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What Cruise Passengers Must Know About Duty-Free Shopping Onboard Ship!

By Mandy Karlik

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Published: 21Oct2007
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One under-recognized benefit of going on a cruise is duty-free shopping. Even if you have no plans of going on anything remotely like a shopping expedition at your ports of call, you can still shop duty free on most cruise ships by just visiting some of the on-board shops.

Duty-free shopping is actually a bit of a misnomer. It ought to be called tax-free shopping. When you venture into international waters (50 miles off shore), merchandise can be sold without having to add on city, state, or national taxes. Duty-free stores are shops that sell the merchandise for exactly the price marked, with no taxes tacked on at the cash register.

Many cruise shops feature luxury items, the kinds of things that would surely attract sales tax and possibly other taxes in many countries. If you are interested in buying a watch that you know costs $500 or a bottle of perfume that retails for about $75 at your local department store, you may not be initially impressed at the duty-free store. The price tags for these two items will likely be $500 and $75 or very close to it.

The difference is that the duty-free price is the total price you'll pay. Buy that same watch in a U.S. jewelry store and you can expect to pay sales tax of around $40. The perfume would tack on about $6 in sales tax. This is based on a rough 8% sales tax rule for the U.S. If you live in Canada, sales tax hovers around 12% and it is even higher in Europe.

Europeans may notice the bargains at duty-free shops more quickly than Americans because in Europe, it is customary for the sales tax to be figured into the price tag before you get to the cash register. In the U.S., sales tax is one of those things nobody talks about until you get to the cash register when it just magically appears on your bill.

Many cruise lines also offer certain luxury items at discounts. If you are shopping for jewelry, particularly gemstones, certain gold and silver items, pearls, and watches, you may be able to nab a good deal besides getting the duty-free benefit. If you are looking for something specific (tanzanite earrings, for instance) and you happen to know the going prices and can assess quality yourself, you should feel very comfortable in the cruise shops. You'll be able to know if you're getting a good deal or not.

I've heard a lot of cruise anecdotes about cruise passengers who combed local ports of call seeking bargains only to find out they could have done just as well or better by sticking to the duty-free shop onboard!

When making a duty-free purchase, keep the receipts. You may be asked to show them upon returning home. A U.S. citizen may bring up to $800 of merchandise back into the country without paying duty. If you rack up more than that, you may be asked to pay a certain amount of duty or tax on the purchase. The idea is that you may bring a reasonable amount of personal purchases back into the country without paying duty but not so much that you could set up your own store!

Another advantage of buying duty-free on your cruise ship is convenience. You can shop at leisure, the cruise ship personnel will likely be friendly and speak English, and you need not carry your purchases around. Many cruise ships offer guarantees on their merchandise, meaning that once you're back home you can contact the cruise line if you experience a problem with what you've purchased. This service is not likely to be as handy from foreign shops, if it is even available at all.

Airports may also have duty-free stores but only for people who will literally be traveling from a foreign country back home. The same principles apply: you may not see radical mark-downs (but then again, you often see good prices) but you will not be charged taxes.

Keep in mind that when you return to the U.S., U.S. citizens can only have $800 in total purchases (duty free or not). After that, the customs officials have the prerogative of charging duty, a tax on what you're bringing in. (Note that duty is not necessarily levied against anyone who brings in more than $800 but it may be.)

If you are traveling with your family, you may combine each family member's $800 duty-free allowance. For instance, a husband and wife with two children has a total duty-free allowance of $3200.

Are you planning your first (or next) cruise? Haven't cruised yet but want to know if it's really as great as people say? Check out http://www.TheCruise-Shopper.com . This article is by Mandy Karlik who loves shopping and cruises. Her last cruise was to Cozumel where she bought a gold and tanzanite ring.

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