When incorporating discounts, promotions, or free shipping into a commercial invoice, it's essential to do so correctly to avoid customs issues. This article covers how to handle the most common discount scenarios.
Types of commercial invoice discounts
Partial discounts — Apply discounts to specific items or shipping costs as expected. For example, a 20% discount on a $10 shirt should show $8 on the commercial invoice.
Order-level discounts — The best practice is to allocate the discount value across the individual items.
Specific discount types and how to handle them
Buy one get one free
For buy-one-get-one-free promotions on the same item:
Correct method — Both items at half value.
Incorrect methods — Excluding the second item, or listing it 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.
Item | Quantity | Price |
Baseball cap (original) | 1 | $20 |
Baseball cap (BOGO — both at half price) | 2 | $10 |
Free items
When offering a different item for free, include it 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.
Incorrect methods — Excluding the free item, or listing it at $0.00.
Item | Quantity | Price |
Baseball cap | 1 | $15 |
Baseball (free item) | 1 | $5 |
Samples
Samples should have an accurate valuation with a note to customs that the consumer was not charged:
Correct method — Include the item with a price but specify the customer was not charged.
Incorrect method — Listing the sample at $0.00.
Item | Quantity | Price |
Sample cotton fabric — NO CHARGE FOR PROMOTIONAL ITEM | 1 | $3 |
Applying promo codes
Promo codes should be distributed across items to prevent the duty/tax payer from being overcharged:
Correct method — Distribute discounts proportionally across all items.
Incorrect methods — Not distributing the discount, or including the promo code as a negative line item.
Item | Quantity | Price (10% promo applied) |
100% cotton shirt | 1 | $18 |
Leather hiking boots | 1 | $90 |
100% wool socks | 1 | $9 |
Handling free shipping
Even when offering free shipping, include a reasonable shipping cost on the commercial invoice:
Correct method — Include the shipping price and reduce item values accordingly.
Incorrect method — Listing shipping as $0.00.
Item | Quantity | Price |
Baseball cap | 1 | $15 |
Shipping | 1 | $5 |
Gifts
Retailer to consumer — Do not include company names on the shipping label or commercial invoice. Customs will not accept a shipment as a gift with zero value if it originates from an online merchant or if the shipping label shows company involvement.
Individual to individual — Mark the shipment "Unsolicited Gift" with a detailed description (e.g., "Unsolicited gift: white microfiber composite leather Wilson volleyball"). The total value must not exceed the limit prescribed by customs for duty-free entry.
Item | Quantity | Price |
Unsolicited gift: Black New York Yankees baseball cap | 1 | $20 |