Please read: this guide is general information, not legal or customs advice, and rates and examples are illustrative. Drawback claims must be completed within 5 years of the date of importation (19 U.S.C. 1313(r)). Destruction claims require destruction under CBP supervision with advance notice, and DrawbackIQ currently prepares unused-merchandise export claims only. Your licensed customs broker decides what can be filed.
Returned footwear that is destroyed as waste (rather than re-sold or restocked) is eligible for duty drawback under the destroyed merchandise provision of 19 U.S.C. 1313. This is a significant opportunity for retailers, Amazon FBA sellers, and distributors to recover duties on merchandise that costs them money to dispose of.
Destroyed merchandise drawback applies when imported footwear is destroyed as waste after entry into the US. Common scenarios include: (1) retail returns destroyed rather than returned to stock; (2) damaged goods from the supply chain destroyed before resale; (3) end-of-season inventory destroyed; (4) goods damaged in fulfillment centers destroyed by Amazon or 3PLs; and (5) unsellable inventory destroyed for space.
The key requirement is that the merchandise must be physically destroyed (landfilled, incinerated, recycled for waste processing, etc.) and documented as such. Returned or donated merchandise does not qualify unless it is destroyed.
The drawback formula is the same for destroyed merchandise as for exports: you recover 99 percent of eligible duties on the destroyed quantity. If your footwear carries 12 percent average duty and you destroy 5 percent of annual imports, that destroyed volume is refundable at 99 percent.
A retailer imports $2 million in footwear annually at an average 12 percent duty. Eight percent of stock is destroyed annually (returns, damaged goods, end-of-season). Over 5 years, approximately $95,040 in duties on destroyed goods is refundable. This is cash on inventory that was already lost.
Your customs broker will need: (1) entry records from CBP; (2) invoices or shipping records showing receipt of the merchandise; (3) destruction records (certificates from waste processors, landfill receipts, 3PL destruction reports, etc.); and (4) matching of destroyed inventory to original import entries by SKU or HTS code.
Amazon FBA sellers can obtain destruction records by requesting waste reports from their fulfillment centers. Retailers and 3PLs typically have waste contracts with destruction companies that provide documentation. This documentation exists in your supply chain; we help organize it into a claim.
Amazon will provide destruction records if you request them in your seller account. 3PLs typically issue destruction certificates. These records connect destroyed inventory to your import entry numbers, which is what CBP requires to issue a refund.
Destroyed merchandise from the past five years is refundable. This includes returns from high-season years, clearance sales, and supply chain damage. The refund clock starts from the date the merchandise was entered into the US, not destroyed.
Estimate your refund on destroyed footwear.
Free EstimatorDrawbackIQ prepares claim packages for a licensed customs broker to file. DrawbackIQ is not a customs broker. This page is informational only.