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Is Duty-Free Really A Money-Saver?

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Is Duty-Free Really A Money-Saver?

Consumers are welcoming a move by the UK government to review airport retail sales after it was discovered that some business owners are keeping about half the tax savings meant for passenger discounts.

According to Reuters, most airport retailers require passengers to show boarding cards when paying for goods, but unscrupulous elements have been using that information to avoid paying 20% value-added tax on goods going outside the UK.

In some instances, retailers were pocketing half of every £1 of potential tax savings.

The review, announced by British Finance Minister George Osborne, is set to reassure travellers that buying duty-free goods will be worth their while.

Interestingly, the news of the review comes at a time when there has been some debate over whether buying goods such as duty-free perfume and other luxury items is actually more cost-effective. 

It appears that it all depends on what the traveller is looking for.

For items such as sunglasses, clothing and cosmetics, it all depends on the airport. A CBS News report suggested that it was a case of “hit and miss”.

“Sometimes brand-name clothing or perfumes can be found at an excellent discount; at other times they are cheaper in nearby stores. Cosmetics bargains may be available on items that do not normally go on sale, and occasionally, unique gift packages can be found that contain combinations that are hard to find elsewhere.”

Usually, it is not a good idea to scout for electronics at the duty-free counter.

Online electronics retailers frequently are able to undercut the duty-free price by some margin.

Erin Konrad, a spokesman for CouponPal.com, added: “Even if you see a tech item that’s marked down, it’s most likely an older, outdated model. Typically you’re better off buying the items online from home or at a big-box retailer with a price matching policy.”

That said, duty-free on electronics can work in a travellers’favour if they have the time to shop around for excellent deals.

Singapore, for example, is known throughout the world for affordable electronics. While duty-free shops may stock mainstream items that are priced similarly to those in other parts of the world, the fact that there is so much merchandise means that invariably they will also stock additional items that can be picked up for a song.

Liquor seems to be the one constant when it comes to duty-free shopping, and while nobody should be encouraged to indulge excessively, the shelves of high-end spirits are definitely worth a look. AOL Travel pointed out: “Buying duty free liquor can net you some deep discounts, since the tax alone can be staggering on some brands. The Caribbean in particular is fantastic for alcohol savings, where you can get island-made spirits like rum for just $15.”

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