Iceland is one of the friendliest and safest countries in the world. But while most Icelanders take pride in hospitality and kindness, there will always be a small number of swindlers and charlatans who are quick to take advantage of unsuspecting visitors.
Sadly, quite a number of establishments in Iceland sell goods and services that are either counterfeit or more expensive than normal.
So, to avoid falling victim to plots and schemes that are solely geared towards gullible travellers, take note of our list of the 9 Worst Tourist Traps in Iceland before setting out on your holiday.
Use this Iceland travel guide to help you avoid the most notorious Iceland tourist traps. We’ll guide on everything from getting a fair price for a taxi in Iceland to avoiding counterfeit goods.
A china-made woolen sweater from 66° North.
The "Lopapeysa", or Icelandic woolen sweater, is perhaps the most traditional Icelandic piece of clothing.
They originated in the early 20th century when imported threads transposed traditional Icelandic attire and the population had to come up with new ways of utilizing an unexpected abundance of native sheep wool.
Today, the Lopapeysa has become a traditional Icelandic garment that is fundamental to the unofficial national costume and is sought out by travellers and locals alike.
But sadly, not all of the "Icelandic" woollen sweaters are authentic. In more recent times, light was shed on an ongoing Lopapeysa fiasco.
This started when the Icelandic Minister of Industry and Commerce, Ragnheiður Elín Árnadóttir, presented an "original Icelandic" Lopapeysa to Chicago Mayor, Rahm Emanual,
The Lopapeysa in question was designed by 66° North and sold for EUR 230 in numerous shops in Reykjavík.
But the problem was that this particular sweater turned out to be machine-made in China. This has since been found to be the case for many of the woolen sweaters sold for obscene amounts of money in Iceland.
To ensure that you get your hands on an authentic Iceland-knit quality Lopapeysa, you would do well to buy from local farm stays.
For example, the Handknitting Association of Iceland or Thorvaldsens Bazar at the corner of Austurstræti and Veltusund in central Reykjavík.
The best drink in Iceland is free of charge.
Iceland is blessed with an abundant freshwater supply. The quality of the water that runs from every tap is quite exceptional and you can ask for a free glass of water anywhere you go, even if you’re dining out.
Despite selling water in Iceland being like selling sand in the Sahara, overpriced bottled water is on offer almost everywhere in Iceland.
There seem to be no limits to how far some people are willing to go in order to push their products.
Previously, the owner of Hotel Adam in central Reykjavík went as far as warning his guests not to drink the tap water in their rooms. He instead instructed his guests to buy bottles of water branded with the hotel's label for ISK 400 each.
An investigation into the incident revealed that the hotel's tap water was perfectly clean and safe to drink. It also showed that the water in the bottles sold there actually came from the hotel faucets.
To avoid falling for a water swindle in Iceland, simply bring your own bottle. You’re safe to fill it up from any faucet and drink free clean water for the duration of your holiday.
Renting a car in Iceland is relatively expensive.
With car rentals offering numerous extra insurances (including ash and sand insurance, windshield insurance, and gravel road insurance) the total cost of renting a car can quickly reach huge amounts if you are not careful.
Some if not most of these extra insurances are, however, quite reasonable.
A car rental company offering ash and sand protection would have been lampooned a few years back.
However, after the cataclysmic eruption of Eyjafjallajökull in 2010, where a large portion of the Icelandic car rental fleet was severely damaged due to heavy ash and sandstorms, ash and sand protection became standard procedure.
In fact, ash and sandstorms can virtually peel the entire coating from off a car almost everywhere in Iceland.
You’re safest to avoid this only when travelling in the Westfjords where neither sand nor ash storms are known to occur.
An insurance you can definitely do without, however, is theft protection.
Motor vehicle theft in Iceland occurs extremely infrequently and locals are known to leave the engine running to keep their cars warm in winter while shopping or running small errands.
In fact, the odds of your car being stolen in Iceland are about the same as being hit by lightning, and there are no thunderstorms in Iceland.
The Krona (ISK) is the currency of Iceland.
After the economic collapse of 2008, the value of the Krona dropped to staggering depths.
To save the country from bankruptcy, the central bank tried to stabilise it by pegging it against the Euro.
Soon after, however, the Krona continued to plunge in value as investors feverishly converted their Icelandic assets into foreign currencies.
In a countermeasure, the Icelandic government issued strict capital controls, which are in effect to this very day.
Because the value of the Krona is virtually unilaterally determined by the Icelandic Central Bank, the domestic exchange rate is not the same as the off-shore exchange rate.
Since the capital controls restrict the extent to which investors holding krona-denominated assets abroad can get a hard-currency return, banks outside of Iceland generally do not carry the Icelandic krona.
Therefore, you’ll have to be very careful not to carry large amounts of currency with you abroad.
There is a bank at Keflavík Airport where you can exchange your currency. However, the branch in question uses an exchange rate that is less favourable than the one used in other Icelandic banks.
To avoid being stuck with large amounts of Krona's abroad, remember to change your money before going to the airport at the end of your holiday.
Icelandic taxis are identified by the internationally recognized yellow roof sign, and they all use official mileage meters.
Usually, there will be rows of taxis outside bus centres, on Bankastræti in downtown Reykjavík, outside the larger hotels, and near bars and nightclubs.
However, one row of Taxis you should avoid like the plague is the one that awaits you outside the Arrival Terminal in Keflavík Airport.
The fare for the one hour drive from Keflavík Airport to central Reykjavík costs ISK 15000-18000 (EUR 115-140) while taking the Flybus to the Central Bus Station only costs ISK 3300 (EUR 24).
The most expensive grocery store in Iceland is 10-11.
This all-encompassing franchise, whose hospital-green neon lights will haunt you from arrival to departure from Keflavík Airport, specializes in peddling overpriced junk food and a limited selection of grocery items to unsuspecting travellers.
But as if being by far the most expensive convenient store in Iceland somehow wasn't enough, the three 10-11 stores in central Reykjavík have actually been found to slyly alter their electronic price tags.
They have allegedly silently increased their prices by an average of 8% in the evening and on weekends.
Characterised by a ridiculous volume of frenetic activity and interior design schemes, the bars of Austurstræti stand as a testament to how culturally starved the human being becomes when profit is its only goal.
Firstly, there’s Fram, an 'English' pub, thoroughly flooded with Victorian memorabilia that can only have been randomly herded from eBay.
There’s also the 'American' bar that's just short of a fenced-in a mechanical bull.
The extortioners in Austurstræti will blatantly charge you EUR 10 for a pint without flinching while overwhelming you with folk cover music that is somewhere on the spectrum between painful and unbearable.
Bestowing a bar with authentic character and atmosphere takes time, effort, and dedication.
But when your motive is greed and your recipe is exploitation, you are bound to conjure up a tasteless watering hole that looks like a theme park, sounds like a karaoke party and smells like a McDonalds.
Should you ever be unfortunate enough to find yourself stuck in one of Austurstræti's abandoned movie sets, make sure you drink enough to make memories you won't remember.
Due to the fact that alcohol consumption was prohibited in Iceland for the greater part of the 20th century, the Icelandic drinking culture is still in its infancy.
To this day, Icelanders maintain a strange and premature relationship with alcohol, and alcoholic beverages are exclusively sold in state-run stores called Vínbúðin (The Wine Store).
Supermarket shelves, however, are stocked with various brands of relatively cheap near-beer, a product which aims to replicate the taste of beer while totally eliminating its intoxicating effects.
Since many travellers don't know this, it is relatively common to see foreign visitors victoriously pushing full shopping carts, stuffed with the watered out near-beer, through Icelandic supermarket aisles, oblivious to the true nature of their loot.
The near-beer might keep the party from taking off with a bang, but the upside is that it will never keep you from getting out of bed the following morning.
Easily topping our list of terrible tourist traps in Iceland are the so-called “puffin shops”.
Sadly, these souvenir boutiques, which are exclusively tailored to travellers, have in recent years become one of the capital's most distinguishing features.
They now overshadow and drive out small local businesses, workshops, galleries, music venues and café's that once were the hallmark of central Reykjavík.
Although the puffin shops supposedly sell "authentic" Icelandic souvenirs and memorabilia, most of the so-called "Iceland" branded products found in these shops are in reality mass-produced junk from China.
This is also a common theme for everything from the plastic Viking helmets to the over-priced puffin branded accessories.
While there are countless puffin shops in central Reykjavík, they all depend on the same handful of wholesalers and suppliers.
It’s this monopoly, which undermines any competitive environment, meaning that while the puffin shops may be numerous, they all sell essentially the same crap.
Sadly, the puffin shops make billions upon billions each year and will continue to grow in size and number so long as visitors coming to Iceland remain oblivious to the ploy.
Should you be looking for authentic Icelandic memorabilia, we recommend buying from the Handknitting Association of Iceland, shopping in the gift shop in the National Museum or visiting the Kolaportið flea market which is located downtown by the Reykjavik harbour and is open Saturdays and Sundays from 11 am to 5 pm.
We hope this guide to the top 9 worst tourist traps in Iceland steers you away from some unfair experiences and helps to improve your trip. We’d love to hear from your own experiences of tourist traps in Iceland in the comments below!