Unlocking operational savings with Duty Drawback

One of the key aspects of handling international orders is understanding the duty drawback system—a powerful tool that allows merchants to recover customs duties on imported goods that are later exported. Selling cross-border, taking advantage of duty drawback can be a game-changer, helping to recover significant operating capital that can be reinvested into growth.

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What is Duty Drawback? 

The refund of certain duties, internal revenue taxes and certain fees collected upon the importation of goods and refunded when the merchandise is exported or destroyed. 

This means any duty, tax, or eligible fee (including merchandise processing fee) paid by reason of importation on merchandise that is not used prior to exportation or destruction is recoverable as a drawback. 

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How does it work? 

​​For merchants, making the most of duty drawbacks really hinges on the data gathered. It’s crucial for both freight forwarders and fulfilment providers to keep track of inventory and SKUs (or sometimes just barcodes) so that everything lines up correctly, allowing the maximum refund.

The U.S. duty drawback program lets merchants reclaim 99% of the duties and taxes they’ve already paid. Whenever shipping goods or not, there are duties and taxes involved, accurately matching imported versus exported inventory makes for  claims that get back 99% of what was originally paid.

This program was originally designed for manufacturers who import parts, assemble them, and then re-export the final products. Now, it’s also applicable to the ecommerce industry, especially for retailers and marketplaces that are reselling items.

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Switch your operations to Swap 

Swap takes care of global tax filing and duty drawbacks, handling country-specific tax and VAT requirements for all your international shipments. Merchants end up saving hundreds of thousands every year thanks to the software's ability to automatically file for duty drawbacks on return shipments using global tax IDs.