The duty-free shopping business is headed for a worldwide sales mark close to $50 billion this year, says a recent report from the Paris-based Tax Free World Association.
Clearly, those deals must appeal to somebody, but my take is that they're limited to a very few cases. Overall, airports account for almost two-thirds of total sales -- no surprise here. Luxury goods, including fashion items and accessories, jewelry and watches, account for about a third of the sales, with fragrances and cosmetics about the same, and wines and spirits a bit less. The Asia-Pacific region rings up the highest sales volume, followed by Europe.
Duty-free is clearly big business. And for the big airports, especially in Asia and Europe, it's a cash cow. As I noted a few years ago, if you were suddenly transported to the international departure area of Heathrow or De Gaulle, you'd think you were in a shopping mall rather than in an airport. In many big overseas airports, you literally can't get to your departure gate without wending your way through an array of shops hawking "tax-free" or "duty-free" purchases.
But does that mean duty-free is a good idea for the typical American traveler? First, let's look at some basic facts:
Do you really get great prices? The most recent worldwide survey I could find dates back to 2010 and is from Kelkoo UK, the British arm of the online international price-comparison service, and it found no consistent pattern. Unfortunately, that study was limited to 10 major European airports and did not include airports such as Dubai or Singapore that, by reputation, provide better deals.
My take is that you're likely to find good prices on tobacco products -- if you still use them. You may also find good prices on liquor. When you buy it post-security, you can carry it in the cabin. But unless your final home destination is your entry gateway airport, you can't carry it on a connecting flight: Instead, you have to pack it in your checked baggage and risk having to claim a liquor-saturated suitcase in case your bag gets dropped a bit too hard.
I find it hard to understand why luxury goods, fragrances and cosmetics get so much play. The United States doesn't tax them heavily, so you can usually get good deals here at home. Certainly, European countries may tax them heavily, but you don't have to pay those prices. And I certainly don't get the popularity of cameras, watches and tech items, which -- in my unofficial observations -- are almost always better buys in the United States, to say nothing about future problems with warranties and service.
Clearly, then, the prime rule of duty free is to know U.S. prices on anything you're likely to buy before you leave home so you can compare what you see overseas with those known benchmarks. Then you can tell right away which tax-free goods are a good deal and which aren't.
Contact Ed Perkins at eperkins@)mind.net.