The Perfume Department is a large mall venue located in the Flying Dutchman's ship. The store contains humans, many of whom attempt to assault SpongeBob and Patrick with various perfumes.
Role in the episode
When Patrick wants to escape the Flying Dutchman's ship, SpongeBob points out that the Perfume Department is the only way out. The store's customers are very hostile, and will go as far as removing unwary travelers' protective equipment to spray them with their noxious gases. SpongeBob and Patrick narrowly manage to survive the onslaught.
SpongeBob states that he "always hated going in there." Given the use of the word "always," it is assumed that SpongeBob has been through a Perfume Department before.
In the audio commentary, it is mentioned that this scene was shot in a Macy's store.
Unlike most locations, the Perfume Department is shot in live action as SpongeBob and Patrick run through it.