Duty Free & Fragrance

Any traveler who has already flown knowsthe duty-free: these are shops where you can walk to kill time and buy a bunch of discount wonders. Between modern treasure trove and store subject to specific regulations, the duty-free could still be a mystery to some of us.

The main advantage by buying in a duty free is to benefits from more attractive prices. Indeed, as its name specified it, the duty free offers products without any VAT. When flying from France, you can benefit from this discount only if your country of destination is outside the European Union. Since the first of July 1999, if your destination is a country of the European Union, you cannot cut VAT. Four exceptions to the rule: (1) Andorra (2) Channel Islands (3) islands Canary and (4) Gibraltar.

 

“I will buy my fragrance at the duty free” 

In 2014, the average price of a bottle of 50ml perfume is 55€ in France. This is an important amount that includes a VAT of 20%, which means around 9,16€. A fragrance is a good that you buy accordingly to your consumption habits. Studies show that people use around 50ml per quarter. So, the purchase of a fragrance is not an urgent buying. You can estimate when you will need to renew your bottle. On top of this, a closed bottle of perfume can be kept for relly long time.

So, people associate the buying of their fragrance to a specific occasion. If they know that they could save 20%, they will be able to wait to make this action. Moreover, a travel is also usually planned in advance, so people can make associations between their travel and the moment when they will buy a new fragrance.

 

New store compete with the airport 

Since few years, new stores poped up in touristic cities: duty free fragrance stores. For instance, if you go to Paris around Rivoli, you can find many fragrance shops that offers a duty free service.

This service is based on a simple princple: when tourist buy goods in France, they have the opportunity to recover the VAT. Usually this is a long process, tourists have to go and declare the goods that they bought during their trip, show all the bills and then receive the VAT that they spent.

Now, some fragrance shops offer a duty free service which allows tourists to benefit from the VAT discount instanately. This allow those specific shops, located on touristics area to take advantage from the fact that tourist can beneficiate from the VAT discount. Also, they avoid an unfair competition with the airport’s duty free shops. 

 

Article posted by Neal