Most people consider duty-free shopping to be associated with international travel, and think of it as an opportunity for them to purchase goods without having to add the expense of local taxes and duties. However, one of the most important questions still remains, and that is does duty-free shopping actually save money? In this article, we will take a look at the potential and the pitfalls of duty-free shopping, while providing tips for shoppers to minimize their savings.
Understand Duty Free Shopping
Duty free shops are retail outlets that do not have to follow certain local or national taxes and duties. They are typically found in international airports, border crossings, and seaports. The main part that attracts most customers is that duty-free shopping provides a potentially huge saving opportunity on luxury goods, cosmetics, alcohol, tobacco, and other items. However, the size of the savings depends upon different factors, like the base price of the item, the local tax rates, and the exchange rate applying on the product.
The Saving In Duty Free Shopping: Fact Or Fiction?
According to a study done by a travel retail analyst firm known as Generation Research, the global duty-free and travel retail market has been valued at approximately $86 billion in 2020 alone. Despite the fact that 2020 was going under the pandemic impact, the market was an is still expected to rebound and grow, which shows that there is a continued interest in duty-free shopping.
Price Comparisons on Duty Free Shopping
One of the biggest attractions of duty-free shopping is that people assume it will have a price advantage. However, research by the consumer group Which? Found that not all duty-free items are cheaper. In some cases, products were actually more expensive than those that were available on the high street or online. For instance, a bottle of whiskey can be a lot cheaper in the local supermarket when discounted as compared to the duty-free price available.
Expert Insight on Duty Free Shopping
Industry experts have suggested that the saving amount that can be made from duty-free shopping is significantly different. Martin Moodie, founder of The Moodie Davitt Report, a travel retail industry publication, said that, “The key to maximizing savings is to know the regular prices of items you wish to purchase. Duty-free isn’t always the cheapest option, but it can offer good deals if you do your homework.”
Tips To Maximize Savings In Duty-Free Shopping
For individuals who wish to get the best deals while duty-free shopping, it is best to consider the following tips:
- Do Your Research
Before going to the airport, make sure you have researched the prices of the items that you wish to buy. There are multiple websites like duty-free addict, and duty-free hunter that can provide clear price comparisons for various airports all around the world. Having a clear understanding of the standard retail price can help you identify genuine bargains within the industry.
- Check Exchange Rates
Currency exchange rates can have a huge impact on the overall cost of the duty-free items. With the help of currency conversion apps website, individual skin, keep an eye out for changes in current rates and make sure that they are getting a favorable day. Sometimes, even though you are paying in the local currency of the duty feast store, you will be saving a lot more money than paying in your home currency.
- Compare Before You Buy
Compare duty-free prices with the prices that are being offered in local stores or online. With the help of apps like PriceSpy or ShopSavvy you can check for better deals. Make sure you keep in mind that some retailers offer competitive prices, free shipping, and discount codes that can outweigh the duty-free savings.
- Look For Special Offers
Duty-free shops often have a lot of special promotions and discounts, especially in the peak seasons of travel. Make sure you are aware of the multi offers, bulk discounts, and seasonal sales, as they can help you increase your savings. Try signing up for newsletters from major duty-free retailers so that you can be informed about upcoming deals.
- Consider Regional Differences
The prices of duty-free items can be different, depending upon the region and between airports in the same country. For example, a survey done by a travel website known as Skyscanner revealed that the duty-free prices of items at some Asian airports were significantly lower than those in Europe. It is best for you to plan your purchases according to your traveler itinerary so that you can get better deals.
Expert Opinions On Duty-Free Shopping
Duty Free and Tax Free?
It is very important for shoppers to have a clear understanding between duty-free and tax-free shopping. Even though duty-free shops do not have to follow certain duties, these may still include some local taxes. As said by David Spillane, an international tax expert, “In some jurisdictions, duty-free items may still be subject to value added tax or VAT or goods and service tax or GST, reducing the overall savings.
The Impact Of Travel Retail Trends
Travel retail trends are also capable of having quite an influence on the pricing of duty-free items. According to the President of The Moodie Davitt Report, Dermot Davitt, “The growth of online pre-order services allows travelers to compare prices and secure deals before arriving at the airport. This trend is reshaping the duty-free shopping experience and helping consumers make more informed choices.”
Final Thoughts
Duty free shopping is indeed a great way for individuals to increase their savings, but it is not a guaranteed way for them to save money on every purchase. The potential for saving depends on multiple factors, including the type of the product that is being bought, regional, priced differences, and the current exchange rates. It is best for individuals to conduct research, compare prices between different, local stores and duty-free stores, and take advantage of promotions, as it can help them, maximize their savings and enjoy the most out of their duty shopping experience.