"He asked me what my favourite thing to eat here was and I said I don't know, I'm home sick. They offered to help me [with the tree] because I was struggling a bit".
Rather than buying a 12ft tree for £186, the couple plumped for a 6ft non-drop Nordmann Fir, for which he paid £65. Harry also donated £1 to charity.
According to sources, the Prince did not buy a Christmas tree stand, which sells for £20.95, or festive lights for £29.95, or pay a £15 delivery charge to get the tree delivered to his home in Kensington Palace.
Staff said he left holding hands with Markle with the tree under his arm after browsing the trees for around 30 minutes - and is believed to have taken it to his home in Kensington Palace by car, around two miles from Battersea Park.
The Prince now lives in Nottingham Cottage at Kensington Palace, where Prince William and Kate moved into when they were newlyweds in 2011 before they moved into the plush Apartment 1a, Princess Margaret's old home.
Prince Harry is expected to spend Christmas at Sandringham, but Ms Markle is unlikely to be joining him, as royal convention means partners are only invited to join the festivities once they are engaged to a family member.
The purchase of a Christmas tree together has prompted speculation that the couple may enjoy an early Christmas together in London.
Ollie Wilkinson, a 22-year-old staff member who was working when the Prince came to the store, said: "The girl who served him is American so she didn't realise it was him. Me and the other guy were netting a huge tree and eventually looked up and realised it was him. He had a woolly hat on.
"Because his girlfriend is American they were chatting about living in this country and he was asking about how many trees we sold a year and how much we donated to the charity.
"Then I gave him a bunch of mistletoe - he smelled one of the berries and said it 'smelled a bit weird' and [Meghan] said she liked it. Then they got into the car. They walked off holding hands with [Prince Harry] holding the tree in one hand."
Onlooker Gary Spence said: "It was a bit weird seeing Prince Harry browsing the Christmas trees. I thought he'd go for the biggest one around, but he just wanted a little six footer."
Pines and Needles have had a number of celebrity customers, with Madonna, Elton John and Noel Gallagher all snapping up Christmas trees in the past.
Ollie Wilkinson, a 22-year-old staff member who was working when the Prince came to the store, said: "The girl who served him is American so she didn't realise it was him. Me and the other guy were netting a huge tree and eventually looked up and realised it was him. He had a hat on.
"Because his girlfriend is American they were chatting about living in this country and he was asking about how many trees we sold a year and how much we donated to the charity.
"Then I gave him a bunch of mistletoe - he smelled one of the berries and said it 'smelled a bit weird' and [Meghan] said she liked it. Then they got into the car. They walked off holding hands with [Prince Harry] holding the tree in one hand."
The firm was set up by brothers Josh and Sam Lyle in 1996, when they were just teenagers and spotted a gap in the market and transported trees from their home in Scotland to London.
Sam Lyle confirmed that Prince Harry and Markle bought the tree on Monday night.
He said: "We have looked after some of Britain's highest profile names for nearly 20 years but you could have heard a pin drop - or a needle - when Prince Harry and Meghan walked into the store.
"They were completely charming together and blissfully unaware that our jaws had hit the floor. They chose a gorgeous Nordmann Fir and walked away after exchanging Christmas pleasantries.
"We hope we can add them to our list of illustrious names who buy from us each and every year. There would certainly be a rush from our staff should they ask us to decorate it, too!"
