If you’ve ever been to an international airport you have most likely seen one of these stores. There you can find many goods for, as they say, lower prices. But what does duty-free mean in reality? And do these shops really offer you better deals than other stores? Let’s find out the secret of duty-free!
The word duty-free refers to the act of buying something without any duties. In this context, duty means every tax you pay for imported goods.
For example, you bought perfume in a duty-free shop at Leonardo da Vinci Airport in Rome. It means that you are not paying taxes on it in Italy. However, if your destination country is the U.S. you might still have to pay some duties there, depending on factors such as an item price and type.
An interesting fact is that in some airports paying tax does not apply to airport employees. Meanwhile, you have to show your passport when buying as proof that you are a traveler.
Duty-free shops are usually found in international airports, sea ports, and train stations. Also, you can sometimes purchase duty-free items on board airplanes and ships.
Duty-free shops sell a range of luxury items including alcohol, cigarettes, food, accessories, and beauty products. Also, a lot of goods, for example, chocolate or candies that you may not find in your country.
Duty-free shopping can save you a vast sum if you know how to do it right. Firstly, you will have to do small research about the products you want to purchase. Prices in duty-free shops depend on various factors such as the type of goods, the country, or local exchange rates. To get a cheaper price, figure out how much the item costs at a regular store in your country.
Additionally, focus on items that have the highest rate of tax outside of the airport. You will find a wide range of cosmetics and beauty products, including designer fragrances, also tobacco, and liquor.
To make your research a little easier, most of the world’s duty-free shops and airlines have their price lists online. So it takes an even less amount of time to compare prices.
Do not hesitate to plan ahead and put some travel money aside for duty-free shopping. Doing so helps to avoid impulse buying, which could be challenging with in-flight duty-free service offers. So, prepare and know what you want to buy in advance.
Liquor and tobacco products are considered the best deals in duty-free shops because they usually have the highest taxes in regular stores. However, many countries, including the U.S. and most countries in the European Union, impose limits on the amount you can bring duty-free. It means there is a certain amount of these products that you can carry onboard. So, make sure that your duty-free items satisfy the requirements.
The first duty-free shop was opened at Shannon Airport in Ireland in 1947. Everyone saw how successful these shops became and decided to add the same concept to airlines. This decision was not only good for the airlines, but also for passengers.
Back then we didn’t have inflight WiFi or any movies and TV shows, passengers wouldn’t have much to do, only to read the airlines magazine or stare out of the window.
In between meals, the cabin crew would announce that they were coming through the cabin with a selection of duty-free items for sale while touting one item or another.
This practice is still alive today with some low-cost airlines like Ryanair. It is so because onboard shopping generates a part of their ancillary revenue, which is an important factor for airlines that sell flight tickets at ultra low prices.
Naturally, Low-cost airlines then offer a selection of cosmetics and perfumes for passengers to choose from. Most of these items are are pre-selected and listed on their in-flight magazines, so you can choose what you want in advance.
Onboard shopping sometimes also includes additional discounts on the prices with some taxation exemptions. However, having a stock of duty-free products for sale to your passengers requires taking up space and adds extra weight to the aircraft. So to reduce weight, some big carriers, for example, SAS and American Airlines are stopping onboard sales.
People often get confused when talking about these terms and often use them together. Duty-free and tax-free are different terms and if someone buys an item at a duty-free shop it doesn’t mean that it’s always completely tax-free.
Broadly speaking, duty is a charge imposed on imported products to a country. It means that products made in a specific country that are sold in duty-free stores and brought abroad don’t have applied duties.
Yet, things purchased in duty-free stores may still have customs duties and other taxes. For example, in the U.S., you are allowed to bring $800 worth of duty-free goods without any customs fees. The prices are lower because it doesn’t include any customs duties payable to the country where the airport is.
On the other hand, shopping tax-free means that you are exempt from the value added tax or VAT for short. Main areas for shopping tax-free are outside of airports and are aimed at foreigners. How much goods you are allowed to take out of the country tax-free and how much you are going to be refunded depends from country to country.
In theory, no. Duty-free shops are restricted to international travelers with valid boarding passes. However, a fun fact is that some people buy a ticket to anywhere and check in without any luggage. Then they shop duty-free and after that, they ask for a ticket refund. Et-voila! Duty-free shopping without flying!
Also, you can pre-order things online. It could be comfortable, but you still have to plan a trip or if you want to be sure you get your desired item.
Duty-free shops are a good thing when one has to spend some time in the airport when going on vacation let’s say, in the Virgin Islands. International travelers might really enjoy browsing through luxury items in those shops. If you are one of such travelers, keep in mind all the tips mentioned above. They are here to help you pay less and save some money.
What do you buy in a duty-free shop? Have you ever found good deals? Let us know in the comments!
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