One trip to Cozumel or Grand Cayman and you can't miss the tourist infested diamond shops. Airport frequenters can't miss the duty-free cosmetics, liquor, and cigarettes luring money-spending travelers to shell out big bucks for a seeming good deal. But are these prices truly good savings or just tourist traps?
Buying an item duty-free means you won't have to pay the customary tariff prices when returning to your home country. Traditionally desirable duty-free goods are those produced in the visited countries that are hugely marked up back home due to import taxes. Liquor, like Russian vodka or Mexican tequila, is traditionally much higher when bought in the States. In addition to avoiding the import tax, many duty-free shops even curtail the local sales taxes, which can save a huge amount of money from buying the same product locally. But the duty-free market has expanded to include items that may or may not be a good deal to buy duty free. Only the knowledgeable shopper can decipher between the deals and the duds.
If you plan on making some big duty-free purchases while traveling abroad, do your research first. American tourists are notoriously gullible and easily wooed by foreign accents. Keep these things in mind before pulling out your wad of Euros:
Abstain from the shopping frenzy generated by mobs of tourists on foreign soil. Unless your trip is planned exclusively for shopping, stay out of the shops the majority of your trip and enjoy what you came to see.