Duty Drawback for E-Commerce Brands: Refunds on Cross-Border Orders

A U.S. e-commerce brand that imports inventory and ships orders to customers in other countries is exporting, even when each order is a single parcel. Those exports can earn back up to 99% of the import duty paid on the goods through unused merchandise drawback. Cross-border orders are one of the most overlooked sources of drawback, and with Section 301 and other tariffs on imported goods, the duty at stake has grown fast.

Why e-commerce orders qualify

Unused merchandise drawback, 19 U.S.C. 1313(j), applies to imported goods that leave the country unused. A pair of shoes imported into a U.S. warehouse and shipped to a customer in Canada is exactly that. Substitution means the exported pair does not have to be traced to a specific import, as long as the imported and exported goods share an 8-digit HTS number.

What makes it hard

• Volume: Thousands of foreign orders a year, each one a separate export to match.
• Proof of export: Parcel shipments are proven with carrier records rather than ocean bills of lading.
• Order data: Order systems record SKUs and addresses, and those have to be mapped to HTS numbers and import entries.
• Returns: Orders returned from abroad have to be netted out.

The data you need

• Import data from ACE: entry lines, HTS numbers, quantities and duty.
• Order data from your commerce platform: order, SKU, quantity, ship date and destination country.
• Carrier data: Tracking and delivery records for each foreign parcel.
• A SKU to HTS map so each export can be matched to imports.

Frequently asked questions

Do orders to Canada and Mexico count? Yes, they are exports. USMCA rules can affect some cases, so each destination is checked.

Is it worth it if foreign orders are a small share of sales? Often yes, because the claim reaches back five years of imports.

Do I need to file a notice before each parcel ships? Not with a waiver of prior notice, which most e-commerce claimants obtain.

How Caspian handles e-commerce drawback

Caspian connects your order and carrier data to your ACE history and matches every foreign order. Cuyana matched more than 8,500 export shipments this way. See the Cuyana case study or our substitution drawback guide.

Works Cited:

• 19 U.S.C. 1313, Drawback and refunds
• 19 CFR Part 190, Modernized drawback