Admit it: You’re not 100% sure what duty-free is. Well, it's time to find out! Here’s what you should buy duty-free at the airport, along with the rules to abide by.
What Is Duty-Free Shopping, and Can It Save You Money?
Published on Dec. 16, 2024
Ah, the mysterious allure of duty-free shopping. A temptation for anyone traveling overseas, the bright “DUTY-FREE” signs are unmistakable at most airports … and often unavoidable as you’re forced to walk through what’s essentially a mini-mall of merchandise as soon as you clear security. But what is duty-free?
Even some frequent travelers are stumped by this puzzling phrase and can’t answer the question of what duty-free shopping actually is. But as a global tour operator and seasoned international traveler, I’ve been in a few duty-free shops in my day—and recently made some big-ticket purchases in Milan’s airport—so I know how to get the most bang for your duty-free buck.
With the help of James Mullaney, president of Duty Free Holdings, I’ll uncover the truth behind this mystical designation. Most importantly, we’ll discuss what products you should scope out for deals in the duty-free shop—and what things you shouldn’t buy at the airport.
So what is duty-free, really? Read on to get the scoop, including whether it can save you money and which items are totally worth shopping for as you wait for your flight.
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What is duty-free?
Just what does duty-free mean? When goods are labeled “duty-free” or purchased from a duty-free store, they’re exempt from local import taxes, value-added taxes (VAT) and other taxes and fees (which are also called duties) placed on goods by the country you’re visiting. This allows people to save money on luxury items that are normally highly taxed, including liquor, tobacco, fragrances, cosmetics, designer products, candy, skin-care items, wine, gourmet food, jewelry and even souvenirs.
What is a duty-free shop?
These are stores specifically selling duty-free goods, sometimes specializing in a specific type of product. You will find duty-free shops at international airports, at border-crossing train stations and on cruise ships.
Pro tip: Mullaney says to keep an eye out for duty-free shops in border towns and seaports as well.
How does duty-free work?
If you’re shopping directly from a duty-free specialty store, you just … shop! It’s a great thing to do on your airport layover, and you can really score some great deals. Plus, “some items are exclusive to duty-free shoppers and are only available in these locations,” Mullaney says, so they’re worth buying.
Just make sure you have your boarding pass and passport on hand to verify for the cashier that you’re traveling out of your home country. And bonus: Even if you’re leaving the United States for just a weekend, a minimum visit of just 48 hours allows you to shop duty-free.
But stores aren’t the only places you can escape duties. When buying big-ticket items abroad, particularly in Europe, make sure to save your receipts for retail purchases, including clothing, handbags and any other material items considered imports in the United States. You can have the VAT tax (which is similar to sales tax) returned to you at the duty-free office at the airport before you leave.
For instance, on a recent trip to Milan, my friends and I made purchases at the luxury mall in Galleria Vittorio Emanuele II. We not only registered at the stores to receive tourist discounts but also received VAT tax refunds at the Global Blue office at Malpensa International Airport before we left.
There’s just one catch. “While the purchase is tax-free from the country you are departing, the products may be subject to import duties upon arrival in your destination country, depending on their regulations,” Mullaney says.
Can duty-free products save you money?
Absolutely. “You can save on duty-free shopping items that are heavily taxed, like alcohol and tobacco,” Mullaney says. But the amount you’ll save when buying duty-free at the airport depends on the country, currency, exchange rate and products. For example, in Europe, duty-free shops are also tax-free, which can save you as much as 25% on your purchases.
However, “prices and product offers do vary based on the country and airport, and some items may be priced similarly to regular retail store prices,” Mullaney says. In my personal experience, some may even cost more due to exclusive packaging or edition releases.
So before you buy, make sure you:
- Use a currency converter to ensure you are getting a good deal.
- Use a credit card with no foreign transaction fees.
- Opt to pay in the local currency if given the choice, as you will likely get a better currency exchange rate through your credit card company than you will through the duty-free shop.
What are the rules of duty-free shopping?
You can bring back a certain amount of goods to the United States without paying import duties—provided the total value is less than your “personal exemption.”
So how much is the exemption? “Each international traveler entering the U.S. is not required to pay duty fees on the value of goods [up to] $200, $800 or $1,600,” depending on the country you visited and how long you stayed, Mullaney says. (The most common exemption is $800.) This includes limited quantities of alcohol—up to one liter duty-free, and purchasers must be age 21 or older.
But you must declare what you’ve brought back, whether the goods fall under your personal exemption or not. “Exceeding these amounts may result in additional duties, so it’s essential to declare all purchases upon re-entry to avoid potential penalties,” Mullaney says.
I learned this the hard way on my layover from Barcelona to Philadelphia; airport security pulled me aside and threatened to take away my TSA Pre-Check status for not declaring my “imports” in Customs because the luxury items I had bought were easily spotted as VAT-free purchases. Fortunately, the 3% flat duty rate for European goods and Internal Revenue Tax (IRT) I had to pay wasn’t much. However, this rate can be higher on goods from certain countries—check the U.S. Department of Commerce’s website for information on countries that may become subject to a higher-than-normal duty amount.
One more crucial note: All of this applies to gifts you’ve bought for others too. “If you are buying personal gifts [and bringing them back with you], all gifts must be declared, which may be included as part of your duty-free personal exemption,” Mullaney says. If you choose to mail them, “gifts worth up to $100 may be sent tax and duty-free to U.S. friends and relatives.” If they’re over that amount, the post office will make the recipient pay duties—which they likely won’t appreciate!
How can you get the most out of duty-free shopping?
If you’re getting a VAT tax refund from regular retail stores, you can save thousands of dollars on high-end designer goods purchased abroad. In luxury shopping districts such as Avenue des Champs-Elysées in Paris, Passeig de Gracia in Barcelona, Corso Vittorio Emanuele II and Via Montenapoleone in Milan, Via dei Condotti in Rome and other Fifth Avenue–like areas, a VAT office is typically centrally located within the neighborhood.
Global Blue and Planet Tax Free are popular refund facilitators. You can sacrifice a small percentage of your refund for an instant cash return in the currency of the country you’re in or get a full refund to your credit card with no fees if you’re willing to wait a few days, which is the option I always choose.
But if you’re shopping directly at duty-free stores, Mullaney advises a bit of preplanning. “To maximize your duty-free shopping experience, check the prices of desired items both at home and in your destination to identify potential savings,” he says. In addition, you can even shop online before your flight through sites such as La Boutique and have your items delivered to you at your terminal.
A few more tips from Mullaney:
- Know what your duty-free allowances are in your home country to avoid unexpected duties.
- Focus on high-tax goods that can provide the most savings.
- If you plan on buying liquids like alcohol and fragrances, know your carry-on luggage rules. Otherwise, pack them in checked luggage.
- Look out for special promotions or travel-exclusive products that provide added value.
What should you buy from the duty-free store?
“Top-selling items at duty-free stores are spirits and wines, as well as tobacco products, as they are high-taxed items and can offer substantial savings,” Mullaney says. “High-end perfumes are also popular items and may be available at lower prices at duty-free stores.”
But that’s not all. Check out the items below the next time you’re shopping duty-free.
Chocolates and candies
Duty-free stores often offer sweet treats you can’t easily find in the United States. They’re commonly marked up when you purchase them at U.S. shops, thanks to the importing expenses. Keep an eye out for:
- Brands like Cadbury, which is made differently in the U.S. than it is in the U.K.—a favorite of Alexis Kelly, a travel editor at Fodors, and travel writer Paul Eisenberg
- Unique flavors of familiar candy, such as Kit Kats in Japan
- Curious shapes and packaging sizes, such as giant Tic Tac boxes filled with miniature ones
- Specialty sweets, such as Swiss chocolate if you’re flying from Geneva or Zurich
Luxury designer goods and accessories
Designer brand mavens know that the best buys for upmarket goods are nearly always found closest to where they’re manufactured. For instance, when traveling home from Paris a few years ago, Kelly spotted a duty-free deal on Longchamp bags at Charles de Gaulle airport that was so good, she ended up buying three from the French-owned company.
And you don’t always need to be exactly where the products are made—just close enough. I got a fantastic price on a limited-edition trench coat by London-based Burberry … in Italy.
Mid- to high-end watches are another good buy, especially on cruise lines, and designer sunglasses are a favorite at airports. Just remember to:
- Do an online search to investigate comparative prices at stores back home and on web-based discount retailers.
- Consult a currency converter to double-check if you’re truly getting a deal.
Liquor
Getting alcohol closer to where it’s from often means a wider selection and specialty brands. For example, I stock up on 1921 tequila cream whenever I’m at the Cancún airport because this Mexico-based brand isn’t widely available in the United States. Buying multiple bottles often offers great savings—typically 15% off.
The wide range of choices, bulk sales, limited editions and gift packages make spirits one of the top three most popular categories for duty-free shopping.
Do some homework to find out what you should be buying at your specific destination. For example:
- Limoncello is to Italy as tequila is to Mexico.
- Rum is typically a good buy in the Caribbean.
- Scotch at most duty-free shops comes with significant savings and interesting editions.
- Puerto Rico offers boozy juice boxes by the case.
- Wine from France, Spain, Italy, Argentina and Israel are usually great scores and will be packaged for safe flight.
Remember, the TSA says you aren’t allowed to unscrew your duty-free drinks in the air. Be patient and wait until you’re home to get a taste.
Skin-care and beauty products
Duty-free stores with samples offer some of the best opportunities to test out how high-end products perform under the toughest circumstances: in the sky, where the air is dry and the stress is high. Products from trusted skin-care brands like L’Occitane, Clarins, Shisheido and others are often available in duty-free airport shops, allowing you to pick up travel- or full-size versions (since you are already through airport security checkpoints).
- Travel & Leisure editor Maya Kachroo-Leving spends foreign currency on single country-specific products, like French micellar water and Fijian coconut oil.
- I’ve saved money on domestic brands like Clinique by buying special promo kits of my favorite daily moisturizing gel.
- Other skin-care products to pick up include antiaging serums, night creams and emollients, face scrubs and lotions.
High-end perfumes and cosmetics
Who couldn’t use a little freshening up before flying home? “High-end perfumes may be available at lower prices at duty-free stores,” Mullaney says. And because duty-free store employees work on commission, they can’t wait to spritz you with the latest indulgent fragrances. I always “try” one of my favorite scents—Gabrielle by Chanel, Coco Mademoiselle or Miss Dior Blooming Bouquet—on my travel hoodie before getting engulfed in “airplane smell.”
There are often airport kiosks for popular luxury cosmetic brands like Benefit; airports may even have full storefronts for Mac Cosmetics, Estée Lauder and others. Look for:
- New scents from your favorite fragrance brands
- Unique variations from your usual fragrance line
- Fragrance bundles, which may offer smaller sizes, variety packs or travel atomizers
- Limited cosmetic palettes specially designed for travel
- Promotional packages for luxury cosmetics, such as double-pack eyeliners or mascaras
Local gourmet food items
Food remains one of the best ways to share a travel experience. In international destinations like South America and the Caribbean, coffee is a popular pick since it’s more aromatic and not as expensive as when it’s been mass-imported. It makes a great gift for a family member, friend or boss.
Specialty food items are also perfect souvenirs, and when you buy them in duty-free shops, you know they’re not on the United States’s list of prohibited food items. On her frequent trips to Slovenia, Chicago-based travel writer Vera Holyrod never goes through duty-free at the airport without buying some local honey and sea salt because she believes the prices are fair and quality is high. I will pick up Valla Vainilla in Mexico and recommend that foreign travelers to Montana don’t leave without huckleberry tea or syrup.
Other area-specific items include:
- Vanilla from Tahiti
- Herbs and oils from Greece, Spain, Italy and Turkey
- Shortbread cookies from England and Scotland
- Vacuum-packed cheese from the Netherlands, Italy and France
- Pistachio marzipan balls (Mozartkugels) from Austria
Avoid a common travel mistake by remembering you can’t bring home fresh fruit and produce, even if it has a thick peel—eggs from invasive species may be riding on them (eww!).
Last-minute gifts
The assumption used to be that you were paying way more for an airport souvenir than if you bought one during your trip, but that price gap has become narrower in the past several years. Plus, many international airports now feature local artisans in their gift shops: A friend of mine picked up a gorgeous hand-painted alebrije in Cancún at fair market value at the tail end of our beach vacation. Shop during the holiday season, and you can score unique ornaments and snow globes or, in warmer locales, towels, hammocks and blankets.
Plus, as with skin-care, cosmetics, fragrances and liquor, it’s a good idea to seek out exclusive products and sizes when looking for gifts, such as:
- Larger-than-usual exclusive versions of products
- Unique packaging that you have never seen at a store near your home
- Travel exclusives of popular brands
FAQs
Can you shop the duty-free stores at a U.S. airport?
No, duty-free shopping is reserved exclusively for international travelers leaving the country who will be technically exporting their purchases. Passports and boarding passes are required at the register as proof.
Are there limits on bringing home alcohol from a foreign country?
Yes and no. There’s no federal limit on the amount of alcohol one can bring in for personal use (although large quantities might arouse suspicion), but you’ll be responsible for duties for anything over a liter, which is the personal exemption limit. For instance, after visiting Mexico and the Caribbean islands, I’ve brought home multiple bottles of tequila and rum without anyone blinking an eye.
Additionally, check the requirements for your state, as bringing in over a certain amount of alcohol may require a license.
How do I declare and pay taxes upon arrival?
Keep all your receipts, and upon return to the United States, you must fill out a U.S. Customs form to declare any purchases that exceed the duty-free personal exemption limit, which in most cases is $800. Families can fill out a joint declaration if living in the same household and returning home together.
A flat duty rate will apply to items that are over the personal exemption amount and therefore dutiable. Here’s the example U.S. Customs offers: If you buy two bottles of liquor (each a liter), one will be duty-free under your personal allowance, but the second will be dutiable at the 3% flat rate.
If you owe any duties, you’ll have to pay before clearing customs, in most cases by U.S. currency or personal check; in some locations, MasterCard or Visa may be accepted.
Are all duties for all goods the same?
No. The United States imposes higher-than-normal duty rates on some goods from certain countries. For example, the U.S. government has imposed a 100% rate of duty on certain products from Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and Sweden. If you bring back more of these products than your exemption covers, you will pay as much in duty as you paid for the product or products.
However, U.S. Customs says that typically, “most of the products listed are not the type of goods that travelers would purchase in sufficient quantities to exceed their exemption.”
What countries are exempt from duties or offer reduced duties?
The Caribbean Basin Initiative (CBI), Caribbean Basin Trade Partnership Act, Andean Trade Preference Act and Andean Trade Promotion and Drug Eradication Act eliminate duties for many products from Caribbean and Andean countries.
The North American Free Trade Agreement with Canada and Mexico allows us free or reduced duties on anything grown, manufactured, produced and then purchased from those countries. The same goes for Jordan, Israel, Chile and Singapore, which have their own free-trade agreements with the United States.
Finally, many products from certain sub-Saharan African countries are exempt from duty under the African Growth and Opportunity Act.
Additional reporting by Jeff Bogle.
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Reader’s Digest has published hundreds of travel stories that help readers explore the world safely, easily and affordably. We regularly cover topics such as the best places to visit (and the best times to visit them), tips and tricks to zoom through airport security, flight-attendant secrets, hotel-room hacks and more. We’re committed to producing high-quality content by writers with expertise and experience in their field in consultation with relevant, qualified experts. We rely on reputable primary sources, including government and professional organizations and academic institutions as well as our writers’ personal experiences where appropriate. For this piece on duty-free shopping, Su-Jit Lin tapped her experience as a longtime journalist, seasoned international traveler and global tour operator. We verify all facts and data, back them with credible sourcing and revisit them over time to ensure they remain accurate and up to date. Read more about our team, our contributors and our editorial policies.
Sources:
- James Mullaney, president of Duty Free Holdings; email interview, November 2024
- U.S. Customs and Border Protection: “Types of Exemptions”
- U.S. Customs and Border Protection: “Customs Duty Information”
- U.S. Customs and Border Protection: “Duty—Recipients of Gifts Mailed”
- Alexis Kelly, digital senior editor at Fodors Travel
- Paul Eisenberg, travel writer; email interview
- Maya Kachroo-Levine, editor at Travel & Leisure; email interview
- Vera Holyrod, travel writer; email interview
