Is Duty-Free Shopping Still a Good Value?

Anybody who’s transited an airport is familiar with the process repeated at airports across the globe each day—travelers clear security, possibly passport control, and then it’s the long and winding road through the duty-free shop. 

Duty-free shopping is big business for airports and retailers, but many travelers might wonder if the gimmick is past its prime in the era of easy-compare internet shopping. Few (if any) goods aren’t available to the U.S. consumer in the modern age, so haven’t duty-free shops outlived their usefulness?

Not quite. 

Because of their position in international airports, duty-free shops can offer travelers significant savings on certain items, and in many cases, offer other items that aren’t available anywhere else. It often takes some research to determine whether you’re getting the best deal, but read on for some tips and pointers on shopping duty-free. 

How Duty-Free Began

Just after World War II, airlines on both sides of the Atlantic took advantage of new longer-range aircraft that had been developed during the war to offer flights between Europe and North America. These early aircraft still required refueling stops, and Shannon Airport, on Ireland’s west coast, became a common refueling point for transatlantic flights. 

Passengers on these flights would step off the aircraft at Shannon, stretch their legs, and the airport’s managers looked for ways to squeeze a few extra shopping dollars out of temporary visitors. They convinced the Irish government to declare the international transit lounge of the airport a tax-free zone. The idea was that passengers departing immediately on an international flight wouldn’t consume their purchases in Ireland and thus shouldn’t pay local taxes. 

The resulting sales boom caught the attention of other airports, which opened duty-free shops of their own. The concept was quickly expanded to provide relief on duties paid on imported goods (since goods purchased immediately before leaving the country aren’t technically imported), which further reduced the sale price of certain items. 

Duty-Free Today

Most duty-free shops at international airports focus their product line on goods typically subject to significant local taxes or import duties. It’s common to find extensive selections of cosmetics, liquor, tobacco, watches, sunglasses, fragrances, and high-end fashion. Many airports will also have entire boutiques from top fashion companies such as Hermès, Louis Vuitton, Tiffany & Co., and Prada in their duty-free areas, often run by the same operator.

Duty-free goods are considered “bonded,” meaning taxes haven’t been paid on them, so the inventory must be strictly controlled to ensure only qualifying buyers have access. This often means showing a passport and boarding card at the point of purchase and waiting to collect purchases from a designated trolley brought directly to the aircraft door during boarding.

What To Buy Duty-Free

As a general rule, the best duty-free deals can be found among products that have significant “sin taxes” in the U.S. (generally alcohol and tobacco) or imported items that have import duties attached (virtually all foreign-made luxury goods ranging from watches to cosmetics).

In most cases, savings will be most substantial on higher-ticket items because the taxes and duties imposed on them will also be higher. The savings on a $40 bottle of skin toner might be little more than the local sales tax, while the savings on a $300 tin of imported face cream can be substantial. 

Alcohol is an item where duty-free savings can vary wildly. While not often less expensive than U.S. retail, there can still be value in duty-free alcohol sales. A practical consideration would be that of travelers bound for destinations where alcohol is significantly more expensive than in the U.S.; travelers can simply pick up their favorite bottle at duty-free to make their own cocktails throughout their journey or as a gift for friends or family. Another consideration is that some manufacturers produce limited editions of their products solely for the duty-free market, so shoppers in the market for rare or limited editions of their favorite brands will find them exclusively while traveling internationally.

Duty-free shops also carry sundry goods like locally made chocolates or other food items, but these aren’t really sold as value buys—they’re just relevant products for travelers.

Arrive Early, or Plan in Advance

The key to effective duty-free shopping is comparison pricing. Travelers who are planning to make duty-free purchases should note the item's price at home so that they can quickly determine their savings amount at the duty-free shop. Impulse buyers should arrive at the airport early so they can look up comparable prices while shopping. 

Travelers based in the U.S. should also be careful to consider local taxes when comparison shopping since taxes aren’t included in displayed prices (unlike in Europe, where displayed prices already include tax). Some items may not appear to offer any savings until the sales tax (which isn’t charged in duty-free shops) is considered. 

Of course, many shoppers will simply purchase items they want without considering any cost savings. Duty-free items are typically priced competitively for the global market, but it’s still possible that some items may, in fact, be priced higher than the tax-inclusive price at home, and it’s still wise to check before purchase. 

Customs Considerations

It’s a common misconception that items purchased in duty-free shops are subsequently exempt from customs declarations, which isn’t true. Most countries don’t distinguish between items bought duty-free and those bought duty-paid, and the combined total of all goods (excluding personal items) still counts toward individual import limits. 

Most countries impose a set value limit on the import of goods, and it’s helpful to keep this in mind when shopping. Goods above the limit must be declared at customs on arrival and may be subject to import duties. 

For U.S. travelers, it’s wise to limit significant duty-free purchases to foreign airports. A big-ticket item bought at a U.S. duty-free shop before departure would likely not only be dutiable at the foreign destination but again upon re-entry to the United States (since it was purchased outside the U.S. customs zone). Duty-free shops in the U.S. can be good places to purchase gifts for friends abroad, but travelers should also be aware of duty-free allowances at their destination. 

Travelers must also declare the value of the goods they’re importing. The easiest way to substantiate value is with a receipt, so duty-free receipts should be kept, at least until travelers have cleared the last customs check of their journey. 

Tips for Buying Duty-Free

• Consider the “schlep factor” when buying duty-free, especially with liquid items. Purchases will add weight and bulk to luggage, so it’s worth ensuring any savings aren’t offset by difficulty in packing and transport. 
• Different countries have different restrictions on liquids in carry-on bags. Some will allow liquids that have been sealed in a bag by a duty-free shop with proof of purchase, while in other countries, it may be necessary to move large liquids into checked luggage after clearing customs but before any connecting flights. 
• Pre-order if possible to avoid items being out of stock. Some items are available only via pre-order, and many airlines and airports have dedicated websites. Most limit payment to the time and place of pickup to account for cancellations or reroutes.
• Pay with a credit card that offers purchase protection—many large retailers accept returns on defective merchandise, but it can be difficult. Purchase protection policies offer a layer of security.