Large numbers of international travellers consider airport duty-free shopping as being an important aspect of traveling. Successfully reaching an airport terminal means getting lost in the lighted shops that are eager to sell you high quality items at amazingly low prices. However, what does this really mean to say ‘duty-free’ and How Does Airport Duty-Free Work? Below is a step-by-step explanation of what actually happens or occurs in duty free shopping and few points you should always remember.
⇒ How Does Airport Duty-Free Work?
♦ Duty-free shopping is a concept where the customers can purchase many of the products, they need without being charged some of the local or national taxes including the Value Added Tax (VAT) or import duties. These taxes are normally paid at the time when goods are imported into a country but in duty-free shops they are not paid because the goods are sold as if they are in transit. This tax exemption purposefully allows travellers to shop at airport locations, and it is often regarded as a chance to purchase luxury items for cheap.
♦ However, it should be noted that as you are free from the tax’s duties do not always mean that you are getting a cheaper price. Duty-free shops may be cheaper or expensive or may just be cheaper for certain products and in certain countries based on the exchange rate when purchasing the product. At times it may also lead to the basic price of the item being more expensive compared to other traditional shops despite the tax cut. So, it is always advisable to compare the prices in order to make sure one did not overpay for something.
♦ Duty-free shops offer a broad range of goods, with the most significant range consisting of luxury products, including fragrances, cosmetics, tobacco products, and luxury accessories. These are usually considered as some of the most valuable or worthwhile to buy in a duty-free environment due to the taxes often levied on them in normal shops. But not all the products on sale in duty-free shops guarantee consumers with considerable savings. For instance, electronics or regular items could possibly cost the same or even more than they’d cost if purchased outside the airport.
♦ It is also important to familiarize yourself with customs restrictions when shopping duty-free. Most countries have set standards and limits on the value or quantity of commodities that can be imported without paying duty. Exceeding these limits can sometimes result in charges for taxes or duties upon arrival, which can offset any savings made. It is recommended to know the customs allowance for the country you are traveling to in order to avoid extra fees.
♦ Surprisingly, the concept of duty-free shopping is not restricted to airports alone. You can also locate the duty-free stores available in certain seaports, in transit on cruises, and even in some regions of the downtown that sell exclusively to the touring foreigners. However, the savings and selection depend on the location, so it is advised to check if you want to make a big purchase.
⇒ What is Duty-Free Shopping?
Duty-free shopping means shopping in special shops where customers can buy products that are free from some of the local or national taxes and duties. These stores are located primarily in international areas such as in airports or borders. This concept holds that since you are exiting the country, you should not be charged on products that you are taking along with you out of the country.
⇒ What is VAT?
VAT also referred to as the Value-Added Tax is a form of consumption tax levied on products at various stages of production and distribution channels. This is one of the most frequently used methods of taxation in many countries especially in European nations. This tax does not apply when shopping duty-free and depending on the VAT rates of the country of origin; there are huge savings to be made.
⇒ Does Duty-Free Actually Save You Money?
‘Duty free’ means that you will have to pay less money because taxes are left out of the equation. But the reality may sometimes be different. At times, you may get duty-free products cheaper than VAT or other local taxes but it is important to let you know that prices of some duty-free products are higher than that of local shops around. As an example, perfumes, alcohol, and Tobaccos are usually expensive and are overpriced which means that what looks like a good offer is actually not. It is always advisable to first carry out a little research or price comparison before making the purchase.
⇒ Types of Duty-Free Shops
There are a few types of duty-free shops you might encounter:
♦ Airport Duty-Free Shops: The most common, found in the international departure area of airports.
♦ Onboard Duty-Free Shops: Many international flights offer duty-free shopping while you’re in the air.
♦ Border Duty-Free Shops: Located at land borders between countries, offering duty-free goods as you cross from one country to another.
⇒ What to Buy and What to Avoid in Duty-Free Shops
♦ Best Buys:
- Fragrances
- Skincare Products
- Cosmetics
- Luxury Watches
- Electronics
- Chocolates and Confectionery
- Designer Handbags and Accessories
- Travel-Exclusive Items
- Cigarettes and Tobacco
*Warning*: Tobacco use causes serious health problems and is highly addictive.
♦ What to Avoid:
- Fashion Apparel
- Jewelry
- Snacks and Basic Food Items
- Over-the-Counter Medications
- Sunglasses
- Toys and Games
- Books and Magazines
- Basic Travel Essentials (e.g., neck pillows, chargers)
Final Thoughts
However, this type of shopping doesn’t necessarily mean that one is buying at a low price as everyone thinks it is so. It is also important to understand what exactly should be purchased and where it is better to do it in order not to overpay and do not fail. Therefore, when you are next booking a flight, you will have an understanding of how duty-free works, who it benefits and whether it is worth the time and money.
For solo travelers looking for great destinations, explore our guide on the best countries in Europe for solo travel.
Frequently Asked Questions:
Duty-free shop is a shop in the airport, where you can purchase goods that do not have to be paid with local taxes and duties, and such shops are provided for air travellers, usually the ones who travel internationally.
Absolutely, duty-free items are allowed through airport security so long as they are in a sealed bag with the receipt and sometimes there are special rules that apply depending on the area you are heading to.
Yes, everything purchased on duty-free has to be in the form of baggage and has to fit in the allowed checked-in baggage weight.
To claim ‘duty free’ shop at a duty frees store – retain your receipt and show the receipt along with your purchases when entering the customs of the destination country if necessary.
Yes, that means you can purchase duty-free goods at some international borders and seaports in addition to airports. What is a duty-free zone in an airport?
Can I take duty-free through airport security?
Is duty-free counted as luggage?
How to claim duty-free?
Can You Buy Duty-Free Items Outside of Airports?