Boots is to stop asking customers at airports to show their boarding passes when making purchases amid continuing controversy over the practice.
The pharmacy chain is one of a number of stores at the centre of the row amid claims some retailers are using tax relief to boost their profits.
The Treasury has urged shops to cut their airport prices to reflect VAT discounts they receive for travellers leaving Europe .
Minister David Gauke stressed that the savings shops made through the VAT discounts were supposed to be passed on to customers.
He spoke after the Independent revealed many airport stores were asking passengers to present their boarding cards when making a purchase.
The information on the cards is then used to claim VAT relief on sales to travellers leaving the European Union, meaning the stores do not pay 20% VAT on those goods.
The newspaper claimed stores such as Boots and WH Smith did not pass on the savings.
Mr Gauke said: "The VAT relief at airports is intended to reduce prices for travellers, not as a windfall gain for shops.
"While many retailers do pass this saving on to customers, it is disappointing that some are choosing not to. We urge all airside retailers to use this relief for the benefit of their customers."
His comments come at a time when many Britons leaving the country for summer holidays may be susceptible to the practice.
It is not a legal requirement for passengers to show their boarding cards when buying supposedly duty free goods and many are now reportedly refusing to show them.
Hours after the Treasury's advice, some travellers were still being misled by Boots staff who claimed boarding passes had to be shown for "security reasons".
One passenger travelling to Naples, Italy, from Stansted Airport was asked to present his boarding pass when making a purchase in departures.
When challenged, the member of staff insisted that it was a security requirement.
After being pushed further and told that it was actually a VAT issue, the employee conceded the point and allowed the purchase to proceed without the presentation of a pass.
A Boots UK spokeswoman said tonight: "At Boots UK, we want to make shopping in our airport stores a truly convenient experience. It has never been compulsory for customers to present their boarding passes in order to be served in Boots airport stores. We are not a duty free retailer and many items available in Boots are subject to zero or a reduced rate of VAT.
"At Boots we always listen to our customers and to help remove any confusion at this time, we have taken the decision to no longer ask customers to show us their boarding passes while we undertake a longer term review of this situation. We are currently in the process of notifying our airport store colleagues of this change.
"Rather than offering different price points to some customers travelling outside the EU, we want all customers to benefit from consistently low prices. In fact, over the past few years we have invested in lowering prices in our airport stores, despite operating costs at airports being higher than in other locations. We already offer the lowest prices of any retailer on many items sold airside."
A spokesman for Dixons Travel said: "At Dixons Travel we do ask customers to show their boarding pass when making a purchase, but this is only on request and is not mandatory.
"We have re-issued existing guidance to all our colleagues confirming this as our clear process."