The perfume department is a store in a large mall venue which is a portal to another dimension located in the Flying Dutchman's ship. The store contains humans that are perfume workers, many of whom attempt to assault SpongeBob and Patrick by spraying them in the faces with various perfumes.
Role in episode
When Patrick wants to escape the Flying Dutchman's ship, SpongeBob points out that the perfume department is the only way out. The perfume employee workers are very hostile, and they go as far as removing unwary travelers' protective equipment to spray them with their perfumes. SpongeBob and Patrick narrowly manage to survive the onslaught.
In the "Shanghaied" audio commentary, it is revealed that the perfume department was filmed at the Macy's of Burbank Mall in California due to it being close to the Nickelodeon Animation Studio, which is also in Burbank. Macy's West is given a special thanks in the closing credits along with Nickelodeon's The Amanda Show.