Today we are going to discuss rejected drawback opportunities for all our importers. So there are four different types of rejected merchandise that we typically see: 1) rejected merchandise that does not conform to sample or specifications; 2) merchandise that may be the wrong size/dimension; 3) merchandise that may be the wrong color; or 4) merchandise that may be the wrong material type. So, for various reasons, companies have items in their inventory that need to be exported back out of the country because the merchandise is defective or it's been shipped without consent.
We hope you will gain some valuable insight into the world of customs tariffs. With all the supply chain challenges the world is facing, our aim is to maximize your duty drawback dollars and boost your bottom line. We hope you'll subscribe to our podcast to stay current with each new episode in which will unveil numerous ways to improve your international trade profitability. Thanks for listening.
Welcome to The Duty Drawback podcast from International Tariff Management. Here at ITM, we help our clients secure refunds and reductions of duty burdens on imported and exported goods. With more than 40 years of classification, free trade and compliance experience, in each episode, we explore real life examples of how companies are taking full advantage of numerous programs in place for both importers and exporters, and how these little known programs can yield substantial returns to their bottom lines. If you're engaged in international trade, you can expect to learn actionable tips and strategies that you can implement in your business to become a more profitable importer and or exporter. Thanks for tuning in. Now let's dive into this month's episode. Thank you for tuning in with us today. I am Carrie Irwin with International Tariff Management. I am the director of Sales. Our monthly podcasts are really designed for educational purposes and to share state of the industry information. Today we are going to discuss rejected drawback opportunities for all our importers and exporters out there. My guest today is Alan Weinberg, who is a tariff manager with ITM. Alan has been with ITM for six years and works regularly with rejected merchandise and the four different types. Hello Alan, it is so nice to have you with us today. Hi Carrie. It's great to be here. Thank you for having me. So, Alan, we really selected you for this because you are always working with some jewelry companies. Can you tell us more about that? Yes. So we have a lot of clients who are jewelry companies and they import a lot of jewelry. And for various reasons, the items need to be exported out of the country because the merchandise is defective or it's been shipped without consent or it was sold at retail. So there's four different types of rejected merchandise that we see, rejected merchandise that does not conform to sample or specific fashions, and that is the merchandise that may be the wrong size, the wrong color or metal type. There is rejected merchandise that has been shipped without consent of the importer. They may be receiving samples that they weren't aware of, they were getting rejected merchandise that is defective at the time of import. This is items that come in and there they may get damaged during shipping. They're defective, so they have to get exported and then there's merchandise that was ultimately sold at retail jewelry. Clients will typically send their items to retailers. They get sold and then get returned for various reasons. Okay. So this is very different compared to what we discussed last month, which was destruction, where the goods came into the U.S. that duties were paid, but they needed to be destroyed. In the U.S. the goods will not be exported out of the U.S. and they have no commercial value. So with rejected merchandise they do have they're sending them back out maybe to the vendor or somewhere out of the country. Is that fair to say? That's correct. Most of the time these are going back to the vendor that they received them from. Okay. Are any of these used, would you say, more often than others? The most of the rejected merchandise claims that we do were sold at retail. The jewelry clients will import their merchandise, send it to retail, it will get sold. And for various reasons it gets returned back to the retailer and then back to our client. So that's what we see the most in our business here. And I believe you worked with somebody recently, a jewelry client. Can you tell us about that? Yes. So we have jewelry clients who are constantly sending back merchandise sold at retail. And there is a lot of duty that can be recovered. We had one jewelry client who for one quarter this year recovered $72,000. Wow. That's great. Is there a particular timeline to be able to apply for rejected merchandise? There's no timeline to apply for it, but there is a timeline for the import and exports. The exports must be exported within a year of the import date in order to be able to claim on the rejected merchandise. Okay, that's good to know. What do you think the process looks like and what should clients gather or do they need to gather anything for rejected merchandise drawback? So if a client is going to do rejected merchandise regularly, what they should do is fill out or have us put together an application to get privileges to apply for your rejected merchandise. And that would require us to get documents from them to put together a trace which would show the import, the export, the items being going to retail and then coming back from retail. Okay. What about if a client knows this is something they're going to be doing on an ongoing basis? Can you give me an example of that? So they should do an application so that they can get the money. And basically it's the same process as unused merchandise. They would just have to give us their documents when they're ready to file a claim or their data. And we would put the data in to help them get their claim in so they can get their money back. And do they need to apply each and every time? No, just the one time. And we can continue to put the claims in for them. Okay. That sounds great. Well, this has been very informative. Alan, thank you so much for joining me. And I hope our listeners really found some value in the podcast. Like I said before, every situation is unique, so please do not hesitate to contact ITM for a complimentary evaluation. And just to give you a little sneak peek into next month, our discussion, we have a very special guest, Matthew Sawyer, who was a Columbia University professor, as well as NYU. He really focuses in on marketing. He has also become an author of Make It in America, which is a wonderful book that really allows international companies and entrepreneurs how they can enter into the U.S. markets successfully. So we're looking forward to that. Thanks again, Alan. Thank you. We hope you gain some valuable insight into the world of customs tariffs. With all the supply chain challenges the world is facing, our aim is to maximize your duty drawback dollars and boost your bottom line. We hope you'll subscribe to our podcast to stay current with each new episode in which will unveil numerous ways to improve your international trade profitability. Thanks for listening.