Duty drawback is a refund program that lets you recover up to 99% of duties paid on goods that were imported into the US and later exported or destroyed. The five-year lookback means you're not just looking at future savings - you're potentially sitting on a significant refund right now, on duties you've already paid.
The reason most brands have never touched it: traditional brokers have claim minimums of $500K and built their operations around large manufacturers, not ecommerce brands shipping out of a 3PL.
So the opportunity sits there unclaimed while operators raise prices and cut SKUs to manage tariff costs instead.
That's changed.
A new category of drawback platforms built specifically for ecommerce has dropped the minimum to ~$10K, and CBP confirmed in April 2025 that the new reciprocal tariffs are drawback eligible. If you're sourcing from Asia and fulfilling any international orders, the math is worth running.
This piece gives you a four-question filter to find out if you qualify, and the back-of-napkin math to estimate how much you're looking at.
I spoke with Parker Burr, founder of Evana, to get a deeper practitioner insight on the topic.
Evana is a drawback platform built specifically for ecommerce brands, and Parker has processed claims across a wide range of Shopify and DTC operators. The framework and math in this article come directly from our conversation.
Table of Contents
What Drawback Actually Is
The Four-Question Filter
The Back-of-Napkin Math
What Disqualifies You
What to Do if the Math Works
1. What Drawback Actually Is
Duty drawback is a refund program administered by U.S. Customs and Border Protection. If you paid duties on goods coming into the US and those goods later left the country, through an international sale, a cross-border return, or destruction, you're entitled to get most of that money back. Up to 99% of duties paid, going back five years from the original import date.
The program has existed since 1789, but two things make it more relevant for ecommerce operators right now.
First, duty rates are higher than they've been in decades. Section 301 tariffs on Chinese goods have been in effect for years, and CBP confirmed in April 2025 that the new reciprocal tariffs are also drawback eligible. If you've been importing from China and fulfilling international orders out of US inventory, the refund potential is larger than it was a year ago.
Second, the infrastructure has modernized. For most of the program's history, drawback was reserved for large manufacturers with dedicated trade compliance teams and claim volumes large enough to justify the administrative burden. That's no longer the case.
The three types of drawback
It helps to understand which version applies to your business before running the math:
Unused merchandise drawback: Goods came in, duties were paid, goods went out in the same condition. This is the most common scenario for ecommerce brands fulfilling international orders out of US warehouses.
Manufacturing drawback: Imported materials are used to produce a finished good that's then exported. Less common for pure-play ecommerce, more relevant for brands with any domestic production.
Destruction drawback: Goods are destroyed under customs supervision rather than exported. Relevant if you have regular volumes of expired, damaged, or obsolete inventory you're disposing of.
For most brands reading this, unused merchandise drawback is the primary opportunity. Destruction drawback is worth knowing about if you operate in categories with expiry dates, like supplements or cosmetics, because the paperwork has to be filed before disposal.
What stays consistent across all three: the goods have to leave the US, or be destroyed under proper customs supervision. Drawback is not a discount on your import costs. It's a refund on duties paid for product that was never consumed by a US customer. Everything else in this article flows from that.
2. The Four-Question Filter
Run through these in order. One "no" doesn't automatically disqualify you, but two or more usually does. The goal is to spend five minutes here before spending any time on the math.
Question 1: Annual duty spend above $10K?
Drawback is only worth pursuing if the duties you've paid are significant enough to justify the process. Parker thinks about this in terms of three variables:
Where is your product coming from, and what's the duty rate?
What are your COGS?
What volume are you moving?
A low duty rate on high-volume, low-cost goods can still produce a meaningful claim. So can a high duty rate on low-volume, high-value goods. Jewelry is a good example of the latter. Supplements and apparel sourced from China or India, with current tariff rates, are good examples of the former.
The rough threshold Parker uses: if your annual duty spend is above $10,000, it's worth running the full estimate. Below that, the administrative effort may not justify it unless you're growing fast and want to set up the program for future years.
Question 2: Did goods enter the US under your company name?
This is the question most operators can't answer immediately, and it matters more than almost anything else in this process. If you're the importer of record (IOR), you're the entity that legally brought the goods into the US and paid the duties. That makes filing straightforward. If you're not, there are extra steps, and in some cases the claim becomes significantly more complicated.
The fastest way to check: go to importyeti.com and search your company name. If there's a history of shipments coming in under your company's name, you're likely the IOR. If nothing comes up, or if you see your 3PL or a factory name instead, you have some digging to do.
Parker flags this as one of the most common surprises: "Very new brands just don't know. Brands that have been around for 10, 15 years have had employee turnover. Three employees ago someone made some agreement. They don't know what actually happened."
Not being the IOR isn't a dead end, but it does add friction. Factor that in before going further.
Question 3: Do goods leave the US or get destroyed?
This is where most ecommerce brands have more eligibility than they realize. The qualifying events are broader than operators typically assume:
International orders shipped from US warehouse inventory
Cross-border returns from international customers
Inventory transferred to overseas warehouses
Damaged or defective goods destroyed under customs supervision
Expired product disposed of before reaching a US consumer
Those last two are worth pausing on. If your brand operates in a category with expiration dates, like supplements, cosmetics, or food, you may have a destruction drawback opportunity every time you dispose of aging inventory. The catch is that the paperwork has to be filed before you throw anything out. Once it's gone, that eligibility is gone too.
A useful benchmark: Parker sees roughly 10% of revenue going to international customers for a typical Shopify brand. If you're above that, your export-based eligibility is likely higher than average.
One important caveat here: if returned inventory is being restocked into your general fulfillment pool rather than physically segregated, it may disqualify your drawback eligibility on those SKUs entirely. More on this in Section 4.
Question 4: Are your imports fully above board?
Drawback requires a clean import history. If your goods have been coming in with accurate classification, correct declared values, and proper documentation, you're in good shape. If there are compliance issues on the import side, drawback won't help and could create additional exposure.
Parker is direct about this: "If you're doing sketchy things on the way in, there's nothing we can do."
The specific things that disqualify you:
Goods declared at understated values at the border
Misclassified HTS codes, whether intentional or not
Trans-shipping arrangements where country of origin has been obscured
Supplier-as-IOR setups where the declared value is being managed by someone else
If any of those apply, the right conversation is with a trade compliance attorney, not a drawback provider.
Where you stand after the filter
If you got through all four questions with mostly yes answers, the next step is running the math. If you got stuck on Question 2 or 4, you have some groundwork to do first. Either way, you now know which problem you're actually solving.
3. The Back-of-Napkin Math
If you passed the filter, the next step is getting a rough number. Not a precise claim amount, that requires connecting your actual import data, but enough to know whether this is a $20,000 conversation or a $200,000 one.
Parker walks every new brand through the same calculation. Here's the formula:
Annual revenue * % international sales = international revenue
International revenue * COGS % = COGS on exported goods
COGS on exported goods × duty rate = annual eligible duties
Annual eligible duties × 5 years = estimated claim
The five-year multiplier often surprises operators.
Drawback eligibility goes back five years from the date of importation, which means you're not just estimating what you can recover going forward. You're potentially sitting on several years of unclaimed refunds right now. The longer you've been importing and selling internationally, the larger that number gets.
A worked example
Parker runs through this with a $10M brand:
$10M in annual revenue
10% goes to international customers = $1M in international sales
COGS on that $1M is roughly $200K
Duty rate is 10%
That's $20K in eligible duties per year
Times five years: $100K claim
A $100K claim on a $10M brand is meaningful. And that example uses a 10% duty rate, which is conservative given current tariff rates on Chinese goods.
If you're sourcing from China at current reciprocal tariff levels, your effective rate could be significantly higher, and the same math produces a proportionally larger number.
It's also worth noting that the 10% international revenue figure is Parker's baseline for a typical Shopify brand. If you're actively selling into Canada, the EU, the UK, or Australia, your percentage may be higher. Run the math with your actual number, not the benchmark.
What moves the number up
Higher duty rate. If you're sourcing from China, your effective rate on many product categories is well above 10% when you factor in Section 301 tariffs and the new reciprocal tariffs. The same formula on a 25% or 30% rate produces a claim two to three times larger than the example above.
Higher international volume. The more of your revenue going to customers outside the US, the larger your pool of eligible exports. Brands with active international storefronts or distribution into key markets will see this number move quickly.
Higher value goods. Brands with high COGS relative to revenue have more duty exposure per unit. Jewelry is the clearest example Parker points to, but premium apparel, electronics, and skincare all follow the same logic.
What drags it down
Low duty rate. If your goods are coming in at 2% to 3%, you need very high volume or very high COGS to produce a claim worth the administrative effort. The math still works, it just takes longer to add up.
Minimal international sales. If you're almost entirely domestic, your unused merchandise drawback opportunity is limited. Destruction drawback may still apply if you're regularly disposing of expired or damaged inventory, but the claim will be smaller.
Short import history. The five-year lookback only helps you if you've been importing for five years. Newer brands are working with a shorter window, which compresses the total claim size even if the annual eligible duties are meaningful.
Don't forget destruction
Most operators focus entirely on international sales when they think about drawback. But if your brand sells in categories with expiration dates, supplements, cosmetics, food, the destruction side of the ledger can add meaningfully to your total claim. Every time you dispose of expired or damaged inventory without filing the right paperwork first, you're leaving that refund on the table permanently. Parker's rule: before you throw anything out, make a call.
Run it yourself
Evana has an estimator at evana.app/estimate that lets you plug in your own numbers. It won't give you a verified claim amount, but it will get you to an order of magnitude quickly.
The estimate gets more precise when you factor in which specific products were exported, which import entries they're matched to, and what your actual duty rates were across different SKUs and shipments. That's the reconciliation work a platform or broker handles. The back-of-napkin math is a starting point, not a filing.
4. What Disqualifies You
Passing the filter doesn't mean every dollar of duties you've ever paid is recoverable. There are specific situations that reduce your eligibility or eliminate it entirely. Some are obvious. A few will catch you off guard.
Returns - the disqualifier brands often miss
This is the one Parker flags as the most widespread issue in ecomm drawback, and it's almost never talked about.
Drawback only applies to unused merchandise. That sounds straightforward until you factor in how most ecomm brands handle returns.
When a customer returns a product - even unopened, even still sealed - and your warehouse restocks it under the same SKU without physically segregating it from your core inventory, you have technically tainted your drawback eligibility for that entire SKU. Not just that unit.
The entire SKU.
Parker is direct about the scale of this problem: "Probably nine out of ten people in ecommerce are ineligible for drawback based on their returns handling."
The logic goes back to how CBP defines unused merchandise. The moment a returned item mixes back into your general inventory pool, customs considers the entire lot potentially used. There's no clean way to prove which specific units were exported versus which ones passed through a customer's hands.
The fix going forward is straightforward in principle: returned inventory has to be physically segregated from your core stock, tracked separately, and kept out of your general fulfillment pool.
In practice, most 3PLs don't do this by default. It requires an explicit operational decision and a process change.
If your returns are currently going back into general inventory, this is the first conversation to have with a drawback provider before running any other math. It determines whether you have any eligibility at all.
Goods consumed by US customers
The foundational rule: drawback is a refund on duties paid for product that never reached a US consumer. The moment a US customer receives that product, the duty was owed and there's nothing to recover.
Simple in principle, but precision matters here. Eligibility is tied to what happened to each specific shipment, not your overall import volume. A brand doing $200M domestically and $20M internationally doesn't get to claim drawback on the whole $220M worth of imports. Just the portion that left the country.
Goods still in your warehouse
Not yet eligible. You can't claim drawback on inventory that's sitting in your 3PL waiting to be sold. If that product eventually gets exported or destroyed, the eligibility exists at that point. But you can't file until it does.
This matters for how you think about timing. Your claim isn't just a snapshot of today. It's a running tally that grows as eligible events happen.
De minimis shipments
If your international orders were historically fulfilled under the $800 de minimis threshold, those shipments weren't tracked for export compliance and don't qualify. The export records CBP requires simply don't exist for those transactions. For brands that relied heavily on de minimis to ship internationally before the recent policy changes, this compresses the lookback window considerably.
Compliance problems on the way in
This is the most consequential disqualifier, and the one operators are least likely to catch themselves. Drawback requires a clean import history. If there are issues on the import side, drawback won't fix them. It will surface them.
The situations that rule you out:
Goods declared at understated values at the border
Misclassified HTS codes, whether intentional or not
Trans-shipping arrangements where country of origin has been obscured
Supplier-as-IOR setups where the factory or a third party is managing declared values
Parker is direct about this: "If you're doing sketchy things on the way in, there's nothing we can do." If any of these apply, the right conversation is with a trade compliance attorney, not a drawback provider.
Expired inventory you've already disposed of
This one is entirely avoidable going forward.
If you operate in a category with expiration dates and you've been disposing of aged inventory without filing the right paperwork first, that eligibility is permanently gone. You can't retroactively claim drawback on product that was destroyed without proper customs supervision.
The fix going forward is straightforward: before anything gets disposed of, the paperwork gets filed. But past disposals without documentation are unrecoverable. If you have a regular cadence of inventory destruction, this process needs to be built into your ops now.
A practical note
Most brands will have some disqualifiers in the mix.
That doesn't mean the total claim goes to zero. It means the actual eligible amount is a subset of what your back-of-napkin math produces. A good drawback provider will run through your import history and tell you what's clean and what isn't before filing anything. You don't need to sort that out yourself upfront. But knowing where the gaps are before you start the conversation will save you time.
5. What to Do if the Math Works
You've run the filter. You've done the math. The number is meaningful. Here's what actually happens next, in the order it needs to happen.
File for privileges now, before anything else
In the US, you can't file a drawback claim until CBP has granted you privileges. This is a one-time application that authorizes you to participate in the program and puts you on accelerated payment status, so refunds come through weeks after filing rather than months.
The catch is the timeline. Approval takes anywhere from three weeks to six months depending on CBP's workload, and that window is entirely outside your control. Which means the single most important thing you can do right now, regardless of where you are in the evaluation process, is get the application in. Every month you wait is a month of future eligibility you're deferring, and potentially another month of the five-year lookback window closing on older imports.
Traditional brokers charge $2,500 to $4,500 for this application. Platforms like Evana and Caspian file it for free as part of onboarding.
One note for Canadian brands: there's no privileges application required in Canada. You go straight to filing a claim, which makes the timeline considerably shorter.
Understand the realistic timeline
This is where expectations need to be set carefully, because the numbers vary depending on who you talk to.
Tom Taggart at Passport puts the realistic end-to-end timeline at 14 to 16 months from starting the process to receiving a first check. That accounts for the privileges application, data gathering, claim preparation, and payment processing.
Parker's experience at Evana skews shorter once privileges are in place. With accelerated payment status, the gap between filing a claim and receiving payment is a matter of weeks. The bottleneck is always the setup phase, not the filing itself. So the earlier you start, the sooner that bottleneck is behind you.
DIY or outsource?
Drawback is, at its core, a reconciliation problem. You're matching import entries to export records, calculating duties paid, and building a documentation package that satisfies CBP. The data exists in your systems. The question is whether your team has the process expertise to structure it correctly.
Adam Reisfield at Parabola, whose team has worked with drawback operations using workflow automation, frames it clearly: if you can't draw your exact drawback process on a whiteboard before you start, you're going to spin your wheels. The technology to automate the reconciliation exists. The blocker is almost always process knowledge, not tooling.
For most brands, that points toward working with a specialist, at least for the first claim. Once the process is mapped and the data connections are established, ongoing claims become significantly more manageable.
Choosing who to work with
The market has changed considerably in the last few years. Your options fall into two broad categories.
Traditional brokers have been doing drawback for decades, primarily for large manufacturers. The economics of their model require scale: minimum claim thresholds typically start at $500K per year, and their operations don't lend themselves to the data complexity of ecommerce. For brands with claim sizes below that threshold, they're largely inaccessible.
Platforms like Evana and Caspian were built specifically for DTC and Shopify-ecosystem brands. A few things that distinguish them:
Minimum claims as low as $10K
Contingency-based pricing, meaning no upfront cost and no payment unless a refund is successfully recovered
Native integrations with Shopify, WMS platforms, and ecommerce tooling
Automated data reconciliation that handles the volume and SKU complexity typical of ecommerce operations
On contingency pricing: the provider takes a percentage of whatever they recover, and that percentage scales with claim size. On a $10K claim, the cut is larger proportionally than on a $200K claim. Either way, the financial risk sits entirely with the provider. If they don't recover anything, you pay nothing.
The data you'll need
Most of the data work is handled by the platform once you've made a few key connections. Parker says three out of four data sources connect once and never need to be touched again:
Your Shopify or ecommerce platform
Your WMS or 3PL system
Import documentation, typically PDFs uploaded during onboarding
The fourth connection is the ACE Portal, CBP's system where all your import entries are stored. Access is typically held by whoever set up your original customs arrangements, usually your COO, CFO, or a founder. Tracking down that access and granting it to your drawback provider is often the first concrete step in getting the program live. It's a one-time action.
The steps, in order
Once you've decided to move forward, the process looks like this:
Confirm you're the importer of record. Go to importyeti.com and search your company name. If shipments are coming in under your name, you're the IOR. If not, identify who is before going further.
Get the privileges application filed. Do this immediately, even if you haven't chosen a provider yet. The clock starts when CBP receives the application, not when you decide you're ready. If you're working with Evana or Caspian, they handle this at no cost.
Track down ACE Portal access. Find out who at your company has credentials for CBP's ACE Portal and loop that person into the process early. This is the one data connection that requires a human decision inside your organization.
Connect your data sources. Your drawback provider will walk you through connecting Shopify, your WMS, and any relevant import documentation. For most platforms this takes hours, not days.
Run a formal eligibility assessment. Most providers do this at no cost. They'll pull your import history, identify which entries are clean and eligible, and give you a verified estimate more precise than the back-of-napkin math in Section 3. This is where the rough number becomes a real number.
Let the platform handle reconciliation and filing. Once the data is connected and privileges are approved, claims are generated, reviewed, and submitted on your behalf. You're notified when payment is issued.
The assessment costs nothing. The privileges application costs nothing if you use the right provider. And the five-year lookback means the refund you may be sitting on has been accumulating for years. The only decision that doesn't make sense is waiting.
