Since de minimis ended, every parcel entering the United States carries duty. Most sellers have spent the last year rebuilding pricing, checkout and customs data around that reality. Far fewer have looked at the other side of the ledger: getting some of that money back.

Duty drawback is a US Customs and Border Protection program that refunds up to 99% of import duties, tariffs and certain fees when goods are later exported or destroyed. It has existed since 1789. It is not a loophole, not an amnesty program and not aggressive tax planning — it's a standing statutory refund most ecommerce brands simply never file.

Here's how it works, what qualifies, and the math on whether it's worth your time.

Why this matters more in 2026 than ever before

Before the de minimis suspension, low-value parcels entered duty-free. There was nothing to reclaim. That changed completely.

Three things now stack in favor of filing:

• Every unit carries duty. Your duty base — the pool of money eligible for refund — is dramatically larger than it was two years ago.
• Tariff rates are higher. Section 301 China tariffs, reciprocal tariffs and base MFN duty are all generally eligible for drawback.
• Returns are now a duty event. When a US customer returns an imported item and you send it back out of the country, you paid duty on a unit that never stayed. Drawback is the mechanism that recognizes that.

That third point is the one that reframes returns strategy entirely. A 19% return rate used to be a logistics cost. Now it's a logistics cost plus a duty leak — unless you're reclaiming.

The type that fits ecommerce: unused merchandise drawback

There are several drawback categories. The one that matters for most online sellers is unused merchandise drawback, under 19 USC 1313(j).

It covers finished goods that were imported into the US and later exported — or destroyed under CBP supervision — without being used or substantially altered.

Critically, CBP explicitly permits certain operations without breaking eligibility:

• Testing and inspection
• Repackaging
• Relabeling and marking
• Sorting and storage

In other words, a returned item that you inspected, repackaged and shipped to a customer in Canada still qualifies. So does inventory you imported, never sold, and re-exported to a European warehouse.

Four scenarios that qualify

The dividing line is always the same: did the goods leave the US, or get destroyed, without being used? If yes, and you can prove it, there's a claim.

The math: is it worth filing?

Run the calculation on your own numbers. The formula is straightforward:

Annual import value × effective duty rate × export or re-export rate × 99% = annual recoverable duty

Worked example for a mid-market brand:

Then apply the part most sellers miss.

The five-year retroactive window

Drawback claims are not limited to this year's activity. You can generally file against exports tied to imports going back five years from the original import date.

For the brand above, that turns a $31,700 annual figure into a cumulative recovery well over $150,000 on the first filing — money already paid, already recorded, sitting unclaimed.

The window also means the cost of waiting is real. Every quarter you delay, the oldest quarter of eligible duty rolls out of range permanently.

Duty rates, eligibility and filing rules vary by product, country of origin and tariff program. Figures here are illustrative — confirm your position with a licensed customs broker or trade counsel.

What CBP actually requires

Drawback is a documentation exercise. The refund is generous because the proof burden is strict. You need to match specific exports back to specific imports.

Practically, that means maintaining:

• Import records — entry summaries (CBP Form 7501), commercial invoices, duty paid per line
• Export evidence — bills of lading, air waybills, proof of export filings
• Inventory traceability — the link from an imported lot or SKU to the specific units that left
• Proof of non-use — records showing the goods weren't used or altered beyond permitted operations

This is where most ecommerce operations struggle, and it's rarely a customs problem — it's a data problem. If your 3PL can't tell you which import lot a returned unit came from, you can't substantiate the claim.

How to get started

1. Size the opportunity first. Pull your last five years of import value and duty paid, and your export and re-export volume. If the recoverable pool is under a few thousand dollars a year, the filing cost may not justify it.
2. Apply for drawback privileges. This is a formal application to CBP, and approval typically takes four to twelve months. Start it before you need it.
3. Fix your traceability now. Work with your 3PL to tag inbound lots and carry that identifier through to outbound records. This is the highest-value preparation step.
4. Hire a specialist. Drawback filing is a niche within customs brokerage. Most providers work on contingency, taking a percentage of recovered duty, which aligns incentives and removes upfront risk.
5. File the retroactive claim. Once privileges are granted, the backward-looking claim is usually the largest single recovery you'll see.

Rethinking returns in a post-de-minimis world

The strategic consequence is bigger than the refund itself. International returns have looked increasingly unprofitable since duty applied to everything — and many brands responded by restricting or discouraging them.

Drawback changes that calculus. If a re-exported return recovers 99% of its duty, the true cost of accepting that return drops sharply. Brands that build the record-keeping to support drawback can keep generous return policies as a competitive advantage while competitors quietly tighten theirs.

It is one of the few places in cross-border ecommerce right now where better operational data converts directly into recovered cash.

At HereWeShip, we help ecommerce sellers manage cross-border shipping, customs documentation and the record trail that makes claims like this possible. Talk to us about your international shipping and returns setup.