💶 Shopping in Iceland: 12 souvenirs and gifts with prices and tax-free

Souvenirs in Iceland are expensive. You will notice this in the first shop in Reykjavik. But a fridge magnet from a country where people knit sweaters from local sheep wool and boil salt on geothermal springs feels too simple. We have put together 12 gift ideas for loved ones, from inexpensive sweets to a sweater that lasts for decades.

For each souvenir below, we have noted who it suits and where you can save.

What to know about shopping in Iceland

💡 In short:

You can only buy alcohol at state-run Vínbúðin stores and at Keflavik Airport Duty Free.
Wool and Blue Lagoon cosmetics are also sold in Keflavik, but the selection is wider in central Reykjavik.
Tax is refunded on purchases of 6,000 krónur or more in a single receipt.
Tax-free rules (as of 09/2026, Ísland.is).

Iceland is not a country of cheap shopping, but the rules here are clear. Non-residents get VAT refunded if the amount in a single receipt reaches 6,000 krónur (according to Ísland.is, 09/2026). The store will fill out the tax-free form for you, and customs at Keflavik Airport will stamp it. Goods must be taken out of the country within three months of purchase.

Alcohol is trickier. Spirits, wine, and beer are sold only at state-run Vínbúðin stores and Duty Free shops (according to ÁTVR, 09/2026). Opening hours are short, and some locations are closed on Sundays, so it is best not to leave the purchase until the last evening.

Look for wool items in central Reykjavik. The Handknitting Association runs two shops, at Skólavörðustígur 19 and Borgartún 31. You will find Blue Lagoon cosmetics at the official store. Most souvenirs make it home without problems; serious restrictions apply only to weight and fresh products.

1. Icelandic lopapeysa sweater

Gray knitted Icelandic lopapeysa sweater with a pattern

A lopapeysa is a sweater without a zipper or buttons, knitted from Icelandic sheep wool. It is warm, holds its shape, and lasts for decades. The first sweaters were white and black, while modern knitters make models in any colors.

Handmade work is expensive. You will see the exact prices of the Handknitting Association at handknitted.is.

Price: from several hundred euros for hand-knitted work.
Who it's for: if you are looking for a gift that lasts for years and are willing to pay for hand labor.

2. Pieces of lava and basalt

Svartifoss waterfall against basalt columns

Not everything in Iceland costs a lot of money. A simple gift lies right under your feet: solidified pieces of lava and basalt. Iceland sits on the boundary of two tectonic plates, so earthquakes, rifts, and eruptions are common here.

You will find plate fragments in Thingvellir National Park, and there is plenty of solidified lava near the volcanic lake Kerid. If you got carried away by the scenery and forgot to collect stones on your Golden Circle trip, the same things are sold in souvenir shops, only already processed.

Who it's for: if you want a gift with the island's story for minimal money.

3. Bloðberg tea

Bloðberg tea is made from Arctic thyme that grows in the Icelandic tundra. Locals consider the drink medicinal and use it for colds and stomach upsets.

The story is simple. Iceland's alcohol ban was lifted gradually, so people had to find something else to warm up in the harsh climate. Ceylon is far away, and thyme grows underfoot, so a local tea was born. You'll find it in souvenir shops and in Duty Free, and the price is low.

Who it's for: if you're bringing gifts for several people and don't want to spend much.

4. Saltverk sea salt

Saltverk is made from seawater in the west of the country, in the Westfjords, using only geothermal energy. The product range includes birch-smoked salt, lava salt, licorice salt, salt with seaweed, and salt with Arctic thyme.

A gift set of several salts works well for someone who cooks at home. Salt is light, takes up little space in a suitcase, and doesn't spoil in transit, so you'll get it home without any hassle.

Who it's for: if your gift is for someone who cooks a lot.

5. Icelandic sagas and books

Iceland's first settlers more than a thousand years ago were Vikings. That's why the island's culture and language are close to Norwegian, Danish, and Swedish. Hence the love of sagas, where brave travelers meet invincible warriors and wise kings.

Modern literature is just as good. Halldór Laxness, a Nobel Prize laureate in literature, is a highly respected figure here. Books aren't cheap, but English translations are widely available if you don't read Icelandic.

Who it's for: if you're choosing a gift for a reader.

6. Enjoy Our Nature condoms

An unexpected souvenir came from students at an Icelandic art school. They were asked to promote their native nature, and they released a series of condoms with suggestive images of local wonders. On the packaging you'll find a geyser, the Reynisdrangar sea stacks, a volcanic eruption, steam from the Hengill geothermal plant, and the northern lights.

Who it's for: if you're looking for a humorous gift for friends.

7. Brennivín, Icelandic aquavit

Bottle of Brennivín with a black label on a table

Brennivín is a strong drink made from potato spirit flavored with caraway or dill. The bottle looks austere, and the black label wasn't chosen for aesthetics. After Prohibition ended, strong alcohol was labeled in black specifically to deter buyers. The grim design earned the drink the nickname "black death."

Brennivín is drunk very cold, sometimes the bottle is kept in the freezer until it thickens. Locals prefer it straight, but the drink is also mixed with soda or coffee at a ratio of one to two, which makes a cocktail called hreppstjórakaffi.

Brennivín is most often drunk in winter, during the pagan festival of Þorrablót. It's used to wash down the aftertaste of hákarl, cured Greenland shark meat.

The catch: you won't find brennivín outside wine shops and the airport, and Vínbúðin has short opening hours.

8. Licorice sweets

Icelandic licorice candies and bars on a table

Licorice is everywhere in Northern Europe, and Iceland is no exception. Supermarket shelves are packed with candy, chocolate, and ice cream studded with it. Licorice ice cream here can be black as coal.

It's one of the most affordable souvenirs, so pockets and suitcases usually get stuffed to the brim with it. If you're counting every króna on your trip, licorice will be the most budget-friendly gift on this list.

Who it's for: if you need a lot of gifts and your budget is limited.
The catch: the taste is an acquired one, and salted licorice has a sharp flavor.

9. Hákarl, or fermented shark

Pieces of fermented shark hákarl on a white plate

Hákarl is fermented Greenland shark meat, the boldest gift option. It's prepared in an unusual way. The shark is beheaded, the carcass is buried in sand under stones, and left for several weeks. The pressure of the stones squeezes out the toxic substances, then the meat is cut into long strips and dried for several more months.

The smell is very pungent, so hákarl is traditionally chased with brennivín. Some call the shark cured or dried, but that doesn't change the ammonia aroma.

Hákarl is unlikely to become your favorite food. But a jar of this gift will draw guests around it at any party, until it's opened.

The catch: the sharp smell and taste make it a one-time experience for most tourists.

10. Blue Lagoon cosmetics

The cosmetics are based on the Blue Lagoon, a mud spa in a lava field. The signature masks, creams, and balms are sold right at the spa and in airport shops. You can browse the range in advance on the Blue Lagoon website so you don't have to figure it out on the spot.

Who it's for: if you're bringing cosmetic-type gifts.

11. Hides, trolls and small souvenirs

Not everyone buys animal hides, but they look striking. The Vikings covered feast tables with them, and today a hide adds character to a chalet-style room. Reindeer and elk hides are especially prized.

Next come gifts with local character. Icelanders take their folklore figures seriously, and trolls here are not always evil. In fairy tales they are cunning, but charming in their own way. Troll figurines are sold in every shop, and from a shelf they will remind you of the hours spent on the island.

The simplest souvenir has not gone anywhere either. Magnets, postcards, snow globes and Viking ships can be found in every kiosk in Reykjavik. These little things cost little and round out the trip experience. For those who enjoy drinks, the same shops carry whiskey stones and coaster sets, a compact gift that will not break in transit.

Who it's for: if you need inexpensive souvenirs for colleagues and acquaintances.

12. Knitted hats, mittens and scarves

If a lopapeysa is too expensive, go for accessories made from the same wool. Hats, mittens and scarves with Icelandic patterns cost noticeably less than a sweater and last just as long. The Handknitting Association has models in different sizes and colors, and regular shops also offer a good selection.

Who it's for: if you need a warm gift but your budget is limited.

⁉️🤔 Frequently asked questions

What should I bring back from Iceland on a budget?

The most affordable options remain licorice sweets, Saltverk sea salt and Bloðberg tea. These gifts cost little, take up little space and work for several people at once. Magnets and postcards from kiosks also help when you are buying souvenirs for colleagues. You will only spend serious money on wool and hand-knitted items.

Where should I buy souvenirs in Iceland?

Alcohol is only available at state-run Vínbúðin stores and at Keflavik Airport Duty Free. Look for wool at the Handknitting Association shops in central Reykjavik, and Blue Lagoon cosmetics at the spa and at the airport. Everything else is sold in souvenir shops and shopping centers around the city. Check opening hours in advance, many places are closed on Sundays.

How much does an Icelandic sweater cost?

The price depends on the size and the complexity of the pattern. At the Handknitting Association, hand-knitted sweaters start at several hundred euros; you will see exact figures on their website. Mittens, hats and scarves from the same wool are noticeably cheaper.

Can I get a tax refund on purchases in Iceland?

Yes, non-residents can claim a VAT refund. The minimum amount on a single receipt is 6,000 krona (as of Ísland.is, 09/2026). You fill out the form in the store, attach the original receipts, and customs stamps it when you leave the country. Goods must be exported within three months of purchase.

What Icelandic food is worth trying?

Hákarl and licorice divide tourists into two camps. Fermented shark meat smells of ammonia and is chased with brennivín at the Þorrablót festival. Licorice is sweeter and safer; it is added to chocolate and ice cream. Start with licorice, and try hákarl if you are curious about the island's most unusual flavor.

Before your trip, watch a short overview of Icelandic souvenirs; it will help you get oriented in the selection and prices.

In short: what to book

If you need a budget gift, go for licorice, Saltverk salt or Bloðberg tea. For something that lasts for years, a lopapeysa and knitted accessories made from Icelandic wool fit the bill. Blue Lagoon cosmetics suit those who value skincare, and hákarl will surprise friends at a party.

Plan your shopping in advance. Do not leave wool purchases for the airport; central Reykjavik has a better selection.

Souvenirs from Iceland: 12 gifts from licorice to a hand-knitted sweater