Duty-free is it worth it?

As much a holiday tradition as cocktails by the pool, does duty-free still offer good value?
 
Learn more
 
 
 
 
 
  • Updated:23 Aug 2005
 

01.Introduction

Duty-free_iStock

In brief

  • Duty-free shopping can still offer good value, but your destination’s exchange rate with the Australian dollar affects prices — and so your savings — substantially.
  • Make sure things like electronic goods and cameras come with a written worldwide warranty and suitable power specs for Australia. For more on this, see Buyer beware (below).

For years duty-free shopping was one of the perks of travelling overseas and substantial discounts could be had on a range of luxury goods from alcohol to watches to perfume. But with the introduction of GST, a whole raft of hidden taxes was phased out, including many of the wholesale taxes and import duties that used to make duty-free goods such good value. So is duty-free shopping still worth it, or can you bag a better bargain just by shopping around here or at your destination?

Please note: this information was current as of August 2005 but is still a useful guide to today's market.


What we did

  • In Feb/March 2005 we priced a range of goods sold in duty-free shops in airports in Australia and popular destinations overseas, and compared them to the prices we could get by shopping around here in retail shops, discounters and even eBay. See Prices compared for details.

Comparisons aren't easy

  • Overseas duty-free shopping can still offer you good value — but it depends on your destination. Singapore is hard to beat for most items, mainly because — at the time of writing — there was such a favourable exchange rate with the Australian dollar. This is the biggest factor affecting most price comparisons and, with most currencies now floated, the price you pay varies according to the exchange rate of the day.
  • Duty-free retailers also take note of the prices offered in other countries and adjust accordingly on a regular basis, so prices are constantly shifting.

Overall, you need to be aware of how good the Australian dollar exchange rate is in the country you’re visiting, and also be willing to spend the time shopping around both before you go and then overseas if you really want the best possible bargain.

Buyers beware

Warranties

If you're tossing up between buying electronic goods in Australia — either duty-free or retail — or in duty-free overseas, consider the following:

  • Because warranties are administered via retailers, if you buy an item and it breaks down your first port of call is meant to be the shop that sold it to you. This is a problem if you bought while overseas and are now back home.
  • Some companies do offer a worldwide warranty service, which means a broker or retailer here may honour a warranty for something bought overseas, but you should check this carefully with the manufacturer, preferably before you travel.
  • If you don’t and you decide while overseas that there’s something you really must have, the shop may well assure you that the warranty will be honoured back in Australia. But remember, you’re getting advice from a shop that probably makes the bulk of its sales to transiting, rather than repeat, customers.
  • At the very least make sure what you purchase comes with a written guarantee of the worldwide warranty and that there are written contact details for the company’s service arrangements in Australia.

Voltage

  • Buyers of electronic goods like computers may also be hit with another problem. While the goods overseas may be cheaper, they may not be designed to run on the same voltage as the ones sold in Australia. This might mean you also have to buy a potentially bulky transformer to make it work, which eats into any savings you make.
  • If you do want to make this sort of purchase, make sure you read the fine print of the specifications very carefully.

This article last reviewed August 2005

 
 

 

Sign up to our free
e-Newsletter

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.