DUTY FREE: IS IT A GOOD DEAL?

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When you're traveling internationally, duty-free shops may beckon. These brightly lit, beautifully displayed retailers are stocked with all kinds of things you may want to bring home. It’s big business, too.

According to a 2024 Coherent Market Insights report the duty free retailing market is projected to grow from $38.95 billion in 2023 to $75.37 billion by 2031.

Because these stores sell items that are exempt from certain taxes, the prices should be lower than if you were to buy them elsewhere. At least, that’s the idea.

But do the items at duty-free shops really cost less? That depends on where you are and what you buy. Note that prices and exchange rates can fluctuate daily, so listed equivalents may change slightly.

How Duty-Free Shops Work

Import, value-added and sales taxes – aka duty – are imposed on imported and exported products. A duty-free shop, therefore, sells things without adding those taxes to the price. You'll find duty-free shops in international airports, cruise ships and areas where tourists congregate.

As a U.S. citizen, you can purchase from any of them, up to a limit. In general, you can buy up to $800 worth of items at these stores within a 31-day time frame.

Once back in the U.S., you'll need to complete a customs form to declare your purchases. If you exceed the limit, you'll have to pay duties on the excess.

Is Duty Free Cheaper? 

Outside of convenience, you may be compelled to shop at a duty free store for its value. When the taxes aren’t added, the prices are typically lower than places where duty is included.

While duty free can translate into better prices, it doesn't always.

"Some products may be cheaper outside of the duty-free environment, especially if they are subject to heavy import taxes,” says Scott Poniewaz, head of travel and lifestyle benefits company EXEC.

"While this might seem like you’re getting a good deal, it's important to research and compare prices beforehand to ensure that you're actually getting a bargain,” he adds.

Here are the seven most commonly purchased duty-free items and their price differences at the time of publishing:

1. Fragrances 

According to Statista data, perfumes made up the highest share of the spending of duty-free shoppers in the second quarter of 2023, comprising 20% of the total spend.

In some circumstances, the savings can be excellent. For example, at the San Jose Duty Free, the 3.4-ounce Lancome Idôle Now Eau de Parfum is $127.00. The same item is available at Macy’s for $145.00.

Don’t assume you’ll always get a better price at duty-free shops, though. Case in point: Tom Ford Noir Extreme Eau de Parfum Spray. At Sephora it costs $155, but at Sanford Duty Free, the same bottle is $156.

2. Alcohol

The Statista report found the next most popular duty-free spend category was alcohol, which accounted for 14% of the total spend. If your first stop is the booze aisle, you’re not alone because it's often a good deal. To be sure, do the math first.

Consider a liter of Grey Goose vodka. At the Dufry Shop in Milan, it will cost you €47.20 ($50.65 USD), but at BevMo! in the U.S., that same bottle is $61.99.

While you're in the Caribbean, you may want to bring back some rum. At the Piarco International Airport, Trinidad and Tobago duty-free shop a 750-milliliter bottle of Bacardi 8 year rum is $25. At Craft Spirits Exchange, it’s $29.99.

“I’ll get things like whisky in the Caribbean because it can be cheaper,” says Derek Sall, founder and financial expert at LifeAndMyFinances. "But I always look up the prices first to make sure. Hop on your phone and see what it costs at home.”

Just be aware that comparing and contrasting prices isn’t always easy. Sizes can differ. A bottle may be available only in a 1-liter size at the airport, for example, but domestic retailers can carry larger or smaller versions.

3. Jewelry and Watches 

Jewelry and watches are also popular duty-free items, comprising 13% of the total spend. However, you may be surprised to find you can get a better discount outside the airport.

Consider the Michael Kors, Harlowe Woman Steel 38 Q3 200 watch in rose gold. At the Santiago Duty Free shop, it can be yours for $354.00. The same watch is just $174.75 on Amazon.

Deals can be had, though. For example, maybe you’ve had your eye on a pair of Swarovski Swan Iconic Drop earrings, but at the Swarovski store they’re currently priced at $169. At the Dubai Duty Free shop, you can pick them up for 570 AED ($155.18 USD).

4. Electronics

Oh no, you’ve lost your headphones in India. You may be tempted to head to the duty-free shop at the Mumbai International Airport and pick up Apple Airpods Max for ₹49,990 ($598.67 USD). You may want to wait, though, because they’re $549 at the Apple Store or $449 on Amazon.

Gadgets like these accounted for 10% of duty-free spend, and price isn’t always the reason. “When it comes to electronics, you may find that duty-free shops have a great selection available,” Poniewaz says.

“So, while it can be tempting to splurge while there, I advise approaching this with a bit of caution before you make a purchase. Research the specific model and compare prices with other retailers. Sometimes you can find better deals outside of duty-free shops or online," he adds.

Problems can also arise if you want to return or exchange an item. You're often better off buying electronics from a chain store so you can access customer service outside the airport if necessary.

5. Clothing and Accessories 

Coming in at 9% of the duty-free spend are combined clothing and accessories.

Lusting over the Burberry Shield Crossbody Bag? At the Heathrow’s duty-free store you’ll pay £990.00 (around $1,250 USD) but at the designer’s store the same bag is $1,350.

Designer sunglasses can be appealing at the airport, but you may be able to get a better price elsewhere. A glamorous Gucci pair are €315 (about $336.68 USD) at the Madrid Duty Free, but at EyeSpecs.com they are $319.50, so if you can wait, you’ll save a few bucks.

6. Tobacco

Cigarettes and cigars do tend to have the lowest prices at duty-free stores and they comprised 7% of the total spend.

If you’re at the San Juan Airport in Puerto Rico, for example, you may pick up a 20-pack box of Natural American Spirit Yellow Ks for $80.50. The per pack cost is about $4. That same pack is $10.19 at GoPuff, meaning it would be $203.80 for a box of 20.

Seeking celebratory cigars? A 54-count box of Cohiba Behike is $607.99 online at Duty Free Pro (with a two-box minimum), but if you ordered the same box at Cuban Cigar Online, it would cost you $1,078, a massive $470 difference.

7. Sweets and Snacks

You’re usually better off getting chocolates and candies elsewhere.

“Everyday consumer goods may not necessarily provide substantial savings at duty-free shops,” Sall says. "In fact, sometimes they may even be more expensive.”

That doesn’t mean deals don’t exist. The 15-piece Godiva Gold Collection chocolate gift box is $24.60 at the duty free shop at Incheon International Airport in the Republic of Korea, but a comparable box at Godiva is $32. And sometimes travelers can benefit from knabbing discounts. The same Godiva box at Chicago's O'Hare Airport Duty Free was marked down to $27.

How to Buy Duty-Free Items 

If you do want to purchase something from a duty-free store, you can go to the brick-and-mortar location and shop or buy it online from a company like World Duty Free.

If the price is right at the actual store, you can enter your departure location, reserve the item you want (the store will hold it for you for anywhere from 24 hours to 30 days), then pay in the store and collect your purchase. Note that you'll have to show the cashier your travel documents, such as your boarding pass and passport.

Consider Duty-Free Alternatives

Elyse Glickman is a Los Angeles-based freelance travel writer who says she'll buy from a duty-free shop under two circumstances: when she knows the item isn’t available elsewhere and in emergencies.

“The savings aren’t usually that great compared to department stores, but they can be a lifesaver when your purse or bag rips,” she says. “If I don’t have time to shop, I’ll take advantage of them.”

In other circumstances, Glickman suggests supporting local businesses instead.

“You can find something really special to bring home, such as jewelry and clothing that you can’t find anywhere else,” she says.

She also suggests buying standard items at a department store for comparable prices, which can be even lower during sales season.

Poniewaz agrees, encouraging travelers to explore regional markets, boutiques and shopping districts instead.

“They often provide a more diverse and authentic shopping experience," he says. “These places may offer unique products, local craftsmanship and better prices compared with duty-free shops."

Copyright 2024 U.S. News & World Report

2024-06-25T13:59:03Z dg43tfdfdgfd