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SHOPPING FOR DUTY-FREE BARGAINS
 
(2015 - Spring Issue)

Writer: JANE STOKES



Duty-free signs  call out to us at U.S. border crossings,  at every international airport, on cruise ships, and occasionally on the streets in popular tourist destinations.

Countless internationally-made goods are offered, many of which are substantially cheaper than at home. Items, such as alcohol, chocolate, beauty products and tobacco, are everyday purchases, so a good deal on those is worthwhile. However luxury items, such as fine jewellery and gems, watches, perfume, leather goods, crystal and electronics, are still pricey enough to stop us in our tracks.   

So on that final day of your vacation, when the lineup at the border is more than an hour long or the airport is too noisy and distracting, perhaps a money splurge is too much to consider. And so, just like the last trip when you walked away from an exquisite, half-priced Gucci briefcase, this time you returned home without that one-of-kind Cartier watch. Regrets?

There will always be another duty-free shop, so be prepared. Start by researching at-home prices on items you particularly want so you can spot a deal. Determine how your departure airport ranks for duty-free shopping and pinpoint specialties produced in your destination, such as cashmere from Scotland, electronics from Hong Kong and cognac from France. To eliminate pre-flight pressures, investigate whether your destination offers duty-free shopping on the main streets. And, before you leave home, learn how to stretch your Canada Customs allowance. One way is to purchase products on which duty cannot be applied due to our country’s free trade agreements.

How “duty-free” is the Item?

The concept seems simple enough but be aware that a “duty-free”offer applies only in the country of purchase. It is a local promotion to encourage visitors to spend money there. Once you arrive home, Canada has its own excise duty and sales tax rules, starting with a set dollar exemption if we buy personal items on trips longer than 24 hours. If you overspend your allowance, an excise duty plus Canadian sales taxes will apply (cbsa-asfc.gc.ca).

Is there a quick way to evaluate a bargain?

Yes. Start by pinpointing the total cost of your desired item if you were to buy it in Canada or online. For example, if you want a new state-of-the-art camera and plan to visit Hong Kong, a comparison price list in your pocket will help. Be sure to convert that final Hong Kong price accurately into Canadian dollars to evaluate the deal.  

Which airports offer the most?

The premise is departing passengers are in a sort of “no man’s land”where items should not be subjected to import duties. With this windfall, several super brands, such as Hermes, Dior, Swarovski, Gucci, Armani and others, are passing on a grand buying opportunity for international travellers. While discounts from 20 to 60 per cent off are real, the actual savings depend on the strength of our Canadian dollar at the time of purchase. Even so, the most talked-about airports for variety and savings include:

•           Incheon International, near Seoul, South Korea

•           Dubai International, United Arab Emirates

•           Heathrow Airport, London, England

•           Hong Kong International, Hong Kong

•           Paris Charles de Gaulle, France 

•           Milano Malpensa, Italy

•           Singapore Changi, Singapore

•           Zurich International, Switzerland

•           Madrid-Barajas, Spain

•           Copenhagen International, Denmark

What’s important to know for shopping in Europe?

Airport duty-free offers are at their best on goods made outside that country. For locally-made items however, city retailers may offer you tax-free shopping, a system that allows a refund of the value-added tax (ranging from 16 to 25 per cent), which is embedded in the ticket price. So if, for example, you want to buy Tumi luggage in Italy, Begona shoes in Spain or Fauchon fine foods in France, you can get a good discount without having to rush such a purchase at the airport.

However, opting for this tax-free offer can be a complicated process. First, to obtain the VAT refund, you have to spend enough (on average $300) and retailer paperwork must be stamped at the airport to get the tax back in either cash euros or as a credit card reversal. To fully understand the tax-free terms (such as non-applicable items, shipping, locations and alternative refund methods), visit the tax-free shopping page of europeforvisitors.com.

What should one buy in the Caribbean?

Removing the tax for travellers has inspired “duty-free destinations” where such bargains are offered on the streets. The most popular places for volume and choice are:

•           St. Thomas, U.S. Virgin Islands, where no fewer than 50 duty-free shops offer precious jewellery, watches, perfume, leather goods, gemstones and more. 

•           Sint Maarten-St. Martin, where all goods are duty-free. Begin on the Dutch side for bargains on electronics, leather, jewellery and liquor. On the French side, look for deals on cognac, cigars, perfume and liqueurs.

•           Bahamas, for super-brand deals on perfume, watches, precious stone jewellery and more. 

•           Aruba, for bargains on fine china, perfume, crystal, jewellery, cameras and European clothes. Haggling is not the custom here.

•           Cayman Islands, a standout for watches, diamonds and Colombian emeralds, plus leather goods, designer sunglasses and even antique treasure coins.

Caribbean caution: The ultra-low pricing on alcohol is eye-popping here, but there are two main deterrents for buying a lot. First, most airline security rules don’t allow large liquids in carry-on bags, and secondly, Canada Customs restricts the quantity per adult (for example, just 1.14 litres of spirits) unless you are willing to pay duty and Canadian sales taxes.

Any tips for shopping in the United States?

Keep your Canada Customs allowance in mind, especially on short trips, but here’s the good news. Many products do not have to be included due to the North American Free Trade Agreement. Generally, items “made”in the USA, Mexico and Canada (proven on the label to be manufactured nowhere else) are often free of duty if they are for your personal use. NAFTA terms are complex however, so to confirm this duty freedom on a specific item, talk directly to a border official at 800-461-9999. Before travelling to the U.S., check out the website, madeinusachallenge.com. It posts a comprehensive master list of American brands, which could easily sidestep your allowance. However, these goods must still be declared and Canadian sales tax will likely be charged. Additional free trade agreements are in the works with Canada (such as South Korea) so shopping anywhere in the world is looking bright.   

What does Canadian Customs charge if we go over our allowance?

If you make a full, accurate declaration of the Canadian-dollar value, with receipts, it paves the way for the special duty rate of seven per cent on another $300 worth of goods, plus provincial and federal sales tax. This rate does not apply, however, to alcohol and tobacco products, nor to items shipped home (cbsa-asfc.gc.ca). 

Jewellery caution: Items you are wearing could be questioned by Canada Customs officials. Unless you’re prepared to bring pre-ownership proof such as appraisals or written and photographic certification, and get it all validated before you leave Canada, it is recommended to travel with as little jewellery as possible

 
 
 
 
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