 A traveler recently bought a Canon Digital SLR while
on a cruise to St. Thomas, the Virgin Islands. He hadn't really been looking
for a camera, but the price seemed so good–the sign in the window said 40
percent off on all cameras–that he just couldn't resist. Armed with his
Visa Card, he made the purchase and went away smiling. Soon after his
arrival home, he saw the same camera at an online discounter 25 percent less
than he paid.
This incident and other like it happen every day to
thousands of unsuspecting shoppers. Just what is duty-free shopping, anyway?
The normal and often high import duties, which the U.S. Customs Department
levies on foreign-made goods entering the mainland, do not apply to
duty-free items. Though you will realize better savings on certain items
most of the time, you can buy the same things for less at discount stores
back home. The items with the greatest savings are liquors, tobacco
products, perfumes, watches, fashion clothing, and jewelry; all are heavily
taxed at home.
The best defense against getting stung is to be well
prepared. Knowing prices of items you wish to purchase is one way of finding
bargains. Also, take an inventory of what you might need and resist the
temptation of impulse buying.
The availability and wide use of bank charge cards has
made it relatively easy to purchase items of high cost without the outlay of
cash. Know how much you can afford, or better yet, pay only with traveler's
cheques or cash. A good rule is: If you don't like it, don't buy it.
St. Thomas is one of the world's largest duty-free areas;
an area covering less than one third of a mile contains over 100 shops.
There are two advantages of shopping here. The amount you take home is twice
that of any other place in the world (the same applies to the islands of St.
Croix and St. John)–$800 instead of $400 worth of goods. Also, the
American free enterprise system allows merchants to do such high sales
volume that they can buy at wholesale prices and pass the savings on to you.
However, shop owners pay such high rents and utilities that savings are
quickly eaten up. One shop owner said that it takes at least $250,000 to
open a shop in Charlotte Amalie, St. Thomas' main port.
Another reason for high prices is the bootlegging of some
goods from Hong Kong. Expensive items, such as cameras, are bought cheap in
Hong Kong from illegal exporters and shipped to corporate-owned warehouses,
then distributed at higher rates to shopkeepers. They in turn must sell at
the manufacturer's cost or face a loss, thus higher prices to make up the
difference.
On many items, such as cameras and watches, you pay for
the service of being shown how to use your purchase. You purchase items from
a true discount house or online in factory-sealed boxes without the guidance
of a knowledgeable sales person. And let’s face it, many salespeople in
camera stores don’t know much more about digital photography then you do–they
only know enough to sell cameras. Even though you may think the duty-free
price is less, all the extra costs hike up the price beyond that at a
discount house.
You cannot paint an optimistic picture of this situation.
To find true value, you often must plow through lots of junk. Discounts are
usually applied after the item has been marked up as high as 50 percent. In
addition, shops in the Virgin Islands are competitive. This means the same
item can be bought elsewhere and often for less. This doesn't apply to Sint
Maarten, Barbados, Shannon Airport in Ireland, Hong Kong, or Schipol Airport
in Amsterdam, which are all government controlled. However, prices vary
greatly from one to the the other, making comparison shopping difficult.
Liquor, usually the first item on your shopping list, can
be bought at substantial savings when compared to U.S. prices. For instance,
a fifth of J & B Rare Scotch Whiskey, sells for three times more back
home than in St. Thomas. Liquers such as Grand Marnier go for $10.95 in St.
Thomas and over twice that much back home. Prices in Europe are usually
higher than in the Caribbean. Wines, on the other hand, aren’t a good
bargain in any duty-free shop. If you're smart, you'll check out the local
supermarkets and drug stores for even lower prices on liquors. The very best
buys in the Caribbean are on native rums and exotic liquers.
Perfumes, watches, and cigarettes are the next most sought
after goods. Savings vary here, so you’ll need to know mainland prices to
see a savings. An ounce of Chanel Number Five sells for half what it does in
the States. On all other brands, prices are identical in the Caribbean,
though less in Europe.
Watches run the gamut from luxuriously expensive
investment varieties to the most common quartz time pieces. Savings can be
as high as 30-40 percent over stores back home. But you’ll soon discover a
major problem with some watches. Should they need repair, you won’t bwe
able to take them to your local watch-repair shop. More expensive brands,
like Rolex, may have to be sent to a factory-authorized service center since
local watchmakers usually cannot obtain parts to fix them. In addition to
watches, you can usually discover good savings on fine china and linens.
Cameras used to be the most sought after item in duty-free
shops around the world. Today, you'll often pay more for a digital camera in
a duty-free shop than on the Internet. But service can be a problem for not
only cameras but iPods, Palm Pilots, and mini-computers.. If you discover
there’s a malfunction soon after you buy one, but before you send in your
warranty card, you can take it back to your dealer and receive a new model
in exchange, providing you have the original sales receipt. This applies to
online purchases, as well, for which you’ll be given a special code to
return the item–usually attached to your sales receipt. By purchasing your
camera several thousand miles away, this exchange service becomes
unrealistic. Also, if you have any questions, your local or online dealer
will be more responsive if you've purchased your camera from him.
Some shops like the A.H. Riise Gift Shop, one of the
larger operations on St. Thomas, claim they don't carry anything that
doesn't represent at least a 15 percent savings over U.S. prices. While this
may be true, do consider that your vacation dollar should be geared to
renewing and relaxing you–any thought of going bargain hunting should be
secondary. Any bargains you find can be an added benefit.
Also, be wary of those shops "recommended" by
cruise lines. If this is your first time in a port, you'll take whatever
advice you can get, but usually these shops give the cruise line a small
percentage of the total of the purchases made by their passengers, thus
higher prices.
The best advice is to know before you go. Check discount
prices at home and on the Internet. Take a list of prices along. Know how
much you can spend and stay within that limit. Be wary of "sales,"
as they are usually mark-downs after mark-ups. Finally, find out about local
products, such as rums, liquers, colognes, jewelry, etc. You'll get your
best buys on them.
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