Unused merchandise drawback, under 1313(j), covers imported goods exported or destroyed without being used in the United States, including commercially interchangeable substituted goods. Manufacturing drawback, under 1313(a) and (b), covers imported materials used to make an article that is subsequently exported. Rejected merchandise drawback, under 1313(c), covers goods that do not conform to sample or specification, were shipped without consent, or were found defective, and are returned, destroyed, or re-exported.
For a retailer, the rejected merchandise claim is usually the one that matters. Goods sold at retail and subsequently returned can qualify, but only under qualifying circumstances, and the paperwork has to exist before the export or destruction happens. A return is not automatically a drawback claim. It is a return that might support one, if the conditions are met and the documentation is in place.
The common thread is the connection: every drawback claim has to connect a specific export or destruction back to a specific import, with enough documentation to prove duty was actually paid and the merchandise genuinely left US commerce or was destroyed. The claim is a chain of records, and a broken link is a denied claim.
The first trap is commingled returns. Once a product has been sold at retail and is returned, CBP treats it as merchandise that may have been used for its intended purpose, and its new appearance does not prove otherwise. For importers that restock saleable returns alongside never-sold goods, that treatment can put unused merchandise drawback out of reach, because the returned units and the never-sold units sit in the same inventory and cannot be told apart.
CBP has approved an accounting method answer to this. In HQ H322158, issued 20 March 2026 to Safilo USA, CBP approved the low-to-high blanket accounting method in 19 CFR 190.14(c)(3)(iv), with every returned unit assigned a drawback value of zero, so the never-sold units stay eligible while the returned units are carried at zero. The method works because it distinguishes the two categories without requiring physical segregation. But it has to be set up in advance, with the accounting method documented. It cannot be invented after the export.
The second trap is the notice. Under 19 CFR 190.35, the claimant must file a Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback on CBP Form 7553, at least five working days before the intended exportation, at the port of intended examination. A drawback claim on goods that already left, with no notice filed, is a claim that fails on procedure before it reaches substance.
First, decide whether drawback is worth pursuing at all. The refund is up to 99 percent of the duty paid, but the claim costs time, recordkeeping, and usually a drawback specialist or a broker who handles drawback. On a small volume of low-duty goods, the recovery may not cover the cost of the claim. On high-duty goods, apparel, footwear, electronics, it usually does, and the five-year window means duty paid in earlier years is often still recoverable.
Second, set up the recordkeeping before the next export. The export or destruction has to happen within five years of the date of importation, and the claim itself has to be filed within that same five-year window. The records that connect the export to the import, the entry number, the duty paid, the export documentation, have to exist at the time of export, not reconstructed afterwards.
Third, file the notice, then the claim, and consider the Accelerated Payment Privilege, under which claimants can receive refunds within 30 days of claim submission. The privilege is not automatic, and it requires a bond, but for a business with regular drawback claims it turns a slow refund into working capital. Drawback is a refund, not an exemption, and the duty is paid at import and claimed back afterwards. The businesses that recover it are the ones that treat the paperwork as part of the shipment, not as an afterthought.
Related reading on this site: Which 2025-2026 Duties Drawback Will Never Refund, Section 122: The Tariff That Replaced the IEEPA Duties, and Section 232 Copper: The 50 Percent Tariff and the Annexes That Decide Who Pays It.
Duty drawback is a refund of up to 99 percent of the duties, taxes, and certain fees paid on imported merchandise, when that merchandise is later exported from the United States or destroyed under CBP supervision. It is governed by 19 U.S.C. 1313 and administered by CBP.
The export or destruction must happen within five years of the date of importation, and the claim itself must be filed within that same five-year window. Duty paid in earlier years is often still recoverable if it falls inside the window.
Yes. Section 301 duties are eligible for duty drawback. Section 232 duties on covered steel and aluminum articles are not eligible, and antidumping and countervailing duties also cannot be recovered through drawback.
Under 19 CFR 190.35, the claimant must file a Notice of Intent to Export, Destroy, or Return Merchandise for Purposes of Drawback on CBP Form 7553, at least five working days before the intended exportation, at the port of intended examination. Without it, the claim can fail on procedure.