Hey, no one’s perfect. That’s a fact that anyone who works within the manufacturing space knows all too well. Human error, a drawback, and production failures happen all the time, which means that importers sometimes end up with huge shipments of products they can’t sell and can’t simply throw away.
Imports Gone Wrong
We’re often called upon to handle the destruction of these defective or off-spec products. In a recent example, a clothing retailer imported 14,000 items of clothing from its manufacturer in Asia, only to find that the quality of the pieces was poor. The retailer couldn’t sell them to customers and didn’t want them to be sold on the black market, but had no other viable way to get rid of the items. Northeast Data Destruction handled the pickup, transportation and shredding of all 14,000 pieces, with company representatives on hand to witness the destruction.
Importing products that turn out to be defective causes a domino effect of backups and complications. For a company that finds itself in this scenario, things can go from bad to worse. Receiving a shipment of goods that can’t be sold means taking a huge financial hit from tariffs.
As all importers know, U.S Customs and Border Protection charges tariffs, or duty, on goods that are brought into the country. For example, our retail customer paid duty of more than $30,000 for the clothing that turned out to be defective. Negotiating refunds for the cost of the goods is between the importer and the manufacturer, but importers are solely on the hook for tariffs.
A Good Kind of Drawback
CBP can issue drawback, or a refund of duty, to companies that have to destroy the goods they imported. (In order to qualify for drawback, the imported merchandise must be destroyed so completely that it has no commercial value.) Getting drawback approved requires submitting proof that the duty was paid and proof that the goods were destroyed. This isn’t a quick or straightforward process, but it does give companies the opportunity to recoup some of their losses.
That’s what happened in the case of our retailer customer. By destroying the unsellable clothing at our facility, the company was able to get a certificate of destruction that allows it to apply for drawback. Taking that path allowed the retailer to recoup the tens of thousands of dollars that it spent in duty payments. That wouldn’t be possible without the critically important certificate of destruction that Northeast Data Destruction provided.
If your company has to destroy imported goods because they’re off-spec or defective, failing to destroy them properly could mean you’re leaving huge amounts of money on the table. Northeast Data Destruction can help. We can handle every part of the destruction process, including providing secure pickup services. Representatives from your company are able to attend and witness the destruction, and we’re equipped to thoroughly and irreversibly destroy everything from ID badges to car parts.
Don’t let a manufacturing mix-up leave your company holding the bag. Contact Northeast Data Destruction today with any questions!