[Inquisitive]

Long ago I bought a heavy winter jacket at a stopover airport based on a chat with a crew member that my destination was having cold spell and the windcheater I was carrying will not be enough.
Besides that one occasion, I never bought any clothes from airport.

But I regularly buy cosmetics and perfumes for family as they are a bit cheaper.
And like many travellers of the country I am living now, I buy alcohols from duty free shop as tax on alcohol at that country is high.

However, I was tempted on several occasions to buy from Brook Brothers shop at Houston airport just because I used to pass that from United lounge to D gates. The cost seems similar.
Now that temptation is gone after United open Polaris lounge at terminal E as I do not have to pass that shop any more!

[SimonS1]

[postquote quote=988712][/postquote]

I often wonder the same, however I guess ultimately the numbers stack up for the outlet to stay open.

In my experience shopping times can be very condensed….for example particular nationalities passing through the terminal at particular times.

Also for the real luxury shops there are personal shopper or pre-ordered services, where you wouldn’t expect to see the buyer rummaging around in store.

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ASK1945

[SimonS1]

[postquote quote=988769][/postquote]

There is no ambiguity – you paid VAT, or at least the shop did. If they didn’t they were breaking the law.

There may be a single price of £10,000 presented for all travellers, however it is accounted in different ways:

For domestic flyers the price would be £8,333 + VAT £1,667 = £10,000
For ex-EU flyers the price would be £10,000 + no VAT = £10,000

It is perfectly legal to ‘spin’ this as you ‘saving’ the VAT, however unless the shop had sight of a boarding pass showing you were leaving the EU then they are required to account for VAT.

Of course the reverse argument can also be made, if the shop were willing to sell the watch for £8,333 then they have made excess profits from the ex-EU traveller. Hence the arguments about ‘profiteering’ a couple of years back.

[esselle]

[postquote quote=988819][/postquote]

That is why in my original post I was surprised to be told I “qualified” for the VAT free price, and that I wondered if the shop staff had made a mistake.

On the broader issue of airside shops always seeming empty, pre T5 the Rolex store in T4 had the second highest sales of any Rolex outlet in the UK.

[JDTraveller]

The only stores that are duty free are the main duty free stores and only to passengers travelling outside of the customs union. Other stores may offer “tax free” prices to all passengers in the form of a discount to the value of VAT, which is not the same as 20% discount. If you scan your boarding pass and you are tracking outside the customs zone then the retailer will be able to withhold the VAT from HMRC. As Simon says this was done by the likes of Boots and WHS for years without them passing on the discount, helping to boost profits, although they now do pass on the VAT saving on purchase over a certain threshold. Unless you are in a Duty Free store you do not have to hand over your boarding pass.

Other stores like the Dixons and Ted Baker have one price for all passengers. This is not always the net price which allows them to work their margins to let all passengers have the same price.

Travel Retail is a murky yet very interesting world!

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travelworld2

[travelworld2]

esselle

I subject the shop staff weren’t aware of the finer points of VAT payment obligations. As far as they were concerned, you were entitled to buy at the “VAT free” price, even though the vendor shop would actually have had to account to HMRC for that VAT on your purchase.

[esselle]

[postquote quote=988825][/postquote]

Be careful not to confuse “Duty” with “Tax” as they are not the same thing. Duty is levied on a limited number of products, in this context alcohol, tobacco and perfume. Pre the abolition of intra EU duty free, these products were sold free of duty, and thus a lot cheaper than in the high street.

In response to the abolition, the “industry” came up with a different version of “pricing”, inevitably employing some smoke and mirrors to try and keep their offer attractive, and creating “airport exclusives”.

Ultimately it is a very easy decision for the consumer. “The product I want is £x in the high street. If it is less than £x in the airport, buy it, if it is more than £x in the airport, don’t.”

[w8ster]

I regularly buy electronics and alcohol from various airports when it made sense and based on needs. That said I recently bought a polo shirt at LYS which was a complete impulse buy because they had the shirt in the rare colour that I wanted, in my size and that shop had a 50% off. Other than that, I don’t remember the last time I bought clothing from any airport. I don’t like carrying much with carry on..

[ASK1945]

[postquote quote=988836][/postquote]

This is what I was trying to imply, when opening this discussion – which appears to have morphed into a different discussion about “duty-free” and “VAT” ! Shops do have sales and if the price is then right, then people will buy. But, sales at airport clothes shops don’t happen often.

I have already described my own experience of airport departure lounge shops that are successful; my instigating of this discussion was about clothes shops. In fact, WH Smith makes vast profits from airport and railway shops around the world – and without these the company would have folded years ago. My guess is the that it is the same for many jewelry shops and perfumeries.

[canucklad]

[quote quote=988819]It is perfectly legal to ‘spin’ this as you ‘saving’ the VAT, however unless the shop had sight of a boarding pass showing you were leaving the EU then they are required to account for VAT.[/quote]

[quote quote=988825]Unless you are in a Duty Free store you do not have to hand over your boarding pass.[/quote]

I know the original comments were referring to clothes and cost, and now moved onto the inevitable chat about pricing policy.
I’d expect that the Boarding pass is used by retailers simply to claim , or rather justify withholding the VAT
I have noticed that there’s been a reduction in requests to scan my boarding pass at EDI, having said that my recent purchases have pretty much been meal deals from Superdrug. Highly recommend the NY Pastrami sandwich , cheaper and more tasty than BOB stuff

[w8ster]

[postquote quote=988837][/postquote]

I can’t imagine them making profit in any of the clothing stores at departure hall. For major international airports, It may cater for passengers where the particular brand isn’t available at their destination. Otherwise, I would only imagine they use them more as showroom for the brand and leading to people buying at destination or online. If this is true, I would be very interested to know how (if they do) they tie back the profit figures to these showroom to justify their existence. Just my crazy theory. Maybe someone in this group is a retail expert that could shed some light.

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ASK1945

[mscldrew]

I’m deeply annoyed at the fact that Harrods in LHR T5 no longer sell underwear as I often find myself short after miscalculating or extending a mixed leisure/business trip and would rather pay double for a few new pairs instead of paying the hotel to launder my existing. There was actually a period in my life where most my underwear was airport purchased and the odd T-shirt too. So I guess me, I buy clothes in the airport

Pretending for a minute that the most expensive cap in a GAP store doesn’t sell for approx US$20. I wonder given how much it seemed to offend, what your opinion is of those people paying a few thousand dollars for a business or first class seat?

I have also bought several over priced caps, Being shaved/bald I rationalise them as a 1% of 1% of the cost of treating skin cancer.

[Raffles99]

My wife spends a bomb in T5 if left unattended (£175 on a Smythson bag in the sale just last week).

Reasons wealthy people like the shops in Terminal 5:

* they are close together – even on Bond Stret or Sloane Street, it is a longer walk between stores than in the airport

* convenience – wealthy people are usually busy people whose work schedule does not allow them to disappear for a Bond Street stroll during the day and who have family commitments at weekends

* easier – none of the locked doors or surly staff who walk around the store two steps behind you, which is normal on Bond St

The ‘shops are always empty’ view is nonsense. Certainly for people who go in to purchase a specific item, they can be in and out (£1000 lighter) within 10 minutes. They just look quiet.

The downside, in T5, is that the luxury stores tend to be a bit of a ‘greatest hits’ selection for the store involved with far less new season stuff than you’d find on Bond Street.

[fatbear]

In the past couple of years I have purchased a pair of shorts and some swimming trunks before flying on holiday to the Caribbean as I needed new ones and hadn’t bothered to get them any earlier. Mrs Fatbear is prone to buying things from the Burberry store as we we don’t have one nearby.

Changing the question a little bit, does anyone buy from the in-flight shopping ? Mrs Fatbear looks at the scarves in the brochures but nothing else………….

[ASK1945]

mscldrew

You refer to Terminal 5 of LHR. I used my own observations, which included T5 as one of many, so is not on its own typical of what I saw.

“Pretending for a minute that the most expensive cap in a GAP store doesn’t sell for approx US$20. I wonder given how much it seemed to offend, what your opinion is of those people paying a few thousand dollars for a business or first class seat?”

I don’t understand your first sentence. The cap I saw was not in a GAP store and was priced at $45, not $20. Why would I be offended – I just walked away, as I always do when I lose interest in a product. What it did was start an obervation process in several airport departure lounges. Only a small proportion of travellers through any airport pay for first class or business travel, the majority do not. I wondered about a business model which is designed to appeal to a minority, with rentals being so high.

Raffles99

“The ‘shops are always empty’ view is nonsense. Certainly for people who go in to purchase a specific item, they can be in and out (£1000 lighter) within 10 minutes. They just look quiet.”

Your last sentence contradicts your first. I stand by what I have observed.

[Author]

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