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Monday, March 27, 2006

Heavy-duty duty-free

Duty-free. Savour those words. Duuu-tyyyy freeeee.

Bargain, right? Well, sometimes. If you can control yourself.

The reality is, duty-free is only going to save you money if:

1) You would normally buy that stuff anyway. Do you typically spend your Friday evenings quaffing Rœderer and puffing on Montecristos? Me neither.

and;

2) The goods you're purchasing actually have significant sales or import taxes on them in the first place.

In Australia and much of the world, many "luxury" goods like handbags, perfumes, sunglasses, cameras & computers just don't attract much tax these days. Once upon a time, these goods were taxed at 30%, so duty-free was a real saving. But these days, luxuries attract maybe 10% at most. Now, how hard is it to find a sale offering 40%-off, 50%-off, or more? Not hard, right? So really, duty-free on these sorts of things isn't much of bargain, and you can probably find a wider selection if you stick to the original retailers anyway.

As for perfumes and cologne, there is a certain allure to picking up something on the way through. But to get your money's worth, don't buy the large (100/90ml) bottles. They may be cheaper-per-millilitre, but the fragrance only has about a 12-month shelf-life when it will be at its radiant best, after that it will start to change its character and become noticeably, umm, Britney. And the only way you'll get through 100ml of fragrance in 12 months is to go out every single day smelling like a muskrat. So really, buy a 50ml bottle and put the $50 you save into your holiday bar tab.

In fact, when it comes to duty-free, if you want to really save, you have to sin. I'm talking booze and fags. And by fags, I mean, well, fags. In most countries, alcohol and tobacco attract about a jillion percent tax, and when they remove that, the price really comes down.

But even so, the best bargains are at the bottom end of the market. Because the "duty" is imposed on the alcohol content alone. So, since a bottle of Coyote Tequila ($A35.00) has the same alcohol content as a bottle of Lous XIII ($A1350.00), you save a princely $15 on the alcohol-related duty. That means your bottle of firewater has come down in price by about 40%, whereas your fine cognac is about 1% cheaper.

And it's the same for cigarettes. In Australia, and in many places, the government imposes a "per stick" tax. So your 40-pack of Longbeach attracts more tax than do 25 Havana cigars. And without the duty, your Longbeach get super-cheap, while the Havana cigars, with their premium prestige, remain highly-valued.

So really, to be a Bargain Queen in the Duty Free store, you have to sail through customs with a 50ml bottle of J-Lo, 2 litres of Bacardi and a carton of menthol cigarettes. I don't think so.

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2 Comments:

  • At 9:10 am, Blogger Scarpediem said…

    Oh, I agree! I've come to regard duty-free as one of these tired scams that people were bound to eventually catch up on. I used to linger in airport shops because, frankly, there was no Hermes boutique in either cities at beginning and end of my trip. That doesn't mean I actually bought anything, and it's highly unlikely that I ever will.

     
  • At 12:05 pm, Blogger The Bargain Queen said…

    We buy all out spirits duty-free if we can because they're so much cheaper, but that's literally all we buy. Cosmetics, bags, perfume... none of them are much less than retail but they still seem to sell! I'm sure people just buy stuff because they're bored waiting for their plane :)

     

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