3min

Section 321:

Logistics and Cost Saving Opportunities for Online Retailers

November 28, 2023
Return Strategy
By Robert Domagala

The ecommerce world continues to rapidly expand as consumer demand for variety and convenience drives more and more users to the infinite aisles online. Alongside the ability to reach more and more customers in new global markets, businesses often find themselves navigating a complex continuum of rules and regulations when it comes to international trade. One regulation that is proving to be a game-changer for many ecommerce brands is Section 321. 

Section 321 is a provision within the United States Customs and Border Protection regulations that allows ecommerce brands to streamline their cross-border operations and expand their global reach by creating new opportunities to save on import duty fees for their customer orders.

In this article we'll begin to unpack what exactly Section 321 entails, its main rules and exceptions, and how, as a direct to consumer brand, you can leverage it to increase your profitability.


Understanding Section 321

Section 321, sometimes referred to as "de minimis" in the customs world, is a provision that allows for the duty-free entry of certain low-value shipments into the United States. Specifically, it applies to shipments with a total value of $800 or less. This means that items, such as products ordered by international customers from an ecommerce brand, can enter the U.S. without incurring traditional import duties and taxes, provided that each customer order being imported into the US, per day, is less than $800.


The Main Rules of Section 321

Value Limit: As mentioned above, Section 321 applies to shipments with a total declared value of $800 or less. It's important to remember that this value limit includes both the cost of the goods as well as the shipping charges to your customer. If the total all-in cost in $800 or less, then your shipment can qualify for duty-free entry into the United States.

One Shipment, One Day: Another key rule is that the $800 value threshold applies to a single shipment or shipment group entering the U.S. on the same day. This means that if your brand sends multiple shipments to the same customer on the same day, they must be combined to determine whether they fall within the Section 321 exemption. Send a single customer two separate orders totaling $800 (with shipping) then you’re good! Send that same customer one order totalling $1000, or three orders of $300 each (in a single day), and those shipments won’t qualify for Section 321.

Consignee Limitations: Section 321 shipments are intended to be for personal use by the consignee (the consignee is your customer). It is not intended for commercial or resale purposes, so this probably won’t work for your wholesale or bulk orders.

Compliance with Other Regulations: While Section 321 offers a significant advantage to ecommerce brands, brands still need to ensure that their shipments comply with other relevant regulations and restrictions, such as product safety and intellectual property laws. Section 321 exists to create import opportunities that remain pursuant to all regional rules and regulations, so you shouldn’t consider this a way to skirt those other requirements.


Exceptions to Section 321

There’s usually a catch or other requirements to be aware of, and while Section 321 can be a powerful tool for ecommerce brands to reduce shipping costs and increase profitability, it's essential to be aware of the exceptions that may disqualify a shipment from the exemption:

Value Over $800: Shipments with a total value exceeding $800 are not eligible for Section 321. In such cases, traditional import duties and taxes will apply.

Restricted or Prohibited Items: Controlled substances, firearms, counterfeit goods (and probably a slew of other regulated or naughty things) are not eligible for Section 321. Make sure you’re aware of these restrictions to avoid legal issues.

Commercial Use: This regulation is meant to benefit direct-to-consumer commerce, and if your shipment is intended for commercial purposes or resale, it does not qualify for Section 321. Personal use by your customer is a key requirement.

Multiple Shipments on Different Days: Section 321 applies to shipments received by the same consignee on the same day. If your brand sends multiple shipments on different days, they may not qualify for the exemption.


How Section 321 Benefits Ecommerce Brands

Now that we understand some of the basic parameters of Section 321, how can your brand benefit from it? Ecommerce brands can realize numerous benefits from leveraging Section 321 as part of their international trade strategy:

Cost Savings: One of the most significant advantages is the potential for cost savings. By exempting shipments valued at $800 or less from import duties and taxes, e-commerce brands can offer more competitive prices to their international customers. While this may not work out for luxury retailers selling goods priced well over $800, for many startup and scaling brands with average order sizes below the $800 limit, the potential cost savings on import duties can be significant. Savings to reinvest in your brand, or pass on to your customers!

Staying Competitive: The proliferation of D2C brands makes ecommerce a highly competitive category, and finding points of differentiation that will help your brand win its share of customers’ wallets is tough. Offering duty-free shipments can give you a competitive edge in attracting and retaining customers, particularly those who are cost-conscious.

Operational Efficiencies: Section 321 simplifies the customs clearance process for low-value shipments. Your brand can benefit from faster clearance times and reduced administrative overhead, making cross-border operations more efficient. 

Improved Customer Experience: Providing faster and more cost-effective deliveries through Section 321 can significantly enhance the overall customer experience. Customers love it when a brand delivers their goods quickly, when costs are contained, and when their expectations are well managed - Faster shipping times and lower costs almost always contribute to higher customer satisfaction and loyalty, so leveraging Section 321 could provide you with a customer experience advantage over your competition.


Conclusion

Section 321 is a valuable and increasingly popular tool that ecommerce brands can use to their advantage in a very competitive market. By understanding its main rules and exceptions, and integrating it into your strategy, your brand may be able to enjoy cost savings, a competitive advantage, streamlined operations, and an enhanced customer experience. All of this should serve your growth and expansion, and make your cross border trade easier.

For more information:


Rob Domagala, Head of Business Development

About ReturnBear

ReturnBear is the #1 end-to-end E-commerce returns management platform for brands selling internationally. Get access to a network of return points, preferred cross-border shipping rates, and an automated RMA platform that lets you recover inventory and issue refunds faster. Better returns for you and your customers.

Learn more
Choose a Category
2 min
September 2024 Merchant admin updates

The Merchant Admin has new updates for Fall 2024, including customizable refund payouts, a visual refresh, and faster app loading. Brands can now adjust refunds per case, improving flexibility and user experience.

7 min
Understanding Returns Management for E-Commerce brands

An overview of what returns management is, the benefits of an effective returns management strategy and why brands should prioritize it. Learn about the key elements of a successful returns management strategy, and upcoming trends in returns management.

7 min
The Top Return Management Software & Post Purchase Platforms

Explore the best return management software and post-purchase platforms to simplify eCommerce returns, improve customer experience, and reduce costs with automated solutions and advanced return portals – so you can select the perfect return solution for your brand.

3 min
Understanding Returns Fraud and Tips for Retailers on How to Reduce it

Returns fraud is a $101 billion dollar problem and one that can have detrimental impact for retailers. Learn about the most common types of returns fraud and what retailers can do to reduce fraud.

3 min
Reducing the Environmental Impact of Returns

What brands and customers are increasingly realizing is the significant environmental impact these returns can have if not managed with care, and the sustainability challenges that can arise from inefficient returns management.

3 min
How Numi cut costs on Canadian returns with ReturnBear

Numi's collaboration with ReturnBear led to a 60% reduction in return costs and a 33% boost in revenue retention, marking a significant operational and financial improvement for the brand.

4 min
Boosting Sales and Minimizing Return Costs: Unlock New International Markets With The Right Partners

Ecommerce expansion into international markets comes with the challenge of return management. It’s important to get the right return partners and solutions in place to support growth.

3min
Section 321: Logistics and Cost Saving Opportunities for Online Retailers

The ecommerce world continues to rapidly expand as consumer demand for variety and convenience drives more and more users to the infinite aisles online.

2min
Selling Online in Canada: A Comprehensive Guide for U.S. and International Businesses

Canada's ecommerce landscape is thriving, with more Canadians turning to online purchases than ever before.

4min
What US eCommerce Companies Need to Know About Doing Business in Canada

Expand your business to Canada with confidence. Our guide provides key insights on cross-border shipping, reverse logistics, and meeting local market requirements to boost sales and reduce return-related costs.

5min
Ecommerce Returns Management: Enhancing Customer Experience and Retailer Efficiency

Unlock the best eCommerce return solutions for your business. Learn how to manage returns efficiently, reduce losses, and keep your customers satisfied in the competitive online retail landscape.

2min
How to Deal with Returns When Dropshipping: 11 Things You Need to Know

Optimize your dropshipping business with effective returns management. Explore tips on reducing return rates, managing customer expectations, and boosting your eCommerce success.

2min
The Benefits of Reverse Logistics Providers in Canada

Explore the benefits of reverse logistics, where goods flow in the opposite direction. See how efficient returns management boosts sustainability, customer satisfaction, and cost-effectiveness for e-commerce businesses

5min
How to Sell on Hudson's Bay Marketplace, Thebay.com

A how-to guide for ecommerce sellers on the Hudson's Bay Co (HBC) marketplace. Everything from getting set up and listing products to establishing a returns management solution.

4min
Managing Cross-Border Ecommerce in Canada and the USA: a guide for brands and businesses

In the booming global ecommerce market, brands and merchants are increasingly embracing cross-border ecommerce, finding new opportunities to expand their customer base and tap into new markets.

4min
The Ultimate Cross-Border Sales Guide For Ecommerce Businesses

In today's fiercely competitive business landscape, ecommerce has become a crucial revenue source for retailers. To stay profitable and relevant, businesses must think beyond their domestic borders and explore cross-border selling.

6min
Marketplace Returns - Returnbear's guide to eCommerce growth and marketplace returns

In this blog post, we will discuss the advantages of expanding into marketplaces, the customer experience, and the importance of a comprehensive return management solution like ReturnBear. We will also highlight why partnering with a Canadian return management solution is an excellent choice for brands and international sellers looking to expand into the Canadian market from abroad.

5min
The Bay Marketplace returns: Partnering with ReturnBear for Hassle-Free reverse logistics

As a marketplace seller on TheBay.com, managing returns efficiently is essential to maintain customer satisfaction and optimize your operations. That's where partnering with a reliable Canadian return management solution like ReturnBear can make all the difference.

3min
ReturnBear Drop-Off Network Expands With PenguinPickUp

ReturnBear’s Canadian drop-off network has expanded! We’ve partnered with PenguinPickUp to offer return acceptance at their GTA locations.

3min
Optimizing International Returns in Canada with Reship and ReturnBear

Reship and ReturnBear enable international sellers to have a seamless cross-border return management solution that effectively inspects, accepts, and processes returns in Canada, the USA, and the UK.

3min
How Nadaré improved customer experience with enhanced return services

Nadaré is a jewelry brand that creates beautiful waterproof pieces at price points for all budgets. Andrea believes that everyone should have access to quality jewelry they love and feel beautiful wearing.

5min
Palladium Boots saved 70% in return shipping costs using ReturnBear drop-off locations

Palladium Boots Canada needed a solution to automate their return process, improve their response times, enhance the efficiency of their warehouse operations, and save them money on return shipping. 

2min
Preparing your business for 2023 and changing buyer behaviours

Over the last 3 years we’ve seen major shifts in consumer spending, loyalty and expectations. During the pandemic, consumers increased their spending and online purchases from grocery and apparel to furniture, housewares and other categories.

5min
9 eCommerce Trends to Stay Ahead of Competitors in 2023

Discover the top 9 eCommerce trends of 2023 to drive growth and customer loyalty. Learn about voice search, video content, AI chatbots, and more to keep your business competitive in the ever-evolving online market | eShipper guest post

10min
7 Shopify apps to recession-proof your business

If browsing through the Shopify App Store feels like you’re searching for a needle in a haystack you’re not alone. There are over 6000 apps in the App Store across 6 different categories. That’s a lot of time spent browsing!

5min
4 ways to strengthen your shipping and post purchase processes during the recession

In partnership with eShipper. Win customers in the long run by stepping up your pre and post purchase customer experience.

7min
What Do I Do With All My Returns? Creating The Ultimate Returns Customer Experience With Data Integration

Creating The Ultimate Returns Customer Experience With Data Integration. Blog is written by Vanessa Matos — Digital Marketing Manager at VL OMNI.

3min
Reimagine logistics with a purpose–built shared network

Let’s be honest. Logistics is hard. The retail industry is at a tipping point with an average brand expecting to lose 8% in margin by 2025 with the growth of eCommerce.

7min
eCommerce Can Be Profitable, Even With Higher Returns

Nobody likes returns! Customers are annoyed by the many process steps involved, from getting a shipping label to driving to the post office. For brands, returns don’t just mean lost revenue but also more costs.

5 min
Reducing Return Fraud on Free Returns for Your eCommerce Store

Return fraud is the practice of returning items that don’t qualify for a refund. According to a study performed by the National Retail Federation, about 6% of returns are fraudulent.

5min
How To Reduce Returns To Your E-commerce Store

Returns hurt your bottom line. But with a few effective product return practices, you can limit the number of return requests you receive and boost the health (and profits!) of your store.

7min
How To Offer Free Returns and Shipping Without Killing Your Profit Margin

As an eCommerce business owner, you want to entice customers to purchase your products without sacrificing your profits.

4min
The Ultimate Guide To Return Policies In Canada

Us Canadians are known as kind and helpful folk, so we expect the same kindness from the brands we engage in, especially when it comes to returns.

7 min
Understanding Returns Management for E-Commerce brands

An overview of what returns management is, the benefits of an effective returns management strategy and why brands should prioritize it. Learn about the key elements of a successful returns management strategy, and upcoming trends in returns management.

3 min
Reducing the Environmental Impact of Returns

What brands and customers are increasingly realizing is the significant environmental impact these returns can have if not managed with care, and the sustainability challenges that can arise from inefficient returns management.

4 min
Boosting Sales and Minimizing Return Costs: Unlock New International Markets With The Right Partners

Ecommerce expansion into international markets comes with the challenge of return management. It’s important to get the right return partners and solutions in place to support growth.

3min
Section 321: Logistics and Cost Saving Opportunities for Online Retailers

The ecommerce world continues to rapidly expand as consumer demand for variety and convenience drives more and more users to the infinite aisles online.

4min
What US eCommerce Companies Need to Know About Doing Business in Canada

Expand your business to Canada with confidence. Our guide provides key insights on cross-border shipping, reverse logistics, and meeting local market requirements to boost sales and reduce return-related costs.

5min
Ecommerce Returns Management: Enhancing Customer Experience and Retailer Efficiency

Unlock the best eCommerce return solutions for your business. Learn how to manage returns efficiently, reduce losses, and keep your customers satisfied in the competitive online retail landscape.

2min
How to Deal with Returns When Dropshipping: 11 Things You Need to Know

Optimize your dropshipping business with effective returns management. Explore tips on reducing return rates, managing customer expectations, and boosting your eCommerce success.

2min
The Benefits of Reverse Logistics Providers in Canada

Explore the benefits of reverse logistics, where goods flow in the opposite direction. See how efficient returns management boosts sustainability, customer satisfaction, and cost-effectiveness for e-commerce businesses

6min
Marketplace Returns - Returnbear's guide to eCommerce growth and marketplace returns

In this blog post, we will discuss the advantages of expanding into marketplaces, the customer experience, and the importance of a comprehensive return management solution like ReturnBear. We will also highlight why partnering with a Canadian return management solution is an excellent choice for brands and international sellers looking to expand into the Canadian market from abroad.

2min
Preparing your business for 2023 and changing buyer behaviours

Over the last 3 years we’ve seen major shifts in consumer spending, loyalty and expectations. During the pandemic, consumers increased their spending and online purchases from grocery and apparel to furniture, housewares and other categories.

5min
4 ways to strengthen your shipping and post purchase processes during the recession

In partnership with eShipper. Win customers in the long run by stepping up your pre and post purchase customer experience.

7min
What Do I Do With All My Returns? Creating The Ultimate Returns Customer Experience With Data Integration

Creating The Ultimate Returns Customer Experience With Data Integration. Blog is written by Vanessa Matos — Digital Marketing Manager at VL OMNI.

3min
Reimagine logistics with a purpose–built shared network

Let’s be honest. Logistics is hard. The retail industry is at a tipping point with an average brand expecting to lose 8% in margin by 2025 with the growth of eCommerce.

7min
eCommerce Can Be Profitable, Even With Higher Returns

Nobody likes returns! Customers are annoyed by the many process steps involved, from getting a shipping label to driving to the post office. For brands, returns don’t just mean lost revenue but also more costs.

5 min
Reducing Return Fraud on Free Returns for Your eCommerce Store

Return fraud is the practice of returning items that don’t qualify for a refund. According to a study performed by the National Retail Federation, about 6% of returns are fraudulent.

5min
How To Reduce Returns To Your E-commerce Store

Returns hurt your bottom line. But with a few effective product return practices, you can limit the number of return requests you receive and boost the health (and profits!) of your store.

7min
How To Offer Free Returns and Shipping Without Killing Your Profit Margin

As an eCommerce business owner, you want to entice customers to purchase your products without sacrificing your profits.

4min
The Ultimate Guide To Return Policies In Canada

Us Canadians are known as kind and helpful folk, so we expect the same kindness from the brands we engage in, especially when it comes to returns.

Start cutting your
costs on returns

We offer a white-glove onboarding process, and can have you live in as little as 2 days!

Request a demo