Why do some airport shops require your passport when you buy anything?

Question

I've seen some, but not all, airport shops require my passport whenever I bought something, and others requiring my boarding pass. Why do they require the traveller's passport? The last instance of this was in Dec 2016 in Phuket, Thailand, where a souvenir shop didn't just check "for security" to see if my passport details match those of my credit card, but entered in their computer system all the information in my passport - name, passport number etc.

This personal data collection by a random vendor is an added risk of identity theft for the traveller. Vendors gain little demographics insight from this, since the majority airport purchases are one-offs (as opposed to, say, a loyalty program), but assume the risk of data breach, which can damage their reputation and possibly (hopefully) result in fines,

I doubt this practice is mandatory, because at the same airport where that souvenir vendor demanded my passport, a pharmacy (Boots) and restaurant did not.

Answer 1

Many (but not all) shops in International departure (and to a lesser extent, arrivals) areas operate as "tax-free" or "duty-free" - even those that are not actually classified as tax or duty free shops.

In order to sell things duty/tax free, there are regulations that vary depending on the local laws (which could be federal, state or county/etc based laws) around how they must confirm that a passenger is indeed departing on an international flight and is thus allowed purchase goods duty/tax free - as opposed to (for example) someone that simply works in the airport and must pay taxes.

The exact requirements vary, but will frequently include things like name and/or passport details for the purchaser, and/or the flight number and date that they are departing.

For example, the UK rules include that :

You must provide your customer with an invoice or till receipt for each sale, which must show the following details:

• voyage or flight number and date

[...]

And that these details must be taken from

• a boarding card
• airline ticket

which must include the:

• date of flight/voyage
• departure or boarding time
• flight/voyage number
• final destination

Specifically for the UK, a passport is not necessarily required, but the rules do state :

However, if you have any doubts that the passenger is genuine, ask to see alternative documents (such as their airline ticket and, if necessary their passport).

In order to avoid any potential issues, some shops may simply have a policy of asking for a passport from all passengers - in much the same way that many places will ask for ID from all patrons before selling alcohol/tobacco, even if the person is clearly over the legal age for those products.

Much like illegally selling alcohol/tabacco to a minor, selling good duty/tax free to someone that should not be purchasing them is a major issue that could result in large fines for the business - so having such a policy does have merit.

Edited to add :

The Question has now been modified to give Thailand as an example. Thailand has different duty/tax free requirements for citizens/non-citizens, as well as for ordinary passport holders compared to diplomatic passport holders. I can't confirm the documentation requirements as I don't speak Thai, but it would be at least feasible that they are required to keep details of the customers passport.

Answer 2

While @Doc's answer is technically correct, I think the reason is a lot more trivial: the shop wants to collect statistics about their clients. If they merely cared about avoiding tax-free sales to employees or people flying domestically, they'd allow you to shop anonymously as long as you're paying duty-inclusive prices. They could also ask to see your boarding pass to verify you're actually flying, which is the way it's done by shops around the world. Sadly (for them) the boarding pass doesn't contain vital marketing data such as citizenship, age, city of residence, etc.

There has also been a story in the UK where duty-free shops demanded passengers to show their boarding passes in order to claim back VAT, but didn't actually pass on the savings to the buyers. It may therefore be possible that the shop can claim back some of the taxes based on your citizenship, without passing any of the savings to you. Since you've added Thailand in your update, I presume that's the main reason.