Vacations are often marked with the memories of perfume samples from duty-free shops in airports. Once you've checked in and passed through the security check, you'll find yourself walking into a sensory overload provided by Duty-Free shops. From endless supplies of whiskey bottles to giant chocolate packages, you're sure to want to pull out your wallet.
But are the duty-free shops cheaper as they claim to be, or is it just a deceptive marketing myth?
What is Duty-Free shopping?
Products moving between countries require taxes to be paid. Every country is different, but thanks to the duty-free experience, taxation while traveling looks a little different.
Duty-Free shopping began when an Irish entrepreneur, Brendan O'Ryan, was passing through the small Shannon, Ireland airport. At the time, the space was mostly used by celebrities and their entourages on trips between Europe and the United States - virtually the only people who could afford to travel in this manner.
O'Ryan realized that wealthy travelers were an untapped source of wealth for the city of Shannon. He was able to persuade the Irish government to create a tax loophole that allowed him to sell local agricultural produce and Irish whiskey to passengers in transit between flights.
The twist? These items were to be sold without customs duties. O'Ryan argued that since those passengers would not be leaving the airport, there was no reason for them to have to pay local duties on products they don't consume locally.
This idea was a major success and quickly inspired global hub Amsterdam to open its trade-free zone in 1957. The idea eventually made its way to the USA in 1962.
Did you know that Israel helped pioneer duty-free shopping?
Much like Amsterdam, Israel also opened its first duty-free shop in 1957, offering a limited selection of perfumes and alcoholic beverages. However, there was a twist once more - purchases could only be made in dollars, with the hopes of foreign currencies feeding into the local economy of the young new State of Israel.
No matter how you spin it, duty-free shops are a major industry. In 2021, travelers spent a reported $35.87 billion in duty-free shops worldwide, according to Fortune Business Insights. This number is expected to double by 2029.
The products, the airports and the differences
The retail world is constantly evolving, especially in the 2020s. Today, shopping is characterized by online discounts, year-round sales, and increased competition for consumers' attention. With that, new questions arise: does duty-free shopping save you money these days? If so, where are the best deals to be found?
According to research conducted by The Points Guy, a well-known global travel benefits guide, prices were compared across several popular duty-free products at 12 major airports in the world. After this step, a search was conducted for the same products in physical stores and online stores. Prices of products offered for a limited time or seasonal sales were not included.
The tested products:
- Jack Daniel's Tennessee Whiskey (1 liter)
- Talisker Dark Storm single malt whiskey (700 ml)
- Champagne Taittinger Brut Reserve or Moet&Chandon Imperial Brut (750 ml)
- Hendrick's gin (1 liter)
- Dior J'adore Eau de Toilette for women (100 ml)
- Versace Eros Eau de Toilette for men (100 ml)
- YSL Rouge Pur Couture lipstick (3.8 g)
- Ray-Ban Wayfarer Folding 50 sunglasses (or similar Wayfarer glasses).
- Packet of 200 Marlboro Gold cigarettes
The tested airports:
- London Heathrow
- New York JFK
- Rome Fiumicino
- Berlin Brandenburg Airport
- Stockholm Arlanda Airport
- Adolfo Suarez Madrid-Barajas Airport
- Athens Eleftherios Venizelos
- Vaclav Havel Airport Prague
- Warsaw Chopin
- Istanbul International Airport
- Mexico City Airport
- Dubai International Airport
Just don't buy champagne at JFK
In a survey of this kind, there are quite a few challenges, including the fact that customs and VAT taxes differ from country to country.
In addition, duty-free prices also vary between airports depending on local costs such as staff employment, rent and other local taxes. In other words, they can (more or less) set the pricing of these products as they see fit.
Therefore, the duty-free prices at a certain airport may not be similar to those at another airport in the same country.
However, there are nevertheless some insights that emerged from the comprehensive survey. For example:
- Never buy sunglasses at airports located in sunny countries.
- On average, Sweden is one of the cheapest places to buy alcohol products at airports.
- The airports in Dubai are among the cheapest to purchase tobacco products.
- Buy your makeup and perfume at the airport in Poland.
- Don't buy champagne at JFK airport in New York.
It turns out, as it were, that duty-free is not always the best deal. If there is something you really want, you are always advised to check online first.
Which are the cheapest and priciest airports?
Unsurprisingly, Dubai airport is on average the most expensive when it comes to alcohol and beauty products. It is also interesting to note that in New York, champagne is the most expensive by a large margin compared to the other airports (an average difference of $18 per bottle surveyed).
Sunglasses are most expensive in sunny Mexico City and also in Dubai – the two places on this list where you're most likely to need them.
Regarding the cheapest airports, when it comes to alcohol, Stockholm, the capital of Sweden, offered the best value on average of all the airports surveyed. There, a bottle of Brut champagne costs just $34, compared to $39 at London's Heathrow and $50 at a local supermarket. A bottle of Talisker Dark Storm whiskey costs $59 in Stockholm and $74 in Heathrow.
And if you enjoy whiskey, you'll find the cheapest at the Polish airport, where a bottle of Jack Daniels (1 liter) costs only $21, almost $12 cheaper than at Heathrow and half the price offered by British supermarkets.
Warsaw is also the place where you can buy the cheapest beauty products among the other airports reviewed.
As for tobacco products, smokers will be happiest in Dubai, where 200 Marlboro Gold cigarettes cost $27 - a third of the price of the same pack at Heathrow, and much cheaper than at the supermarket.
What are the things you're better off buying online or at the mall?
The truth is that for many products, there is not always a big difference between duty-free prices and the price you can get in a mall or online (note that the survey did not include Israel).
However, when there is a difference, it is found in the tobacco and alcohol categories, since they are heavily taxed. These are indeed recommended to be purchased duty-free.
On the other hand, makeup products will in many cases be more expensive duty-free.
While airport prices for sunglasses and watches may rival what you'll pay in reputable stores in cities, a quick search online will often yield a much better deal.
The bottom line
As long as it's not about tobacco and alcohol, it's always recommended to do a preliminary market survey on the Internet since the duty-free is not as cheap as it is marketed.