Not my grandfather, but my great-uncle, was in Europe during WWII. He brought back a German Luftwaffe dress sword. He never said how he got it. I always imagined it was something out of Wolfenstein.
My Dad had some great opportunities to bring home nice trophies from WWII, but back luck and bad information spoiled things... He got a really nice pair of binoculars and a camera from a surrendering German officer - either in the Ruhr or in Czechoslovakia. Unfortunately, in the confusion of battle, and then being hastily shipped to the Pacific, he lost track of them. Later, in the fall of '45, his unit was among the first to be on occupation duty in Japan. Many an Imperial officer's sword/katana was ruined due to a rumor that Japanese officers would keep gold and or jewels hidden inside the wrappings of their sword grips.
Can't believe I forgot to say: I still have the sword. Inherited it from my grandfather when he died--it sat in an attic dresser for 60+ years. By the same token, I don't really want to display it---for obvious reasons (see pic I found online below):