Duty free zones are located at Pengkalan Kubor and Rantau Panjang. This is the place to go if you want to shop for cheap imitation T-shirts, souvenirs, pots and pans, etc. Try to go early as it gets hot and stuffy later in the evening. Driving is the easiest way to get to both towns from Kota Bharu although I'm sure taxi and bus services are available. Remember though, this is not the type of duty free zones that you find at airports! Here it's rather like a market. It's an interesting way to immerse yourself in the local style of shopping. Remember, bargain for everything!
When I was last in Pengkalan Kubor, it was possible to take a return boat ride for RM5 to the Thai border town of Tak Bai. There you can get fresh food stuffs and fruits for a good bargain. All this can be done (if you know some locals) without any passports. But with the present political tensions in south Thailand I'm not sure whether such practice is still there. My advice is if you really want to go over to Thailand, use the proper channels.
The best buys are T-shirts and imitation football jerseys (quite good).
Just bargain hard... start somewhere from the middle and bargain upwards! Theme: OtherAddress: Pengkalan Kubor & Rantau PanjangDirections: Drive northwards from Kota Bharu. The road signs will show clearly both towns.