Why Traditional Duty Drawback Programs Fail
Ryan Janusee
6 min read
Nov 6, 2025
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For years, duty drawback has been treated as an afterthought in trade compliance: a bureaucratic process buried in spreadsheets and red tape. But as global trade dynamics shift and tariff exposure grows, it’s become a critical lever for cash flow and competitiveness. This article explores why traditional approaches to drawback consistently fail and how AI-powered automation is redefining what’s possible for refund recovery and compliance.
Introduction
In the last decade, rising tariffs have transformed duty drawback from a niche refund program into a mission-critical cash flow opportunity for the C-suite. The money left on the table is no longer a small rounding error; it's a significant figure that demands a modern solution.
Unfortunately, the traditional methods most companies use to manage drawback are fundamentally broken. Manual and legacy software-based processes are slow, prone to error, and incapable of handling the complexity required to maximize refunds, leaving billions of dollars in unclaimed duties.
The Manual Method: Spreadsheets and "Cherry-Picking"
Since the advent of spreadsheet software, most drawback claims have been put together in Excel. And some are still on paper! A compliance specialist will hunt for documents, manually enter data to tie imports to exports, and use lookup formulas across massive files.
This method is defined by its deficiencies:
It is incredibly slow. Compiling the necessary data and constructing claims can take weeks or months.
It is prone to human error. Manual data entry and complex formulas create a high risk of mistakes that can jeopardize a claimant's refunds during a CBP audit.
It is suboptimal by design. The workload is so burdensome that teams often "cherry-pick" only the easiest matches, abandoning more complex claims for manufacturing or multi-party transactions.
The Legacy Software Method: Rigid and Brittle
The next method is the one by far most in use today: custom-built, rule-based software. These programs are faster than manual work but are still fundamentally brittle. They operate on deterministic logic, looking for exact matches based on pre-defined rules.
This approach fails in the face of real-world trade data:
It cannot handle "noisy" data. The system lacks the contextual awareness to understand that "Part-123" and "P-123" may be commercially interchangeable, causing it to miss valid matches.
It requires constant maintenance. Every time a data format changes or a new regulation is introduced, a human must manually update the code.
It finds the first match, not the best match. These systems often lack the sophistication to optimize pairings, leaving significant money on the table, particularly in light of today’s fast moving trade environment.
The AI Drawback Solution
Thankfully, the newfound and widespread need for duty mitigation has aligned with another sea change: the proliferation of accessible AI technology. This double-up wave is improving the accessibility and compliance of drawback, while removing time-consuming, complex audit work that has historically yielded anxiety-inducing compliance risks.
The Bottom Line
These traditional methods are ill-equipped and outmoded for the modern trade environment. They force businesses into a false choice: either accept a lower refund amount by only pursuing low-hanging fruit or invest massive amounts of time and labor into a high-risk, questionably compliant manual process. AI Drawback is the solution to these pain points.
How Caspian Can Help
Caspian moves well beyond these outdated methods. Our platform is built to handle the complexity and scale of modern drawback, ensuring you don't have to cherry-pick your refunds. We identify and validate every possible match, maximizing your recovery while ensuring full compliance.
Ready to see how a modern approach can impact your bottom line? Contact our specialists for a free consultation.
