Here’s What’s Worth Buying — and What to Skip — at Duty-Free Shops

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Being a Penny Hoarder has its advantages.

Since I’m always trying to stay within my budget, I rarely shop just for the sake of shopping, and I’m always on the lookout for great deals when I do.

I don’t even shop when I travel, something I know lots of people enjoy.

Just about the only time I’m really tempted is when I pass a duty-free store.

Everything about them makes me want to rush in, throw my wallet at the clerk and grab as much as I can carry because duty-free shops always have the best deals.

Or do they?

What are Duty Free Shops?

You’ll find duty-free shops in all sorts of places: they’re in airports, they’re on cruise ships and they’re nestled in the shopping districts of popular tourist destinations.

Duty-free stores sell products that you can buy without paying an additional tax — the catch is that those products must be taken outside the country.

For instance, if I’m shopping at a duty-free store in Paris (someday!), that store won’t charge me tax on the purchases I make because I’ll be taking what I buy back to the U.S.

Tax-free goods! That sounds amazing, right?

Not so fast.

When you get back to your home country, the nice people at the customs desk will ask you to declare what you bought on your travels.

Depending on what country you live in and where you are returning from, you’ll be on the hook to pay taxes if your purchases exceed a certain dollar amount.

The exact amount of taxes you’ll pay (if any) depends on a lot of variables. Suffice it to say, a handbag that seems like a great value at the duty-free shop in Helsinki might end up costing you more in customs duty than if you’d just bought the darn thing at Macy’s.

Then Why Should I Bother With Duty-Free Shops?

I’m going to get all sentimental on you for a hot minute.

A few years ago, I was traveling overseas with my husband and we stopped in a duty-free jewelry shop to look around. It turns out he steered me in there to buy something to commemorate our trip.

Could he have bought me a similar ring when we got back to the U.S? Sure.

Would it have cost less than what he paid once he factored in customs duty? Probably.

Are we (okay, is he) sappy enough to pay a little extra for something that will always remind us of that trip? Clearly.

Sometimes the possibility that you overpaid for something and the hassle of declaring purchases at customs is worth it if the trade-off is coming home with something you’ll treasure forever.

Of course, bargains are the best reason for shopping in duty free stores — if they really save you money.

Most duty-free shops are packed with makeup, fragrances, fashion accessories, jewelry and watches.   

But more likely than not, these purchases aren’t worth it.

“I find it hard to understand why luxury goods, fragrances, and cosmetics get so much play,” said Smarter Travel’s Ed Perkins. “The United States doesn’t tax them heavily, so you can usually get good deals here at home.”

Booze and smokes, on the other hand, may be a great value.

Smokers and drinkers can do well at duty-free shops, especially if you live in a state with high taxes on these items,” said Trae Bodge, a senior editor at RetailMeNot.com.

How About Some Tips on Duty-Free Shopping?

I’m glad you asked.

Whether you’re shopping duty-free for the value or just because you want to say you did, keep these tips in mind.

  • Decide on a shopping budget and stick to it. You’ll (hopefully) avoid impulse purchases that you (and your wallet) will regret later.
  • Think about what you may want to buy and make a list of what those items would cost if you bought them in your hometown. Consult the list while you’re shopping to make sure you’re getting the best value.
  • If you plan to use a credit card to pay for your purchases, make sure you won’t get charged a foreign transaction fee. That can easily cancel out the money you saved by buying duty-free.

Duty-free shops can be one of the best things about traveling. Or the worst, if you don’t go in prepared.

Lisa McGreevy is a staff writer at The Penny Hoarder. She mostly ignores duty-free shops when traveling… but not easily.

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