Are airport duty-free stores still a bargain?

By Kristin Stoller, USA TODAY
July 5, 2011

Today, folks who enter the shops to buy merchandise that isn't taxed would be wise to be familiar with prices in other retail shops.

"Duty-free is almost never a deal for the casual shopper out to get a bargain," says Jason Clampet, a senior editor for travel guidebook publisher Frommers.com. "You can save significant amounts if you're a smoker who lives in a state with high taxes, but you'll find that electronic goods, beauty products and luxury items such as designer purses usually cost less at home or online."

Despite better prices elsewhere — and the recession's effect on sales — shoppers worldwide spent $39 billion last year on duty-free items, says Michael Payne, executive director of the International Association of Airport Duty Free Stores.

About 60% of the sales are in airports. The rest were on airplanes and boats and at other shops.

Clampet advises duty-free shoppers to research products and prices before they arrive at an airport. Most duty-free operations have online catalogs that allow you to compare prices, he says.

Travelers should be aware of U.S. Customs regulations that exempt them from paying taxes on purchases of up to $800, Clampet says. Customs also allows each traveler to return home with 200 cigarettes and 1 liter of alcohol without paying taxes.

Shops in the USA vs. abroad

Many frequent business travelers say that the best deals are in duty-free shops abroad.

Michael Gregurich of Manitowoc, Wis., says he rarely finds a bargain at duty-free stores in the USA.

"Often, if you hit the mainstream shops during a sale, you can easily beat the duty-free prices at an airport," says Gregurich, a sales director in the travel industry.

Gregurich says duty-free stores in Africa offer bargains. He enjoys shopping at Nairobi-Jomo Kenyatta International Airport in Kenya. His favorite place is O.R. Tambo International Airport in Johannesburg. The duty-free store there has cheap liquor, fragrances, gifts, coffee and cigars, he says.

"It is a huge duty-free store that has international selections as well as African items," Gregurich says. "When you compare the price of international duty-free items, they are almost always less expensive in Johannesburg than anywhere else."

Brian McCarty, a recording engineer from Queensland, Australia, says duty-free shops are a scam, and he shops in them only when he has time to waste at an airport.

"I've routinely checked pricing at duty-free stores with street pricing, and I can't believe there are ever deals," McCarty says. "If you live in a high-tax country, they might be cheaper."

Currency differences can also affect the value of a duty-free transaction.

"If you're from a country where the currency is strong, you may get slightly better deals," Clampet says. "But the U.S. dollar is pretty steady right now."

The recession made duty-free shoppers cautious, and they're spending less per purchase than before the recession, Payne says.

In 2009, duty-free sales totaled $34.5 billion, down from $37 billion in 2008.

Tighter airport security regulations have also hurt sales. The more time it takes for passengers to pass through security, the less time they have to spend in stores, Payne says.

Passengers arriving for connecting flights in some countries may have to be checked again by security screeners who may not allow such duty-free purchases as perfumes, liquor and other liquids in carry-on bags.

"Anyone having to reclear security, particularly in the U.S., is at risk of having (their purchases) seized," Payne says.

Duty-free sales, though, increased at many locations in 2010 and in the first two quarters of 2011, Payne says.

"The future is bright," he says. "More and more airports around the world are investing in infrastructure development that recognizes the importance of duty-free sales as a high-value revenue source and an integral component of airport operations."

Payne predicts bigger and more attractive stores, more varied products and enhanced technology to add efficiency and improve customer service.

Here are some shopping tips from travel guidebook publisher Frommers.com for various types of merchandise available at duty-free shops:

• Designer handbags. Except for fashionistas looking for one-of-a-kind finds, skip buying designer handbags unless the airport price saves at least 20% off the retail rate or a competitive online price.

• Watches. Buy only if the price comparison checks out and you know you're getting the real thing.

• Perfume and cosmetics. Buy only if you spot a multipack that yields big savings.

• Chocolate. Skip the big brands unless you have a sudden craving or can't pass up the souvenir packaging.

• Cigarettes. Buy them, but double-check the price of a carton in your state.

• Liquor and wine. Buy hard-to-find wine and spirits from the countries of their origin.

• Electronics and gadgets. Unless you're a techie who wants to collect gadgets that may not be readily available in the USA, skip them.

You'll likely find better prices and more convenient return policies in the USA.

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