Is duty free shopping still a good bargain?

Is duty-free shopping still worth it?

Are we simply spending up big at the airport under the wrong assumption it's the cheapest place to buy alcohol, cosmetics and electronics?

The history of duty free shopping

What is considered to be the world's first airport duty-free store opened at Shannon Airport in County Clare, Ireland, in 1947.

The founder, Brendan O'Regan, supposedly petitioned the Irish government to allow goods in the store to be sold without the usual duties to airline passengers - the argument being that there was already a similar arrangement in place for cruise passengers at sea.

The idea caught on, and in the decades since duty free has become big business.

The latest figures from the Duty Free World Council - the industry's representative body - suggest that global sales reached approximately $90 billion in 2017 alone.

As Angus Kidman, travel expert at comparison website Finder explains, the driving principle behind the success of duty free is quite simple.

"Anywhere you go in the world there are different taxes and duties that are paid on goods when you buy them. So, duty free reflects the idea that if you're not a resident of that country, then perhaps you shouldn't have to pay those taxes.

"That's why it became appealing for travellers, because it was a way of buying something for less than you might have got hold of it for otherwise," he says.

How GST changed the duty free experience

As the global spending figures indicate, duty-free shopping is clearly an enticing proposition for many travellers. But there have been changes to the duty-free experience in recent decades.

Kidman believes the potential savings available at duty-free stores - at least, in Australia - is no longer what it used to be since the introduction of the goods and services tax (GST) in 2000.

"There used to be specific duties on alcohol and electronics and all sorts of things in Australia. Once the GST was introduced, it changed what duty free looked like, because the savings were nowhere near as pronounced as they had been in the past.

"In other parts of the world where you might still have very high local duties, duty free can still turn out to be a much better bet. But the GST changes really were one of the things that's driven a longer-term change in how people think about duty free in Australia."

In the years since, Kidman says the focus of duty free seems to be much more about providing a luxury shopping experience rather than less expensive goods.

"Where the whole point used to be that it was cheap, another pattern that you've seen emerge overseas and in Australia is that it's all about exclusivity. Certainly at Sydney Airport, most of the retail upgrades in the past decade have been around that.

"If you looked back at the advertising from the 1980s and 1990s before the GST came in, you'd see stores advertising the discounts.

"That's not to say that there wasn't a luxury edge to duty free back then, but I think it's become more about indulging yourself rather than that savings piece."

Where to find best value in duty free

Aside from country-specific tourist items, duty-free stores across the world tend to stock a relatively uniform range of goods, such as alcohol, fragrances, sunglasses and, of course, Toblerone.

That's not to say that duty-free goods are all priced the same. Because of the various taxes charged on goods in other countries, plus costs such as employee wages 
and rent, there are differences.

For example, a 2019 analysis of 10 common duty-free goods across 12 major airports conducted by the travel website The Points Guy found that the best-value beauty products were in Warsaw and the best-value alcohol was in Stockholm, while the most expensive sunglasses were in Dubai and Mexico City.

Closer to home, a look at some goods on offer at duty-free stores in Melbourne and Sydney airports reveals that while there's certainly value to be found, that's not true across the board.

For example, a bottle of duty-free Bombay Sapphire gin was $20 cheaper than the best price available across a number of major alcohol retailers. On the other hand, a pair of Ray-Ban Wayfarer sunglasses were roughly $40 more expensive from a duty-free store than online at a couple of popular eyewear retailers.

"People may still get an advantage in Australia, but it varies a lot depending on what you are looking at. It's certainly not the case that everything is cheaper," says Kidman.

"The one category that consistently comes up as being a bit cheaper is alcohol. That's no surprise really, because it's one of the dominant parts of duty-free store displays in Australia."

Do your research first

Whether the aim of the game is to get a bargain at the airport or to indulge in a spot of shopping while holidaying abroad, there are a few things travellers can do to ensure they're getting bang 
for their buck.

One of the simpler but more valuable actions that Kidman recommends is to conduct a bit of research.

"People should do this whether they are shopping duty free or otherwise, but if you've got some alcohol or perfume in mind, then get an idea of what it would go for normally outside of duty free.

Of course, you can even do that on your phone at the airport.

"What you'll sometimes find at airport retailers, though, is that the packaging or sizes are different to those that you'd normally get elsewhere, which can make comparing a bit harder," he says.

Travellers don't have to compare their options at the airport. Many duty-free chains have product catalogues and prices for various airport locations listed online, which makes it easy to compare offers side by side with goods from other retailers.

Travellers can even place an order online through many duty-free chains and then click-and-collect when they get to the airport. In Australia, that must be done within 60 days of travelling.

For non-duty-free purchases made overseas, hold onto receipts because you may be able to recoup any tax paid through a tourist refund scheme, such as the Tourist Refund Scheme in Australia. Usually there are designated counters at airports to make a claim.

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