Duty-free shops are an essential part of any traveler’s journey. These shops offer an array of tax-free products, making it a great opportunity to save money and get your hands on some amazing deals. Duty-free sales centers are mostly found in international airports, seaports and stations, and border areas. For many tourists, duty-free discounts (goods such as Swiss chocolates) seem a bit complicated. Because of that in this article from Eligasht, we want to discuss all the things you should know about duty-free shops.
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What is duty-free shopping?
Customs duties are tariffs or taxes imposed on goods imported from other countries. The tariff you are exempted from in airport shops is the import tax that is applied to local shops in the same country where the duty-free shop is located. These duties are usually a combination of value-added tax (VAT) and sales tax.
The term tax-free means that local taxes are not levied on goods that are purchased at retail in special economic zones. Duty-free shops can usually be found in airports, But such stores are also seen at important land borders and on cruise ships that travel in international waters.
When buying from a duty-free store, you should also pay attention to the limit of purchases from such stores in each country.
How to buy from duty-free stores
As the name suggests, by buying from duty-free stores, you do not pay customs fees for buying foreign goods. For example, if you buy from Charles de Gaulle France’s duty-free store, you will not pay part of the product price due to the tariff set by the French government for imported goods. duty-free in duty-free centers of airports and ports in Europe have another special privilege, you are also exempted from paying value-added tax (which you are required to pay throughout the European Union). Something that includes between 5 and 25 percent of the product price, and you don’t need to pay this part of the cost by buying from these centers.
But by buying too many products from these centers, you may be subject to paying customs duties when you return to your country. For example, if the price of the goods you import into the United States is more than 800 US dollars (which is the limit per person), you will be subject to a 3% tax on the first 1,000 dollars, regardless of whether you bought them from duty-free centers or not. Also, to the extent that the value of your imported goods increases, you will be required to pay a higher percentage of tax.
when shopping at duty-free centers, especially in the case of luxury goods such as expensive watches or hand-sewn bags with a reputable brand, you should be careful about the original price of the goods. For example, an Armenian Obo bag costs $450 at Hong Kong International’s DFS Galleria, which is considered a duty-free zone, but the same bag model can be sold directly from the Armenian website for $285.
What products are sold in duty-free shops?
Perfumes and cosmetics, sweets, chocolates, all kinds of drinks, coffee, all kinds of bags, toys, cigarettes, all kinds of edibles such as honey and sea salt, sanitary ware, glasses, watches, and electronic devices are some of the types of these goods; Of course, these products are not found in all airports and stores, and you may even find other products in a certain terminal.
When did duty-free shops start working?
With the opening of the world’s first duty-free store in the transit area of Shannon Airport (SNN) in 1947, Ireland established itself as a pioneer of this business model. The Irish government passed the “Duty-Free Airport” law that same year, exempting aircraft, goods, and passengers in transit from normal customs procedures.
Does duty-free shopping save money?
In general, it is better to know and compare the prices of goods in your own country and the country you have traveled to. calling these purchases “duty-free” doesn’t always mean they’re profitable; Because the owners of duty-free shops are not obliged to share their tax-free savings with customers. they only pay attention to local prices when pricing their products. Pricing methods vary by store and jurisdiction. In any case, buyers should not expect many discounts.
In any case, according to the tax structure of each country, it is possible to gain a lot of profit (up to 20 or even 30%) from buying certain goods in countries with high value-added tax. You must familiarize yourself with the laws regarding duty-free shopping in the country you are traveling to. Some countries have limits on the number of such purchases, and if you exceed them, you will have to pay taxes when you return home. Usually, you can get information about this by referring to the border counters or customs offices of the country you have traveled to. The agency you booked the tour with can also guide you.
Not all duty-free shops have the same conditions. Sometimes, stores operating in the same airport offer the same product at different prices.
What are the best and worst places to shop duty-free?
According to The Points Guy, the cheapest perfumes and cosmetics can be found in European airports. The price of cosmetics in the airports of cities such as London, Dubai, and Vienna is very reasonable. the cheapest tobacco products in Asian countries. Generally, the cheapest airport in terms of duty-free pricing is Kuala Lumpur Airport (KUL) in Malaysia. The duty-free shops at Kuala Lumpur International Airport and Singapore Changi Airport are popular among travelers for offering products at low prices. If you’re looking to buy duty-free perfume at a great price, you can find these products at airports in cities such as Madrid, Porto, and London. The title of the most expensive airport in this regard is also given to Santorini Airport (JTR) in Greece.
If your flight is canceled, what should you do with your purchases?
Most passengers shop at the duty-free store when there is only an hour left until they board the plane. A flight is rarely canceled during this period, and some stores take back the sold items in such cases.
Otherwise, you must declare the purchase of these items to the authorities and pay taxes and other customs duties when leaving the airport. Another way is to deposit it in the warehouse of the store, which will keep it for you for a limited time. All in all, the rules of the airport of the country you are in, as well as the final destination of the trip, will determine your final decision. Either way, keep the receipt handy until you get home.
At the time of purchase, which currency is better to use?
If you want to pay for an item in cash, always choose the local currency when the cashier asks if you want to pay in dollars or the local currency. That way, you can spend any remaining local currency at the airport and not have to convert it to your country’s official currency when you get home. In addition, if the purchase is made in dollars, the sellers will convert the price of the goods from the local currency to dollars. The important thing is that the exchange rate conversion in such cases is very high and this factor can put another heavy cost on your hands.
Important points before buying from Duty-Free stores
One of the main points is that when shopping at airport duty-free shops, you should not get excited at all! It may be better to get an item from these stores where you know the original or global price and you are sure that the discount you are getting is real. For example, the price of chocolate, which is introduced as tax-free and is sold in all supermarkets in the city, is probably not real or at least useful.
In many cases, the price that is deducted from the product and presented to you as a discount is not actually a “discount” and is simply a reduced tax. On the other hand, sometimes you can get the products of some famous global brands at great prices and get real discounts in addition to tax exemption.
Buying electronic devices such as smartphones or cameras can’t be a smart decision because the price of some internet sites is easily equal to that of a duty-free store and may even be better. There is even a possibility that the product you are buying is out of date because in these stores, updating the products is usually not a priority.
Sometimes, the dollar or foreign price of a product can be deceptive; In this case, be sure to compare it with the price in your country to make sure it is cheaper. If possible, always buy products in the local currency because they are usually priced better in the same country’s currency. If you use your credit card, make sure that your bank does not charge any money for the transaction or transfer of money to another country.
final words
Undoubtedly, shopping is an inseparable part of every trip, and the wide variety of products in foreign countries may tempt you to buy at any moment. However, you should not be fooled by all the prices, and in places like the airport where the word duty-free or tax-free attracts everyone’s attention, you should buy with an open eye.