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Is Duty Free Shopping A Good Deal?

As a very frequent flyer I found the following report from CNN quite interesting:

Shopping at a mall that’s hidden behind metal detectors and surrounded by airplanes is already exciting. Add the possibility of saving money and fliers know: It’s hard to resist the lure of duty free at the airport. But experts say if you’re looking for a deal, proceed with caution.

For the most part, there aren’t many savings, agreed Stephanie Abrams, host of the nationally syndicated radio show “Travel With Stephanie Abrams.” She only shops duty free if she needs something, like a last-minute gift.

The term “duty free” is alluring because it makes it sound like you’re getting something for nothing, Abrams said.

“But you’re simply avoiding the taxes charged by the country in which you’re buying the item”, explained HLN money expert Clark Howard.  Abrams recalled buying several Toblerone chocolate bars for about $7 each at a duty free shop at London’s Heathrow Airport. But when she returned home, she found the same bars for $5 apiece at a Target store, she said.

Global sales from the duty free and travel retail market reached $39 billion in 2010, according to Generation Research, a Swedish company that tracks the industry. Most of the revenue — $23 billion — came from airport shops, while airline sales accounted for $2.6 billion, according to the report. (Other duty-free revenue comes from off-airport stores, border stores, port shops, cruise malls and military and diplomatic sales.)

But there’s more to consider than just the price when it comes to figuring out whether duty free shopping makes sense. A liquor purchase, for example, may offer some savings but could also cause you a huge hassle.  If you buy the bottles at an international airport terminal before your flight, you can take them on board as carry-on items. But that perk ends if you have a connecting flight in the United States.  Here, the TSA liquid rules kick in and you’ll have to put the bottles in your checked luggage — potentially exposing them to breakage or requiring you to pay a fee for a checked bag.

In most cases, you can bring back $800 worth of merchandise to the United States without having to pay any duty, including up to 1 liter of alcohol and up to 200 cigarettes.  Those limits jump if you are coming back from the U.S. Virgin Islands, American Samoa or Guam.

But there are also lots of other rules and exceptions.  For full details, visit the U.S. Customs and Border Protection website: http://www.cbp.gov

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