What Is Duty-Free? Everything You Need to Know

Dec 11, 2023 By Susan Kelly

Duty-free shopping is a big deal because it's basically the same as getting an additional percentage off of your purchase.


That's why we've put together this post all about what duty-free is and how you can take advantage of it.


What Is Duty-Free?


Duty-free shopping is when you buy something and you don't have to pay any duty or tax on it. In other words, the price you see is the price you pay.


Sometimes, this allowance can be limited to a specific amount of money, or it could apply to all purchases. It depends on where you are and what type of store you're shopping in.


To make it even more confusing, there are two types of duty free: international and domestic. International duty-free applies to airports in foreign countries. Domestic duty-free applies to airports inside the country (for example, US domestic duty-free applies only within US borders).



The Duty Free Shop


You'll find a duty-free shop at the airport in the international zone. However, you can also find duty-free shops inside larger airports.


Let's say you are in Spain and you want to buy a watch. You may have to head out to an airport in Spain so that you have access to duty-free shopping, but there will be a big duty-free shop waiting for you once you get there. You just need to bring your passport with you and get your purchases!


Why Should I Use Duty Free?


There are two main reasons why using duty free makes sense: convenience and savings.


Convenience


Duty-free shopping is a great way to get an item you really want at the last minute. If you forgot to put something into your bag while packing, or if you realize it's the only thing missing from your outfit, a duty-free shop can be life-saving!


Savings


Duty-free shopping offers you much more for your money. You can save about 10% on purchases just by making sure that it's duty free. This amount might not seem like much, but it adds up quickly when you're talking about large purchases like jewelry or electronics.


What Are Some Other Benefits of Duty Free?


Duty free isn't something you should avoid. You'll find various benefits to it:


No Sales Tax – Sales tax is included in the price in most states, so if you pay for something without sales tax, then you can be sure that you're saving money. This is one of the main benefits of duty-free shopping!


Tax Free Shopping – Many countries have special laws that let people shop tax free for goods and services. So, you're not paying any sales tax on purchases at the airport, which can really add up.



How is Duty Free Shopping Different from Tax Free Shopping?


Duty-free shopping and tax-free shopping are two different things. They are both internationally based, but they have different restrictions in terms of what items you can purchase.


So, an example would be purchasing alcohol for a flight or bringing your pet into the country. You cannot do this if you are buying on duty-free in a foreign country, but it is OK to do so domestically (in your own country).


International Duty-Free Shopping


While domestic duty-free shopping is relatively new, international duty-free shops have been around for decades. These shops are located in airports that are located in countries that have signed a free trade agreement (FTA).


Some examples of these agreements include the United States, the United Kingdom, and Japan. Very few countries have FTAs with the United States, but seven (plus Puerto Rico) do have one with Japan.


You must be aware of any restrictions before you travel to make sure that you don't accidentally incur extra expenses during your trip! You could be spending far more using duty-free than you would if you were to simply purchase at retail.


Domestic Duty-Free Shopping


You're not going to see a lot of domestic duty-free shops in the United States. You can find them in airports that are located within the US, but there is usually no need to go out of your way for it.


The benefits of domestic duty-free shopping are similar to international duty free shops. However, the price you pay for each item is much smaller than international duty-free shopping. The main perk is convenience because you don't have to leave your home country and travel all the way to an international airport just to buy an item you need quickly.


Is It Worth Going Through U.S. Customs?


If you're from the United States and you travel a lot, then becoming a member of Global Entry is a must. This will allow you to pass through customs very quickly. Even if you're not a customs officer or an immigration specialist or something similar, it will speed things up and get you where you need to go quicker.


If this is the case for you, then it's definitely worth going through US Customs when returning home. Once you're through, you can head back to your home country and enjoy some free time.


Can I Take My Dog or Cat?


If you are bringing your pet into the country, then it's recommended to find out if it's allowed. If you don't know whether or not it's OK with the customs official at the airport, then it would be a good idea to ask them about whether or not it's OK for your pet. They should be able to tell you in a very professional manner without making you feel like an idiot for asking!


Are Duty Free Shops for Everyone?


Duty-free shopping is not something that everyone will find valuable. If you're looking to save money and you're on a budget, then it's not something that is going to be beneficial for you.


If you have a lot of extra cash and want to save a few extra dollars, then it's worth visiting a duty-free shop. However, if the item is tax free (like alcohol), then it might not be worth visiting an airport at all because the tax-free pricing will still be more than any retail store.


Conclusion


Duty-free shopping has been around for decades. It's a great way to make your money go further, so it's definitely something that is worth exploring.

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