The Complete Guide to Duty Drawback Claims for Retail & Ecommerce
Discover industry-specific strategies for retail and ecommerce businesses to optimize duty drawback claims and significantly improve your bottom line.
Parker Burr
Duty Drawback Specialist
The Complete Guide to Duty Drawback Claims for Retail & Ecommerce
In today's global marketplace, retail and ecommerce businesses face unique challenges when importing goods, especially the impact of import duties on margins.
This guide outlines everything retail and ecommerce businesses need to know about duty drawback claims, delivering industry-specific strategies to improve financial performance.
What is Duty Drawback?
Duty drawback is a customs program that allows importers to claim refunds on duties, taxes, and fees paid on imported merchandise that is subsequently exported or destroyed.
For retailers and ecommerce brands that import products and ship internationally, it represents a significant cost-recovery opportunity.
Key Eligibility Requirements for Retailers and Ecommerce Businesses
To qualify, your business must meet these requirements:
- 1.Import dutiable merchandise.
- 2.Pay duties, taxes, and fees on that merchandise.
- 3.Export the imported merchandise, export articles manufactured from it, or export commercially interchangeable merchandise.
- 4.Maintain proper documentation linking the imports to exports.
Why Duty Drawback is Particularly Valuable for Retail & Ecommerce
The retail and ecommerce sector can benefit significantly from drawback for several reasons:
1. International Customer Base
Even small retailers often ship globally, meaning duty drawback potential exists wherever international orders flow.
2. High Product Turnover
Large SKU counts and constant inventory turnover create numerous opportunities to claim drawback as products move through the supply chain.
3. Seasonal Inventory Management
Fashion and seasonal businesses frequently export unsold inventory to overseas outlets, turning potential losses into recoverable duties.
4. Returns and Destroyed Merchandise
Products returned by customers that cannot be resold and are destroyed under CBP supervision may qualify, offering relief on otherwise total losses.
Industry-Specific Strategies for Maximizing Drawback Claims
Different retail verticals require tailored tactics; here is just one example of how to adapt drawback to fashion and apparel operations:
For Fashion and Apparel Retailers
Fashion retailers face duty rates between 15–32%, making drawback especially impactful. To maximize benefits:
- •Track country of origin meticulously: Fashion supply chains are complex. Maintain detailed records for fabrics, components, and finished goods.
- •Leverage substitution drawback: Similar items (like size variants) can qualify under substitution provisions.
- •Monitor international returns: High return rates mean more opportunities—document returns thoroughly to claim drawback.
Visit our blog to read the full article and discover more strategies for retail and ecommerce businesses to recover duty payments.
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