Challenge
In January 2020, a potential client approached J.M. Rodgers to set up a duty drawback program, believing they were eligible for a 1313(J2) Substitution Unused Merchandise Duty Drawback program. Upon investigation, J.M. Rodgers found a critical issue: to qualify for 1313(J2), the products must be unused. However, the apparel company was selling products and then receiving returns, which classified the items as used and disqualified them from unused substitution drawback.
Solution
Despite this challenge, J.M. Rodgers took on the account, leveraging extensive experience with apparel companies and similar supply chain scenarios. The senior duty drawback team conducted a thorough analysis of the client’s data and supply chain, determining that a 1313(C) duty drawback program would be more suitable. This new program allowed for duty drawback filings with minimal changes required from the client, except for:
- Inventory Management: Keeping drawback-eligible inventory together.
- Tracking Adjustments: Adjusting the inventory system to track part numbers and HTS numbers more stringently.
Results and Benefits
Since transitioning to J.M. Rodgers’ services, the client has achieved:
- Significant Refunds: Multimillion-dollar duty drawback claims have been filed successfully.
- Improved Processes: Restructuring the client’s inventory process has allowed for smoother and more timely future claims.
