Because so many credit cards offer airline reward packages, and as a result of holiday overspending, and holiday insurance and purchase protection packages, a lot of people use their credit cards when they shop at duty free outlets as they return from abroad.
The lure of duty free credit cards spending is that you are saving yourself money buying items that you probably would be buying anyway later, and even better, the taxman doesn’t get his hands on your hard-earned money.
Duty Free Bargain?
It has long been known that duty free credit cards outlets are not offering the best deals on everything, hoping to lure unsuspecting shoppers into paying high street prices and even more for a few select items.
In the past this only fooled those who hadn’t done their research, and the advent of mobile phone Internet access makes this a much more obvious trick.
Credit Card Surcharge Law
Much less well known is the effect of the Australian Credit Card Surcharge legislation, which allows retailers to add a surcharge to goods when purchased using a credit card. The spirit of this legislation was good, with the intention to make it more attractive for retailers to accept credit cards, making them more widely useful.
In practice, however, this legislation has allowed certain less scrupulous marketers to add quite extortionate fees in certain locations, especially those where you have no alternative.
Taxi cabs were for a while the worst offenders, but it seems that now duty free credit cards purchases are hit to sometimes as much as ten percent, although smaller figures are more likely.
The Cash Option
This legislation is currently under review, as duty free credit cards fees charged were intended to be only the same as the transaction fee charged to the outlet by the credit card clearance companies.
In the meantime though, if you want to buy items at duty free and you are sure it is a good shelf price, try and use cash. There are many ATM’s at airports now, so this should be getting easier all the time, but obviously don’t use your credit card if possible for any cash withdrawals or you will end up paying the higher interest rate that is usually charged.
Try to use a debit card.
Duty free credit cards purchases will almost certainly fall back into line with the spirit of the law in the near future, even if the legislation is not changed due to rising customer awareness of the surcharge.
You still have to make sure what you will be charged before making any purchase though, so you can factor it into the actual price you end up paying.
