Driving from lugano into italy in a rental car

1. check with the rental agency if you are allowed to take their car into Italy. You usually are, but some high end models may not be insured against theft in Italy
2. as you re-enter Switzerland, valuable items you bring with you may be subject to custom duties. Custom inspectors usually target Swiss citizens - I have Swiss friends that have been questioned for importing half a kilo of sliced ham - but in theory everything over the basic allowance could be taxed.
3. the largest outlet for apparel is actually in Mendrisio, Switzerland. Italian apparel outlets are somewhat distant from Switzerland, most shoppers go to Italy for cheaper food.

Also keep in mind that each driver listed on the rental form must have the compulsory International Driver's Permit for driving in Italy, which is used in conjunction with your home D.L. These are easily obtained at any CAA / AAA office for a small fee, and are valid for one year. You'll also have to be extremely vigilant to avoid the dreaded ZTL (limited traffic areas) which exist in many Italian towns and cities (hefty fines!).

I am currently house sitting in the Lugano area. I have driven into Italy several times, heading toward Menaggio and Como. The border crossing is extremely casual. There is a person standing at the border and nodding people through. I have not been stopped or asked for anything and I haven't observed anyone else being stopped.