Just to back up David-A's line of reasoning... the Channel Islands are another place that is outside the common customs and VAT area but shares a currency with a place that is inside the area (the UK). I have family in the Channel Islands who regularly come shopping in the UK and claim back the VAT. No one has ever tried to tell them that their refunds should be paid in anything other than British Pounds!

I think those people at VIE were just suffering from a spot of make-it-up-as-you-go-along-itis.