Why do duty free shops exist




















Some foods and seeds are not allowed to pass through U. However, items sold in airport duty-free shops are usually safe to bring back from your trip abroad. In the U. Customs Form to declare any purchases made abroad.

Receipts are crucial, as they prove how much was paid for the product. You will owe duties, or tax, on them if their value exceeds the duty-free exemption for the country from which you are returning. Some items, like alcohol and cigarettes, are limited by the quantity, depending on the country where it was bought. Your allowance for duty-free alcohol, like Scotch whiskey, from the EU, for example, is one liter.

Also, travelers should understand that some products, mainly food, like Serrano ham from Spain or soft cheese from France, sold in other nations are illegal to bring into the United States. For more, specific information regarding U.

S Customs and Border Protection website. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.

These choices will be signaled globally to our partners and will not affect browsing data. Yngve Bia, president of the duty-free research company Generation Research, says price differences depend on two things: geography and currency exchange rates. That's a significant savings.

We found impressive discounts on booze elsewhere, too. But be aware that American states may restrict how much alcohol you may import duty-free. There's a typical one-liter limit for all types of alcohol per person, though the rule depends on your state of residence and the country you've visited. One exception: You can return from a visit to a Caribbean country with up to two liters of alcohol duty-free.

Cigarettes offer similar savings. Note: U. But not everything in the duty-free shop is a steal. Duty-free stories once specialized in heavily taxed items, such as alcohol and tobacco products, but now they hawk other products that aren't as deeply discounted. When shopping for cosmetics and fragrances—which account for almost one third of all duty-free sales—you need to shop with savvy and persistence. Cameras, electronics, and other types of tech purchases are not well suited for duty-free shops.

Online prices can generally compete with or even beat the duty-free price, and the product versions may be outdated, because there is limited incentive for duty-free shops to keep up with the latest technology.

Items that are specific to the area you are leaving, such as maple products in Canada, are more likely to be cheaper at the duty-free shop -- but beware that a merchant may be taking advantage expecting that you do not know the worth of these items.

Remember, just because a duty-free shop can offer lower prices does not mean that they always do. To maintain their shop space, duty-free shops may have high overheads that absorb the potential savings -- or they may just be taking advantage of a captive shopper stuck at the airport. Understand the value of anything that you purchase at a duty-free shop, since you do not have the luxury of comparison-shopping at that moment.

However, you can plan duty-free shopping through sources such as dutyfreeaddict. Make sure that you understand the rules at your destination country regarding duty-free materials, especially for alcohol and tobacco. The beginnings of "duty free" go back to s and Shannon airport in Ireland, the whole idea is based on the fact that airport terminals represent territories not belonging to any specific country, therefore taxations laws may not be applicable.

Duty is a tax fee placed by governments, applicable to various types of imported goods. Not only you save money on duty, but in case of Europe, on the VAT — this can potentially mean even more savings compared to downtown markets.

There are certain limitations on duty free shopping however, they are set individually by governments of each country or economical region. Note, that in case of exceeding these limits you may be asked to pay duty and tax difference on them.

Find out what are the allowances on this page.



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