AARP Hearing Center
Is Duty-Free Shopping a Good Deal?
How international travelers can save money — and avoid getting burned
David Weissberg
Key takeaways
- Duty-free shopping lets travelers avoid local taxes, but you could still face duties when you return to America, depending on where you shopped and how much you spent, due to U.S. import limits.
- Prices and product selection can vary widely among duty-free stores, depending on the country and airport.
- Researching prices in advance and paying in the local currency can help you avoid overpaying.
Duty‑free shops are designed to feel like a bargain hunter’s paradise, with glossy displays, luxury brands and, perhaps most appealing, tax‑free pricing. These stores allow international travelers to buy certain products without paying import, sales or other taxes.
That’s a boon for budget-minded consumers, especially older adults on fixed incomes. And with tariffs in the U.S. pushing up prices on everything from footwear to wine, duty-free stores abroad look particularly attractive, says Bryan Riley, director of the Free Trade Initiative at the National Taxpayers Union.
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However, before you embark on a duty-free shopping spree, recognize that not every purchase will save you money. In fact, consumers can often find the same items sold at lower prices elsewhere, says Becky Blaine, newsletters managing editor at the Points Guy, a travel and rewards website.
Here are the ins and outs of duty-free shopping.
What is duty-free shopping?
When you shop at a duty-free store, you are typically exempt from import duties, sales taxes or other charges levied by the local or national government. In other words, the price on the tag is what you’ll pay at the register.
That said, duty-free doesn’t always mean you’ll avoid taxes entirely. U.S. customs allows a limited personal exemption — typically $200, $800 or $1,600, depending on the countries you visited — and anything above that amount may be subject to duties when you return home.
Duty-free stores are typically found in international airport terminals, on cruise ships and along international borders. Their brightly lit aisles peddle everything from premium perfume and makeup to giant chocolate bars, alcohol and tobacco.
Depending on what you buy, duty-free shopping deals may be particularly enticing right now, Riley says, as the average tariff on an imported item to the U.S. recently reached 11.8 percent, the highest rate since the early 1940s, according to a report from the Budget Lab at Yale University. (Exact tariff rates vary by country and product.)
To make a purchase at a duty-free store in an airport, you typically have to show your boarding pass and passport. Depending on the location, you may leave the store with the item or pick it up at the gate before boarding your flight.
Will I always save money?
Avoiding local taxes is tempting, especially when you’re shopping for higher-end items like designer bags. But you don’t always save money by shopping duty-free — you may find a better deal elsewhere, especially if a particular brand is running a big sale or promotion online or in stores.
Moreover, prices can vary widely between duty-free stores, depending on the country and airport, a study by the Points Guy found. Deals can also vary depending on what you’re purchasing. For example, the study found that duty-free stores in Europe typically offer the lowest prices on cosmetics and fragrances. As of early July, a 100-milliliter bottle of Jo Malone cologne, which costs $170 online at makeup retailer Sephora, can be ordered in advance on World Duty Free’s website and picked up from a duty-free store at London’s Heathrow Airport for about $111.
Often, tobacco and alcohol products at duty-free shops offer some of the biggest savings since many countries tax these items heavily, says Kristin Addis, founder of the travel blogs Be My Travel Muse and Parenthood Adventures.
How do I find a deal?
A little research before you travel can pay off, says Blaine. “I literally go with specific items in mind, such as a gift or my perfume, and know in my head the price I pay at home,” she says.
Many duty-free stores list their products and prices online. Before you head to the airport, compare the duty-free prices with what you’d pay locally or from an online retailer, to ensure you’re truly getting a deal.
Some airport duty-free stores let you place orders in advance online and claim extra savings. Many also offer special deals and reward points to customers through loyalty programs.
Pro tip: Be sure to pay in the local currency, Addis advises — that usually gets you the best exchange rate. (You may have to ask the cashier to select this option.) Also, consider using a credit card with no foreign transaction fees.
What should I avoid buying at duty-free stores?
Duty‑free shops don’t always offer the best deals. Ultimately, they’re designed for convenience, not comparison shopping, so it’s easy to overpay if you’re buying on impulse. For example:
- Alcohol and tobacco are often marketed as bargains at duty-free shops, but prices may be similar — or even higher — to those at warehouse clubs.
- For unique mementos to mark a trip or inexpensive souvenirs for family and friends, Addis recommends shopping at a local market or artisan shop. “Duty-free is rarely an authentic local good,” she says.
- Those giant Toblerone bars? Check the unit price for large chocolates, candy and other mouth-watering items before you assume they’re a bargain.
- When shopping for headphones, tablets and other tech gadgets, keep in mind that the selection at duty-free stores is limited.
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