Unused merchandise drawback refunds up to 99 percent of the duties, taxes, and fees paid on the imported goods. The one percent is CBP's retention, and it is the only haircut. The refund covers the duty, the merchandise processing fee, and the harbor maintenance fee, which means the whole stack of import charges comes back except for that one percent.
The goods have to be unused, which means they cannot have been used in the United States before they leave. A product that was sold, worn, installed, or consumed does not qualify. A product that sat in a warehouse, was returned, and shipped back out does. The test is the condition of the goods, and the condition has to be the same as when they arrived.
The common case is the return. A brand imports a container, sells most of it, and takes back the rest. The returned goods go back to the supplier, or to another market, or to destruction, and every one of those movements is a claim. A brand with a five percent return rate on a million dollars of imports has fifty thousand dollars of goods moving back out, and the duty on them is recoverable.
The reason brands miss it is ownership. The import team files the entry. The returns team processes the return. Nobody connects the two, and the claim dies in the gap. The fix is a single line in the returns process: when a return is approved for export or destruction, the drawback file opens. The claim is not hard. The handoff is what is missing.
Section 301 duties are recoverable under drawback, which matters more every year as the 301 layers grow. Section 232 duties and antidumping and countervailing duties are not, and a claim that includes them will be rejected. The duty types have to be split before filing, because CBP does not split them for you.
The other exclusion is use. A product that was used, even briefly, does not qualify for unused merchandise drawback. It may qualify for manufacturing drawback, which is a different claim with different rules, but the unused claim is closed. A brand that tests a returned product before shipping it back has used it, and the distinction is worth knowing before the test, not after.
Claims can be filed for exports up to five years back, which means a brand that has never filed drawback has five years of refunds waiting. The records have to exist, and that is the real constraint: entry summaries, proof of export, and the link between the import and the export, all going back five years. Reconstructing that from scratch is the work, and it is the reason most brands file one year and stop.
The program itself dates to 1789, which makes it one of the oldest trade programs in the country, and it has survived because it is simple: the goods came in, the duty was paid, the goods left unused, and the duty comes back. The complexity is all in the records, and the records are the job.
Keep reading: Drawback Claims: Recovering Duty on Re-Exported Goods, FTZ vs Bonded Warehouse: Which Defers Duty Better, How does the five year filing window work for duty drawback claims?.
It is a refund of up to 99 percent of the duties, taxes, and fees paid on imported goods that are exported or destroyed without being used. The goods have to leave in the same condition they arrived in. The program dates to 1789.
Claims can be filed for exports up to five years back. The records have to exist: entry summaries, proof of export, and the link between the import and the export. A brand that has never filed may have five years of refunds waiting, if the records support them.
Yes. Section 301 duties are recoverable. Section 232 duties and antidumping or countervailing duties are not. The duty types must be split correctly before filing, or the claim will be rejected.
CBP retains one percent of the duties, taxes, and fees. The refund is 99 percent, not 100. The retention applies to the whole stack: the duty, the merchandise processing fee, and the harbor maintenance fee.