How Much Can I Save at Duty Free Stores?

This is it! Your first time out of the country and, while you had a fantastic time on your trip, you’re nearly as excited to be coming home. For years, you’ve been hearing about the great bargains to be found at duty free shops, and you’ve come prepared to load up on cheap brand-name perfume and alcohol.

As you grab a bottle of DKNY Green Apple and head over to look at the prices on Glenfiddich, you’re jostled by the crowds of other shoppers looking to make purchases. However, you should be checking those price labels and wondering: How much can I save at Duty Free Stores? Because these days, sometimes the prices really aren’t any bargain.

What is Duty Free?

To understand Duty Free, you first need to understand Duty, which is a customs fee or sales tax you must pay on items that you buy abroad and bring back into your country. Merchants are allowed to waive the duty on an item when they import the items and then sell them to travelers who are leaving the country. Because they don’t have to pay the duty, they don’t charge the buyer the duty either.

Duty-free shops can be found in places that cater to international travelers. This includes international airports, ports, and even in border towns–towns which border two different countries. This can also include the vehicles used in international travel, such as onboard an international flight and on a cruise.

In these last two cases, you may purchase the duty-free items, but not keep them in your possession. Instead, once you get to your home country, you will be given the purchased duty-free items. This is so you do not use, smoke, or drink the duty-free item before it qualifies as duty-free. If you do, you’ll be subject to taxes in the country where the item was bought.

What is my Duty-Free Allowance?

All U.S. citizens have the same allowance for duty-free items. First, they have to have been out of the country for at least 48 hours, and then they can bring $800 worth of merchandise into the country without paying duty. There is a 3% charge for the next $1,000 bought, and then 25% on anything past that.

If you’ve been out of the country for less than 48 hours, then you’re only entitled to $200 worth of duty-free items. The next $1,000 would be charged at 3% and then everything over that is charged at 25%.

All of these exemptions are monthly, so if you travel frequently, such as twice a month, once a week, or more, you’re only allowed to buy $800 duty-free in a 30-day cycle. If you’re traveling with family members who live in the same house as you, you can combine their allowance with yours, giving you $1,600 for a couple or $3,200 for a family of four. Children, however, cannot get an exemption for alcohol or cigarettes.

What Can I Buy at Duty Free?

While, technically, almost any merchandise can be considered duty free if you purchase it abroad and bring it back within your allowance parameters, most experts recommend that you use your duty-free waiver on items that tend to have high duty surcharges, such as alcohol and cigarettes. Or on luxury items such as handbags, perfume, jewelry, and watches, which you’d pay a high tax on at home.

Can I Really Save Money by Shopping at Duty Free stores?

Opinions vary on this, depending upon what you’re buying and where you’re buying it. Duty free shops are not the same all the world over, and items tend to be less expensive at international airports in developing countries than in places like Heathrow Airport in London or Charles de Gaulle Airport in Paris.

As always, when it comes to snagging a bargain when shopping for anything, you need to do your research first. Before you even leave on your international trip, you should check your local stores and the Internet to get an idea of the best price for whatever it is you’re thinking of buying–cartons of Marlboro Reds, bottles of Johnnie Walker Red, etc.

You also need to have a good idea of the price per ounce or pack, or whatever unit of sale the product uses. That’s because many of the duty-free items are offered in bigger varieties than the standard found in your everyday store. For instance, we saw what were essentially double bottles of Johnnie Walker Red and Black available at a duty free shop on our recent return from the Dominican Republic.

While our local liquor stores and the Internet sell Johnnie Walker bottles in the 750 ml and 1.75 liter sizes, the duty free store had it in a three-liter size. It appeared to be a bargain until we did the math and figured out that it was priced pretty much the same as the 750-ml bottle at home: It was four times the size and four times the price.

So the only thing going for it was the novelty of having a bottle that large. Other than that, the logistics of bringing the bottle home didn’t make it worth our time. Had it been discounted, the savings might have been worth the effort.