Duty-Free Shopping: Is It Worth It?

Whenever you pass through a major airport, you’re likely to see a duty-free shop. But is it a good idea to shop there? How does duty-free airport shopping work, anyway?

Find out what savings can be had by shopping duty-free. Image credit: benimage/iStock
Find out what savings can be had by shopping duty-free. Image credit: benimage/iStock

Duty-free airport shopping can vary depending on where in the world you are and where you’re headed. Making savvy duty-free purchases can save you money if you purchase the right products in the right airports. Learn about what you can buy in duty-free shops and which airports offer the best duty-free shopping.

How does duty-free shopping work in airports?

Governments charge taxes or fees on many products, especially luxury goods. If you’re buying an item in one country and transporting it to your home country, you may also be charged a customs fee, known as “duty”. Because of this, you could easily end up paying taxes (or the equivalent fees to the government) twice: once in the country where you make the purchase, and again in your home country.

Duty-free shops let you avoid some of these fees. At duty-free shops in international airport terminals, the taxes or fees that the country you’re in would normally levy on the items being sold are waived. That can result in some significant savings for you on luxury items.

If you’re about to leave a country that has very high VAT (value-added tax), your savings could be significant. Sweden and Denmark, for example, charge 25 percent VAT on virtually all purchases, so picking up an item in a duty-free shop as you leave the country could result in some real savings.

Here’s an example: Let’s say you’re in Scotland, where you purchase 300 USD worth of fine Scotch in the Edinburgh duty-free shop. Because you bought that Scotch in the duty-free shop, you don’t pay any UK taxes or fees on it.

A heads up, though. Buying at a duty-free shop only waives the taxes and fees imposed by the country you’re flying out of. You might still have to pay some form of customs fees for importing those luxury goods into your home country.

Let’s follow that fine Scotch to its final destination. If you’re flying home to New York City, for instance, you might be charged duty for bringing that Scotch into the country. A U.S. citizen enjoys an exemption of 800 USD on items purchased abroad and brought through customs. But there are specific limitations on certain types of goods. If you’re bringing no more than 1 liter of alcohol into the country, it’s duty-free (up to that cap of 800 USD). But you’ll have to pay duty on any alcohol over 1 liter, even if your total purchases are less than 800 USD. If you’re bringing in more goods and surpass that 800 USD exemption, you can expect to pay duty on the amount exceeding 800 USD.

Know how much you can bring into your destination country. Image credit: Watcharin panyawutso/iStock
Know how much you can bring into your destination country. Image credit: Watcharin panyawutso/iStock

As you plan your duty-free shopping, remember that each person in your party carries an individual exemption. Many countries, including the U.S., allow you to bundle those exemptions together. If you’re an American citizen buying a fine watch worth 1500 USD, you could combine your exemption with that of your spouse to avoid paying customs when you arrive at your home airport. Even infants and children carry that 800 USD exemption (though they’re not allowed to import tobacco and alcohol until they’re of legal age to use them).

Each country sets its own rules regarding customs and duty. The rules can even change depending on what country you’re traveling from. For example, those living in the U.S. can bring in up to 1600 USD worth of goods duty-free from American Samoa, Guam or the U.S. Virgin Islands — and you can bring in up to 5 liters of alcohol duty-free, making your trip a great opportunity to stock up on that Caribbean rum. Make sure you check the rules for your home country before you start spending at duty-free shops.

In addition, some items are always duty-free. In the U.S., for example, these include furniture and fine art. Again, review your home country’s rules before you start shopping — and save all your receipts to present to the customs officials as you arrive at your home airport.

One often-asked question is whether you can buy duty-free on domestic flights? Unfortunately, the answer is no. Duty-free shopping only applies when you’re bringing goods brought overseas into your home country.

What can you buy in duty-free shops?

In general, the best choices for duty-free shopping are those items that are most highly taxed. Liquor and tobacco tend to offer the best deals because they’re usually highly taxed.

Other items you’re likely to find in many duty-free shops include perfumes, gourmet chocolates (especially from Switzerland), electronics, cosmetics, and other beauty items. Many duty-free shops also sell high-end sunglasses and other fashion accessories, and you may also discover some significant luxury watches for sale.

Make sure you shop around for prices before buying duty-free. Image credit: Martinns/iStock
Make sure you shop around for prices before buying duty-free. Image credit: Martinns/iStock

Different duty-free shops carry different items and brands. If you’re looking for a specific type of, say, French wine, you may be more likely to find it in Paris than in Singapore — but it could also be waiting for you unexpectedly in Hong Kong. If you want to make the most of your duty-free shopping opportunity, do a little research to find out which duty-free chains populate the airport you’re flying from and what brands the shops carry, so you can plan ahead.

Is duty-free shopping a good deal?

Are duty-free shops really cheaper? The answer is: sometimes.

The savings you reap from duty-free shopping depend largely on what you’re buying and where you’re buying it. Bear in mind in many cases that you’re not necessarily paying lower prices at the duty-free shop than you would pay for liquor or tobacco at any shop outside the airport. Your savings often come from not having to pay the tax in the country of purchase.

Some items tend to be overpriced in airports, particularly leather goods, sunglasses, and sometimes fine watches. The savings you might garner from saving on taxes might be wiped out by the higher price you pay. Understanding what a good price is for the item you’re considering can help you make wise purchases.

Sometimes, though, you may be able to combine lower prices with duty-free savings to find some real deals. For example, if you know you want to buy a certain laptop and you plan to pass through some international airports, research to see the prices. You’re likely to find some price points that are lower than you’d pay in your home country — and the added tax savings could save you hundreds of dollars.

Prices at duty-free shops can vary on a daily basis depending on the fluctuation of currency exchange rates. This can work in your favor. Your savings can be amplified if you’re making your purchase in a currency that’s weaker than your home currency.

Many people like to browse duty-free shops just to use up the leftover currency they have as they leave a country. If that’s your plan, and you don’t intend to buy much, you can probably make some impulse buys — though keep in mind that souvenirs tend to be overpriced in airports compared to the price you’d pay in the city. If you truly want to save money on your purchases, however, be prepared to research prices in advance.

Airport duty-free shops typically post their prices online. In addition, websites such as Duty Free Addict provide valuable pricing information and let you compare prices across multiple duty-free shops in various cities and countries. If you’re considering a significant duty-free purchase, you can access these websites via your smartphone to reassure yourself that you’re getting a deal (or to warn yourself away).

Best airports for duty-free shopping

Airports in Asia are particularly known for their duty-free shopping opportunities, with Incheon Airport in South Korea racking up the most in duty-free sales. Take a look at what’s available around the world so you can plan your duty-free shopping as you travel.

Duty-free shopping in Asia

Incheon International Airport

More than 90 designer fashion stores abound at this South Korean airport, including Burberry, Chanel, Louis Vuitton, Rolex, and more, with plenty of savings available. Save time by placing your orders in advance and picking them at designated spots throughout the airport — or do your duty-free shopping at in-town retailers that will then ship your purchases to the airport for you to retrieve. A special category in Incheon is beauty products, specifically skin masks from popular brands including Skin Food and Innisfree.

Hong Kong International Airport

If you’re used to seeing only luxury goods in duty-free shops, Hong Kong International Airport‘s shopping opportunities may surprise you. Sure, the high-end items are available in abundance — In fact, many duty-free mavens plan to arrive at the airport long before their flight checks in just to shop. But you’ll also find books, travel accessories, casual clothing, and a wide range of electronics available. Check out the airport’s online pricing guide to make sure you’re getting a fair price compared to what you’d pay in town.

Singapore Changi Airport

You’ll find some serious deals at this airport in Singapore, a city that’s already known for shopping. Look for real discounts on cameras, electronics, alcohol, and especially cosmetics. Using the online pre-order service at iShopChangi lets you save time so you can focus on browsing for unexpected treasures.

Singapore Changi Airport. Image credit: TommL
Singapore Changi Airport. Image credit: TommL

Airport duty free shopping in Europe

Reykjavík–Keflavík Airport

This 24/7 duty-free shop is open to arriving passengers as well as those flying out of Iceland. Check out the wide selection of Icelandic alcohol, candies, and cosmetics, almost all of which are 50 percent cheaper than the prices you’ll find outside the airport. (That combination of features means arriving passengers can buy a bottle of Icelandic schnapps to enjoy in your hotel).

Heathrow International Airport

With more than 500,000 square feet of duty-free shopping, you’re likely to find some good deals here in London’s Heathrow Airport. Look for British designers and stores in Terminal 5 — Cath Kidston, Harrods, Paul Smith, and yes, a Harry Potter shop — and head to Terminal 3 to find 40 high-end international designer brands. More than 17,000 individual duty-free items are for sale at any given time, and you can order your purchases in advance so they’re ready for a quick pick-up if your timing in the airport is tight.

Charles de Gaulle Airport

It’s no surprise this Parisian airport is packed with shops representing the country’s best-known designers, including Chanel, Dior, Hermès, Yves Saint-Laurent, and Louis Vuitton. Look for discounts of about 12 percent, thanks to the duty-free rates. French wine and perfume are also available here at significant savings, and you aren’t limited to the size of perfume bottle you carry on. You can even purchase duty-free cheeses and foie gras packaged for import. (If you’re considering bringing food into your home country, check to see what items are acceptable).

Duty-free shopping in the Middle East

Dubai International Airport

Dubai is one of the largest airport shopping destinations in the world. You’ll find a wide variety of alcohol, cameras, cigars, cosmetics, and watches in the duty-free shop, as well as all the familiar brands of electronics, including laptops and smartphones. Dubai is a great place to buy gold (in the form of chains, jewelry, watches, pens, and more) at very reasonable price points, as well as oil-based fragrances such as the famous Arabian Oud.

If you should pass through the Dubai International Airport on December 20, which is the anniversary of its duty-free shops, expect to reap discounts of up to 25 percent. In addition, the duty-free shops regularly run lotteries with cars and cash as prizes.

As you leave the airport at your final destination with all those duty-free shopping bags in hand, it’s nice to know that the final leg of your journey will be smooth and hassle-free. Book a reliable Blacklane car service to travel to and from the airport in comfort and style.

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