Once regarded as the financial oasis of the departure lounge, duty free is shopping is experiencing something of a popularity crisis. Not only are people less likely to shop at duty free stores in airports, the majority also believe that they are worse value for money than high street or online stores.
Does duty free really save you money?
The history of duty free
Duty-free means, quite literally: “without tax”. Almost every country in the world has an import tax that it applies to all goods coming over their borders. Different countries have different levels of tax. The Bahamas, for example, imposes the world’s highest on imported goods with a basic rate of 35%.
In a ‘duty free shop’ however, these taxes are waived. So, if you shop in a duty free store in Rome you will have the opportunity to buy things without the tax that Italy usually applies to their goods.
For a little historical framework: the very first airport duty free store was established in 1947 by Brendan O’Regan in 1947 at Shannon Airport. It was initially designed to cater to the rich and fabulous as they refuelled on their way to mainland Europe. Nowadays though, it is Dubai International Airport that holds the crown for the world’s largest duty free shopping area.
Does it really offer you a bargain?
With the advent of internet shopping and free international delivery, the concept of 'local pricing' has more or less gone out the window. That, coupled with the change in peoples' spending habits, has meant that duty free is no longer synonymous with good deal.
Do your research before you go. The best way to gauge if you’re getting a good deal? Do your research first. Go in with an idea of what the price is on the high street at home, and at your destination, and then do a direct comparison yourself in the duty free stores both on arrival and departure. Always keep in mind your exchange rate too.
Use a comparison website to help you assess how expensive a particular country’s duty free offers are. Duty Free Addict offers a sliding scale for alcohol, electronics, fragrances, cosmetics, and fashion. Alternatively, Duty Free Hunter lets you see exactly what’s on offer at the duty free stores you’ll be visiting on your trip. Just enter your departure and arrival airports and they do the rest.
To buy or not to buy
The general rule of thumb is that Alcohol, perfume, and fashion are generally good deals. This is backed up by statistics that show that in the first half of 2018 over 38% of all products bought in duty free were fragrances and cosmetics. Following in second place were wines and spirits with a share of 15.4%.
In comparison, confectionery is almost always overpriced. Avoid purchasing, as it is not a good deal. The same statistics show that only 7% of all global duty free purchases in between January and June 2018 were spent on confectionery and fine foods.
Duty Free and Brexit
Unsurprisingly, no one knows what will happen with duty free once the UK leaves the EU.
Currently, if you are traveling within the EU you cannot buy goods duty free, as all countries are part of the Single Market. This means that you can practically bring an unlimited amount of any goods from any EU member state to another.
If the UK leaves with a Brexit deal then this may very well not change, nobody yet knows if UK will stay inside the Single Market or not.
If there is a no-deal Brexit however, then all imports from the EU will be treated as goods from any other nation. I.e. duty free rules apply.