The Real Cost of Cross-Border Returns After the End of De Minimis

Most cross-border sellers priced the end of de minimis into their outbound shipments and stopped there. That is only half the exposure. The same cost structure now applies on the way back, and a returned order can trigger duties, customs paperwork, and brokerage fees a second time.

What actually changed in 2026

The de minimis exemption used to let shipments under 800 dollars enter the United States duty-free, no formal customs entry required. That exemption has been removed in 2026. Every shipment into the US, regardless of declared value, is now subject to customs inspection and applicable tariffs.

Duties on affected categories range from 15 percent to over 30 percent, with electronics and apparel from China and Hong Kong sitting at the higher end of that range. For sellers who built a business model around small, frequent, low-value parcels crossing the border duty-free, this is not a minor cost adjustment. It is a structural change to the unit economics of every single order.

Small ecommerce brands are absorbing the brunt of this shift. Large retailers can soften the blow with bulk purchasing power, negotiated carrier rates, and cash reserves that smooth out margin compression over time. A smaller cross-border seller does not have that buffer, so the added cost shows up directly in margin or gets passed to the customer at checkout, where it can suppress conversion.

The part sellers keep missing: it's not just the tariff rate

For a Canadian seller shipping into the US, or any cross-border seller in a similar position, the bigger issue is not even the percentage rate applied to a given shipment. It is that every order now requires formal customs entry, full stop.

Formal entry means brokerage and processing fees apply, and they apply even to low-value shipments that would have cleared with zero friction under the old exemption. A 40 dollar order and a 400 dollar order both now require the same customs paperwork and the same brokerage touchpoint. That flat, per-shipment cost hits small orders disproportionately hard, since brokerage fees do not scale down with order value the way percentage-based duties do.

This changes how cross-border sellers need to think about their lowest-value SKUs and their lowest-value orders specifically. A shipment that used to be trivially profitable to send across the border can now carry a fixed cost that erases most or all of its margin, before you even get to the tariff itself.

Then it happens again on the way back

Here is the piece that catches sellers off guard even after they have adjusted their outbound pricing: the same cost structure applies to returns.

An international return used to be, in practical terms, a reversed shipping label. The item went back the way it came, and aside from the cost of the label itself, there was little additional friction. That is no longer true.

A cross-border return can now trigger duties, customs paperwork, and brokerage fees a second time, once on the way in and again on the way back. If a seller assumes an international return works like a domestic one, refund the customer, ship the item back, restock it, they are underestimating the true cost by a significant margin. The round trip, not the one-way shipment, is now the relevant unit of cost.

Why full refund and reship stops making sense

Run the math on a modest cross-border order. Say a 60 dollar item ships from a US brand to a Canadian customer, or the reverse. The customer decides to return it. Under the old model, that return costs a label and some restocking labor.

Under the current model, that same return can trigger a second round of customs entry, brokerage fees, and potentially duties on the way back across the border, on top of the original outbound cost that was never getting refunded. Add the cost of processing a full refund on top of that, and there is a real chance the seller loses money on the entire transaction, not just gives up margin.

This is the core problem with treating cross-border returns like domestic ones. A domestic return policy defaults to full refund and reship because the marginal cost of a domestic reverse shipment is low and predictable. A cross-border return policy that defaults to the same behavior is applying a domestic cost assumption to a transaction that no longer has domestic economics.

Building a return policy that accounts for round-trip customs cost

Cross-border sellers need a return policy that explicitly prices in these round-trip costs instead of assuming international returns behave like domestic ones. That does not mean refusing returns. It means being deliberate about which resolution fits which situation.

For genuinely defective or wrong items, a standard refund process still makes sense, since the customer should not absorb a seller's fulfillment mistake. But for low-value cross-border returns driven by preference, sizing, or buyer's remorse, favoring store credit or a keep-the-item resolution over a full refund-and-reship avoids triggering a second cross-border shipment entirely.

Store credit resolves the customer's request without moving a physical item back across a border that now charges twice for the privilege. A keep-the-item resolution on a low-value SKU can be the cheapest outcome available once you account for the brokerage fees and potential duties a physical return would trigger, even before factoring in the cost of the original outbound shipment.

Where merchant control matters most

This only works if the seller, not a rigid platform default, decides which resolution applies to which order. A returns process that forces every request into a full refund ignores the cost structure that cross-border sellers are now operating under. A returns process that lets the merchant set fees and choose from a range of outcomes gives them room to protect margin on exactly the orders where a physical return no longer makes financial sense.

That flexibility is what turns a returns policy from a fixed cost center into something a cross-border seller can actually manage. The goal is not to make returns harder for the customer. It is to send each return to the resolution that makes sense given what a physical round trip across the border actually costs today.

What to check before Q4 volume hits

If you sell cross-border and have not revisited your return policy since de minimis ended, a few questions are worth answering now, before Black Friday and Cyber Monday volume starts generating the returns you will process in Q1.

Do you know which of your SKUs are most exposed to a costly round trip, meaning low value items where brokerage fees on the return could exceed the item's worth? Does your current returns flow let you offer store credit or a keep-the-item resolution as an alternative to a full refund, or is full refund the only path a customer can select? And can you set different resolution rules for cross-border orders specifically, rather than applying one policy to every order regardless of where it shipped from or to?

If the answer to any of those is no, that is the gap to close before Q4 demand turns into Q1 cross-border return volume under a cost structure that did not exist the last time you set your return policy.

The takeaway for cross-border sellers

De minimis did not just change what it costs to bring a product into the country. It changed what it costs to send one back out, and that second cost is easy to miss because it only shows up after the sale, when a customer requests a return.

Sellers who keep treating cross-border returns like domestic ones will keep absorbing brokerage fees and duties they never priced into the transaction. Sellers who build resolution flexibility into their return policy now get to decide, order by order, whether a physical round trip is worth triggering at all.

ShipAid Returns & Exchanges gives cross-border sellers merchant-controlled fees and revenue-retaining resolutions like store credit and keep-the-item, so a return does not have to mean a second customs entry and a second round of brokerage fees.