CASE STUDY

Transitioning a 1313J1 E-commerce Drawback Program

A global provider of modular power components and complete power systems increases past and future refunds.

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Challenge

The client faced a unique duty drawback challenge due to their business model. Their e-commerce imports into the US went directly to end customers, who often purchased multiple sizes of luxury apparel and returned the items that did not fit. Upon reviewing their current process, J.M. Rodgers (JMR) concluded that the existing drawback provider’s process was preventing the client from claiming their full refund potential.

Solution

JMR’s drawback team devised a tailored solution for this client. 

  1. Accounting Method Adjustment: The team first identified that changing the accounting method was crucial to maximizing the refund potential.
  2. Data Source Integration: Multiple data sources, including entries where the client was not the Importer of Record (IOR), were considered to ensure comprehensive coverage.
  3. Custom Data Feeds: The drawback IT department manually created compatible data feeds to enhance the program’s efficiency.

Results and Benefits

The implementation of this solution allowed JMR to file drawback claims in a compliant manner. 

  • Previous Performance: The prior provider managed to recover just over $1 million in refunds in the last refund year.
  • JMR’s Achievement: Over a three-year clean-up period, JMR recovered over $15 million in refunds.
  • Future Projections: The program is now set up to claim $4 to $5 million annually in refunds.

 

Photo by M. Cooper on Unsplash

 

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