When incorporating discounts, promotions, or free shipping into a commercial invoice, it is essential to do so correctly to avoid issues with customs. This guide provides detailed instructions on managing various discounts and promotions on commercial invoices.
Types of Commercial Invoice Discounts
- Partial Discounts: Apply discounts to specific items or shipping costs as expected. For instance, a 20% discount on a $10 shirt should reflect $8 on the commercial invoice.
- Order Level Discounts: These can be trickier. The best practice is to allocate the discount value across the items.
Specific Discount Types and How to Handle Them
Buy One Get One Free
For buy-one-get-one-free promotions where the same item is offered for free:
-
Correct Method:
- Both items at half-value
Incorrect Methods:
- Excluding the second item.
- Listing the second item at $0.00.
Customs may assign an arbitrary value to items listed at $0.00 or excluded from the invoice, leading to additional duties or taxes.
Original:
| Item | Quantity | Price |
|---|---|---|
| Baseball cap | 1 | $20 |
The second one is free:
| Item | Quantity | Price |
|---|---|---|
| Baseball cap | 2 | $10 |
Free Items
When offering a different item for free, it should be included in the invoice with a reasonable sale price.
-
Correct Method:
- Add the free item with a price (e.g., $5), and reduce the original item by the same amount (e.g., $5).
Incorrect Methods:
- Excluding the free item.
- Listing the free item at $0.00.
Original:
| Item | Quantity | Price |
|---|---|---|
| Baseball cap | 1 | $20 |
Free item:
| Item | Quantity | Price |
|---|---|---|
| Baseball cap | 1 | $15 |
| Baseball | 1 | $5 |
Samples
Samples should have an accurate valuation and include a note to customs indicating that the consumer was not charged.
-
Correct Method:
- Include the item with a price, but specify the customer was not charged.
Incorrect Methods:
- Listing the sample at $0.00.
Example:
| Item | Quantity | Price |
|---|---|---|
| Sample cotton fabric - NO CHARGE FOR PROMOTIONAL ITEM | 1 | $3 |
Applying Promo Codes
Promo codes should be distributed across the items to prevent the payer of duties and taxes from being overcharged.
-
Correct Method:
- Distribute discounts across items.
Incorrect Methods:
- Not distributing the discount.
- Including a promo code as a negative amount.
Original:
| Item | Quantity | Price |
|---|---|---|
| 100% cotton shirt | 1 | $20 |
| Leather hiking boots | 1 | $100 |
| 100% wool socks | 1 | $10 |
Discounted with 10% promo code:
| Item | Quantity | Price |
|---|---|---|
| 100% cotton shirt | 1 | $18 |
| Leather hiking boots | 1 | $90 |
| 100% wool socks | 1 | $9 |
Handling Free Shipping
Even when offering free shipping, including a reasonable shipping cost on the commercial invoice is essential.
-
Correct Method:
- Include the shipping price, and reduce the items accordingly.
Incorrect Methods:
- Listing shipping as $0.00.
Original:
| Item | Quantity | Price |
|---|---|---|
| Baseball cap | 1 | $20 |
| Shipping | 1 | $0 |
Free shipping:
| Item | Quantity | Price |
|---|---|---|
| Baseball cap | 1 | $15 |
| Shipping | 1 | $5 |
Gifts
For gifts shipped from a retailer to a consumer or from an individual to an individual:
-
Retailer to Consumer:
- Ensure that the shipping label and the commercial invoice do not include company names. Customs will not accept a shipment as a gift with zero value if it originates from an online merchant or if the shipping label indicates any company involvement.
-
Individual to Individual:
- Ensure the shipment is marked "Unsolicited Gift" and includes a detailed description (e.g., "Unsolicited gift: white microfiber composite leather Wilson volleyball").
- The total value must not exceed the limits prescribed by customs for duty-free entry.
| Item | Quantity | Price |
|---|---|---|
| Unsolicited gift: Black New York Yankees baseball cap | 1 | $20 |
Conclusion
Properly managing discounts and promotions on commercial invoices ensures compliance with customs regulations and prevents unexpected charges. Always distribute discounts appropriately, list free items with reasonable values, and ensure shipping costs reflect a true value to facilitate smooth customs clearance.