example. Also, keep in mind that Japanese AC runs at 100 volts, so using "native" Japanese electronics outside Japan without a step-down transformer can be dangerous. Even the US standard 110V current is too much for some devices.
Prices are lowest and shopping is the easiest at giant discount stores like Bic Camera, Yodobashi Camera, Sofmap and Yamada Denki. They usually have English-speaking staff on duty and accept foreign credit cards. For common products the prices at any are virtually identical, so don't waste time comparison shopping. Bargaining is possible in smaller shops, and even the larger chains will usually match their competitors' prices.
Most of the big chains have a "member's card" that gets you "points" which can be used as a discount on your next purchase, even if it's just a few minutes later. (Some require you to wait overnight.) The cards are handed out on the spot and no local address is needed.
Fashion
While you may be better off heading for France or Italy for high end fashion, when it comes to casual fashion, Japan is hard to beat. Tokyo and Osaka in particular are home to many shopping districts, and there is an abundance of stores selling the latest fashion, particularly those catering to youths. Just to name a few, Shibuya in Tokyo and Shinsaibashi in Osaka are known throughout Japan as centers of youth fashion. The main problem is that Japanese shops cater to Japanese-sized customers, and finding larger or curvier sizes can be real challenge.
Japan is also famous for its beauty products such as facial cream and masks, including many for men. While these are available in almost every supermarket, the Ginza district of Tokyo is where many of the most expensive brands have their own shops.
Japan's main contribution to jewelry is the cultured pearl, invented by Mikimoto Kōkichi in 1893. The main pearl growing operation to this day is in the small town of Toba near Ise, but the pearls themselves are widely available — although there is little if any price difference to buying them outside Japan. For those who insist on getting their hands on the "authentic" stuff, Mikimoto's flagship store is in the Ginza district of Tokyo.
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