Is Duty Free a Good Deal for Budget Travel?

Duty-free shopping is a widespread option for travelers around the world.
Courtesy Wikipedia

You'll need to determine whether duty free shopping is worth your time and money. Are these products a good deal? What should I buy?

It won't take long before you'll need to make choices.

You're on a long international flight, and you're hungry. But they won't serve dinner until the flight attendants complete their "duty free" sale.

You're walking through the airport, and there is a duty free store every few hundred yards. A common airport mistake is to assume these stores are stocked with excellent buys.

Should the budget traveler set aside money for these opportunities? Finding an answer to that question can be tricky.

First, understand that duty is a generic term describing a variety of taxes imposed on goods. Once outside a nation's borders, you can buy duty free cigarettes at 33,000 feet or on the high seas. International airports get around the tax bite because they are in designated foreign trade zones.

Subtracting the taxes from a purchase results in nice savings. But is the product a good deal if, after taxes, it is overpriced?

Be sure you know the products you're buying in duty free airport terminals. Some retailers depend upon consumers who think the prices are low simply because they're duty free prices, and then mark up the price on each item.

In Britain, the government stepped in after discovering that many duty free retailers were pocketing Value Added Tax discounts they should have been passing on to customers.

The late Suzy Gershman was a shopping expert who considered duty free shopping "a joke."

The author of Frommer's Born to Shop series said "I have bought fragrances duty-free and found out they were cheaper at Saks (Fifth Avenue). As a rule of thumb, you're not going to save very much."

Shop duty free opportunities very carefully. Click "next" for a look at some duty-free shopping strategies.

Avoid impulse buys.

Look for items that you've priced in other places. Otherwise, you're at the mercy of the merchant.

Buy at the end of the trip.

Bulky purchases can slow you down, and mailing the items home can take a bite out of the tax savings. Another reason for this is comparison shopping. Is the Delft china at Amsterdam's Schiphol Airport really a better buy than what is sold in the city? You won't know until you've been both places.

Know the rules before you go.

The European Union has done away with many of the tax free laws that once existed when the nations of that continent had a more individual approach to commerce.

But there are in-airport bargains there (at least that's how they're advertised) because it's still possible to bypass Value Added Taxes (VAT). This is a sort of local sales tax you pay throughout Europe, but it is completely refundable if you are not an EU citizen.

Many people either don't know VAT is refundable, don't know how to obtain a refund, or just don't want to be bothered with it.

The beauty of these shops is that the tax is not charged. Again, you must be knowledgable enough to know if the VAT-free price is lower than what's available at home.

Be aware that duty-free at point of purchase does not necessarily mean duty-free when you get home! There are limits your home country imposes on citizen purchases abroad. There is a total that is free of duty (for United States citizens, it's usually $400-800), but spending sums beyond that amount could result in a duty charge.

There are also rules specific to individual locales. For example, in the Virgin Islands you may purchase up to five "fifths" of alcoholic beverage and bring it back to the U.S. duty free. Other ports usually only allow one "fifth."

Are you beginning to see why it pays to know the rules?

Visit appropriate Web sites before departure.

A cruise line that lists the Virgin Islands among its ports-of-call will probably have information about the duty-free alcohol on its Web site. The airline that offers specific bargains while in flight is going to list those somewhere, too.

Your destination's tourism bureau is going to tell you what's hot in their shops and bazaars, and the duty-free rules that apply.

Don't let shopping dominate your trip.

This might be the best tip of all. Some travelers become so obsessed with finding the perfect bargain that they miss out on a lot of other enjoyable experiences. When that happens, you waste money--because you waste precious time, too.

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