What, when, how much? Here’s some know-how.

What exactly is duty-free shopping? Duty-free shopping exempts a customer from having to pay customs duties on various commodities, typically alcohol, tobacco and luxury goods for international travellers. Since duty-free items are for consumption or use outside the country, the government doesn’t levy taxes on the goods.

Because the duties on alcohol and tobacco are typically steep wherever you go, shopping for these products in duty-free shops usually means huge savings.

‘’Duty’’ is a generic term describing a variety of taxes imposed on goods. Once outside a country's borders, you can buy duty- free products on flight or on the high seas. International airports get around the tax obstacle because they are in designated ‘’foreign trade zones’’.

Since duty-free shops at airports occupy valuable space, their high rents are doubtless a pricing factor. One little-known aspect of duty-free operations comes from the possibility that some products are being market-tested at these outlets before being generally introduced to local stores. This way, foreign manufacturers can get a fairly swift multi-country response to their new products, without spending too much on advertising and promotions.

Generally, goods that are subject to large duties and high luxury taxes are the better buys at a duty-free store. Depending on the country, the best bargains are on perfumes, liquor and tobacco products. If you know the price of these items at home, you can make wise decisions at the duty-free. Usually, there is a limit placed on the amount of such merchandise you are allowed to import when crossing a border.

In many countries, it is common for a government official to check a departing passenger's documents. At such airports, all passengers have to pass an official "Passport Control" booth before entering the departure lounge. The only exit from the departure lounge is through Customs. Therefore, all persons in the departure lounge are "officially" departing international passengers and can freely visit any duty-free shop.

The US does not require departing passengers to present a passport or other documentation when leaving the country. Therefore, departing passengers need only present their passport and airline tickets and boarding passes to airline officials. A shop employee guards the entrance to the store and requests your boarding pass before allowing you entry. If you do not have a current boarding pass, you will not be allowed in the store.

A Few Thumb Rules For Sensible Duty-Free Shopping