International returns have quietly become much more complicated and expensive for U.S. brands following the elimination of the de minimis rule for imports.
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For years, packages valued under $800 could enter the U.S. without duties or taxes. That’s no longer the case. Every shipment coming into the country now faces duties, tariffs, taxes, and processing fees, even for low-value orders. “Consumers in the U.S. aren’t used to duties and taxes at all,” said Rathna Sharad, Founder and CEO of FlavorCloud. “Now even a $50 or $100 parcel can suddenly come with an unexpected bill.”
Those changes hit even harder when it comes to returns. When an international customer sends an item back to a U.S. brand, that package is now treated much like a brand-new import. Many postal carriers have stopped handling returns to the U.S. altogether because they can’t manage the new customs paperwork or remit duties and taxes. “That’s why you’ve seen so many postal carriers stop shipping to the U.S.,” Sharad said.
That leaves brands relying on more expensive parcel and express carriers. Even then, if a return isn’t clearly identified as rejected U.S. merchandise coming back to its original country, it can be hit with duties and tariffs all over again. “Customs doesn’t know it’s a return unless the paperwork is very specific,” Sharad said. “You have to prove it was originally exported, rejected by the consumer, and is the exact same item coming back.”
And even when everything is done correctly, returns aren’t free anymore. “You can avoid the duty, but you’re still going to be charged the tariff and processing fees,” Sharad said. “It’s not free the way it used to be.”
In some cases, the math simply doesn’t work. The cost of return shipping, combined with tariffs and fees, can exceed the value of the product itself. That’s pushing some brands to refuse returns or destroy merchandise rather than bring it back into inventory. “At that point it’s just a math problem,” Sharad said. “If it costs more to bring it back than the product is worth, merchants are better off refusing it.”
Sharad said this shift isn’t temporary. “De minimis is not going away. This is the new normal,” she said. “Governments want visibility into what’s crossing their borders, and scrutiny is the name of the game.”
The result is a growing gap between how international commerce now works and what shoppers expect. Consumers still assume returns will be easy and free, even when buying across borders. “Consumers don’t think in terms of domestic versus international,” Sharad said. “They have a relationship with the brand, and they expect the same experience.”
