Small businesses await US tariff refunds as shipping firms process claims

Small businesses are facing delays in receiving refunds for tariffs struck down by the US Supreme Court, with companies that paid duties through shipping firms such as FedEx, DHL and UPS waiting longer to recover their money.

Asher Rapkin, owner of California watch retailer Collective Horology, said he submitted paperwork in March to recover USD 164,000 in tariffs but did not receive any money until September. He initially received a USD 59,200 wire transfer without an explanation of which transactions had been refunded.

FedEx said it is focusing on precision and regulatory compliance and has already released hundreds of millions of dollars. The company said it must check each claim, verify millions of entries and match them with corresponding US government data. Once customers submit accurate and complete information, FedEx said it can disburse refunds within 30 days.

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FedEx holds $800 million in customer refunds

FedEx said it was the importer of record for 43 per cent of the 53 million tariff entries collected by the government. In June, the company said it had received USD 800 million in refunds belonging to its customers and would begin distributing the funds in August.

The US government had to refund USD 166 billion in tariffs collected during the year the duties were in place.

Large importers that act as their own importers of record have received refunds directly. However, smaller businesses that often pay tariffs through FedEx, DHL and UPS have had to wait longer to recover the funds.

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DHL, FedEx update refund processes

DHL said it proactively filed refund claims for shipments where it acted as the importer of record and that around 92 per cent of eligible customer refunds had been returned as of mid-September.

FedEx said it has improved its web portal to make it easier for customers to submit and track multiple refund claims. The company is also adding automation to streamline validation and the refund process.

The refunds include interest, which is taxable, requiring FedEx to collect information such as Social Security numbers or employer identification numbers for tax forms.

For Rapkin, FedEx later paid another USD 91,000 in September following media inquiries into his case. He plans to use the funds for payroll, inventory purchases, employee health insurance and rent, but is still waiting for remaining refunds from FedEx and the government.