From alcohol to fashion goods, duty-free shopping gives travelers the chance to purchase luxury items at a discount.
Duty-free shopping is one of the best parts of international travel. Not only are there some good deals to be found, it’s that extra treat–that cachet that comes with flying to another country. While many travelers love duty-free shopping, others may not see the value, or they may cynically grumble about being forced to wind through the duty-free shops to reach their departure gate.
The concept behind duty-free shopping is simple: travelers just about to depart from a country can buy goods to take with them—goods that aren’t subject to the customary taxes and import duties collected on other goods sold in that country, because they aren’t being used before the traveler leaves. Airlines also once routinely offered duty-free sales onboard, but many U.S. and European carriers have discontinued the practice.
Import duties and taxes are already included in the price of retail goods sold in city centers, so many items that have significant taxes and duties can be a steal at duty-free stores, while other items may be priced the same. So how does one tell the difference?
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What You’ll Find in Duty-Free
Duty-free stores generally specialize in items that have high import duties and taxes. Alcohol, tobacco, leather goods (shoes, belts, bags), high fashion, watches, jewelry, and cosmetics are duty-free standbys. Some duty-free stores also double as sundry stores, selling smaller goods for consumption during travel, but the duty-free savings will be nonexistent or minimal.
Shoppers in the United States won’t find much value in purchasing U.S.-made items in duty-free shops on departure unless they’re planning on leaving their purchases at their destination as gifts. These goods are on offer for foreign travelers visiting the U.S. for their journeys home—where U.S. imported goods are subject to duties.
Pro Tip: Shop Ahead of Time
Some airports, particularly in the European Union, have duty-free shopping available online. Travelers can browse for selections, pre-order them, and pay for their purchases when they arrive at the airport duty-free shop. Even if travelers don’t plan to order ahead, they can still use the tool to price compare or check product availability (although keep a lookout for items marked only available for pre-order—you won’t find them in the shops).
At the very least, websites will list the brands available at their duty-free shops (this is common for many U.S. airports), so travelers can catalog pricing on their desired items before heading to the airport.
Remember to factor in your local sales tax when calculating the price and savings. For example, the Skin Caviar sleep mask from the Swiss luxury brand La Prairie is $425 at my local department store or $460.06 with sales tax. At Frankfurt Airport, which is one of the airports that show duty-free pricing and availability online (and allows travelers to reserve items for pickup) the same product is €349.90, a savings of $110.70 at press time. Most of that difference is the import duty.
Cosmetics are particularly easy items to impulse buy at duty-free, particularly if they’re frequently purchased items that the buyer is familiar with the cost of—many frequent cosmetics buyers will be able to calculate savings immediately when shopping price labels.
Alcohol is another popular duty-free item, and there are three things to watch out for here. The first is the same price comparison for home consumption. At Frankfurt Airport, a bottle of Tanqueray Gin is €16.90, compared to $25 at my neighborhood liquor store. While import duties on alcohol and tobacco may not be astronomical, many U.S. states impose significant “sin taxes” on these items, making them better duty-free values.
The second is limited edition items. Many manufacturers produce special editions solely for the international duty-free market (“Global Travel Retail” in industry parlance). Sometimes that’s a special bottling or batch of the brand’s product, sometimes it’s a limited-edition bottle or packaging specifically for gifting.
The third is purchasing alcohol for consumption abroad when it makes sense. That same bottle of Tanqueray that’s $25 at my neighborhood liquor store is $70 in Tahiti, so gin fans can pick up a bottle at duty-free prior to departing the country.
Savings mileage tends to vary the most here. Many high-end fashion retailers (think Hermès, Tiffany & Co, Gucci, Burberry, Louis Vuitton, and Rolex) have shops in duty-free areas, and tax savings on big-ticket items alone can be substantial. However, selections are often extremely limited. Duty-free shops are for last-chance shopping, for that item that couldn’t be found in the city center (where many shops also arrange partial tax refunds in many countries), or for frivolous impulse buys. For items that might require shopping around for limited availability of a preferred color or size (particularly for rare colors or sizes outside a narrow range), it’s best to make those purchases before arriving at the airport.
Also, for some reason, designer sunglasses are rarely a good value at duty-free, likely because their import duties are typically lower.
A Word About Customs
The most important thing to remember about duty-free shopping is that it is exempt from local import duties and taxes, but items purchased in duty-free shops still count toward customs import allowances in your destination country. The good news is that allowances aren’t an all-or-nothing calculation—you only pay duty on the amount in excess of the allowance (if the duty-free allowance is $800 and you import goods worth $1000, you only pay duty on the extra $200).
Check with U.S. Customs for current duty-free import limits, and keep in mind that even with the payment of duties at Customs, the savings are still likely to work out better than purchasing the same items at home.