Rejected merchandise drawback under 19 U.S.C. § 1313(c) recovers up to 99% of duty on goods that were imported, paid duty, and found to be defective, not as ordered, or non-conforming to sample. Goods must be either exported or destroyed under CBP supervision within 5 years.
This guide covers Rejected Merchandise Drawback Guide. Duty drawback recovers up to 99% of duty on imported goods that are subsequently exported, destroyed, or used to manufacture exported goods.
For SMB importers, the practical implementation depends on volume, sector, and specific operational structure.
Eligibility – three rejection categories
Defective in workmanship or materials. Not as ordered (different from purchase order specifications). Non-conforming to sample provided.
Documentation requirements
Import documentation, evidence of rejection (inspection reports, supplier correspondence), proof of export or CBP-supervised destruction.
Distinction from unused merchandise drawback
Unused: goods are not defective; just not used. Rejected: goods are defective or non-conforming. Documentation differs.
CBP-supervised destruction
Where export is not feasible, CBP-supervised destruction at a CBP-approved facility supports drawback.
Frequently asked questions
When is this most relevant?
For SMB importers with active duty exposure or those evaluating duty mitigation options.
What documentation is required?
Varies by topic. Core: CBP Form 7501, supplier certificates, BOM analysis, manufacturing process documentation.
How long does this take to implement?
Simple cases 2-4 weeks; complex setups 8-16 weeks. Some moves require binding rulings adding 30-90 days.
What does this cost?
Project scope: $5,000-$25,000 for most engagements. Ongoing retainer for active operations.
How do I begin?
Book a 15-minute scoping call. We confirm fit and scope before any engagement.
Get started
Run a drawback opportunity audit on your import-export profile. Fixed-fee or contingency.