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Duty free shops: What to buy and what to avoid

By MoneyTips

You probably pass by the duty-free shops at the airport all the time and never give them a second thought. Duty-free shops are not just located at the airport; they are in other areas that cater to international travelers, such as border towns and even cruise ships.

What is a duty-free shop, and should you consider buying anything there?

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The "duty" in duty-free refers to taxes. The duty-free shop is allowed to sell their materials exempt from various national and local taxes on the condition that the goods will be taken out of the country by international travelers. In the absence of taxes, duty-free shops are able to offer lower prices on their goods.

This makes items that are typically subject to high taxes great bargains. From the perspective of leaving the U.S., that produces great savings on the classic "sin tax" items (alcohol and tobacco). If you are a smoker, tobacco is rarely a bad deal at the airport.

Items such as cosmetics, clothing, sunglasses, and perfumes are hit and miss. Sometimes brand-name clothing or perfumes can be found at an excellent discount; at other times they are cheaper in nearby stores. Cosmetics bargains may be available on items that do not normally go on sale, and occasionally, unique gift packages can be found that contain combinations that are hard to find elsewhere.

What about those chocolate bars and other confections? Generally, if the item is something you can buy in a supermarket, it is not much of a bargain and may be jacked up to reflect typical airport prices. As with cosmetics, if the item is fairly unique or in a larger quantity that is not found in most stores, you are more likely to receive a better deal.

Cameras, electronics, and other types of tech purchases are not well suited for duty-free shops. Online prices can generally compete with or even beat the duty-free price, and the product versions may be outdated, because there is limited incentive for duty-free shops to keep up with the latest technology.

Items that are specific to the area you are leaving, such as maple products in Canada, are more likely to be cheaper at the duty-free shop -- but beware that a merchant may be taking advantage expecting that you do not know the worth of these items.

Remember, just because a duty-free shop can offer lower prices does not mean that they always do. To maintain their shop space, duty-free shops may have high overheads that absorb the potential savings -- or they may just be taking advantage of a captive shopper stuck at the airport.

Understand the value of anything that you purchase at a duty-free shop, since you do not have the luxury of comparison-shopping at that moment. However, you can plan duty-free shopping through sources such as that allow you to compare prices and rank duty-free bargains in frequent travel destinations.

Make sure that you understand the rules at your destination country regarding duty-free materials, especially for alcohol and tobacco. Many countries, including the U.S., impose limits on the amount you can bring in duty-free.

Finally, do not forget to take into account exchange rates if you are purchasing in a currency other than dollars. The purchase may be more or less expensive than you realize.

The next time you have time to kill at an international airport -- and there will be such a time -- consider taking a stroll through the duty-free shop. However, unless you are a smoker or a drinker, you should put in a little research before you buy.

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