The pandemic will probably push the duty-free industry into even more dubious territory. Its business model is evolving as it seeks to cash in on its special status. You can increasingly buy duty-free goods online well ahead of a trip, then pick them up the next time you happen to be flying, with tax conveniently avoided. Once confined to airports, the principle that some people do not need to pay value-added taxes has spread in many places to tourist shops downtown. Shoppers often sidestep taxes on clothing, home electronics and smartphones, as well as bottles of oak-aged cognac and choice Cohiba cigars.
That is unfair to other retailers and to the non-travelling public. It is why Britain has eliminated most duty-free advantages and tax rebates for foreigners who shop there. Doom-ridden industry predictions about imploding business models and a collapse in retail revenues are reminiscent of the shrill warnings when EU countries ended duty-free shopping for those travelling within the single market in 1999. In fact, there was not a collapse in European cross-border travel—which has thrived.
Closing the duty-free loophole does not mean airports will stop behaving like shopping centres with departure gates tacked on. Weary flyers will still be condemned to pick their way through a maze of perfume spritzers as they emerge from security checks. Airports will continue to announce flight-departure gates ever later in order to encourage passengers to linger in the shops even longer. Bored travellers with hours to kill hardly need the incentive of a tax backhander to top up on chocolate or buy those noise-cancelling headphones. It is past time to call time on duty-free. ■