The DDP Trap: How Supplier Scams Can Destroy Your Business

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Table of Contents

1. The DDP Trap: Common Scams to Watch For
   • The “Two-Invoice” Trick
   • The Wrong Product Code
   • The “Made Somewhere Else” Myth
2. The Real Cost: It’s More Than Just Money
3. How We Help: DDP Done Right
4. Import with Confidence, Not Fear

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You found the perfect product, the price is right, and the supplier even offers DDP (Delivered Duty Paid) shipping. It feels like the perfect deal: they handle all the shipping, customs, and duties. You just wait for your goods to arrive.

But with today’s high tariffs, that dream can turn into a legal headache fast. You see your competitors getting ahead and wonder if you’re falling behind by not taking the “DDP deal” your supplier is offering. You might feel like you have to either risk it or lose business.

Let’s be direct: what your supplier calls an “easy solution” is often a hidden trap for customs fraud. And when things go wrong, it’s you, not them, who will face the serious trouble.

The DDP Trap: Common Scams to Watch For

Your supplier is focused on their bottom line, not on keeping you out of legal trouble. They might suggest “solutions” that are actually common ways to illegally avoid tariffs. Here are the most common tricks to look out for, and what your supplier might say.

1. The “Two-Invoice” Trick

• The Scheme: The supplier creates two invoices: a fake one with a low value for customs, and the real one for you to pay them through a different channel.
• What Your Supplier Says: “We’ll show $butyoucantransferthe\; other$15,000 to our other account.” or “We’ll just mark this as a low-value sample.”
• The Real Violation: This is illegal. It breaks U.S. customs laws like Entry of Goods by False Statements (18 U.S.C. §§ 541-542) and can lead to big penalties under the False Claims Act.

2. The Wrong Product Code

• The Scheme: Your supplier suggests using a different Harmonized Tariff Schedule (HTS) code for your product because it has a lower duty rate.
• What Your Supplier Says: “Let’s use this other HTS code—it’s only 5% duty instead of 25%.” or “The HTS codes are so confusing, no one will even notice.”
• The Real Violation: Doing this on purpose is fraud. But even if it’s just a mistake, you can still be penalized for negligence under 19 U.S.C. § 1592.

3. The “Made Somewhere Else” Myth

• The Scheme: To get around tariffs on Chinese goods, your products are sent to a third country like Vietnam or Mexico for a small, final step like packaging. Then they’re falsely labeled as being made there, even though they don’t meet the legal requirement for “substantial transformation.”
• What Your Supplier Says: “We’ll do the final assembly in Vietnam—that makes it a Vietnamese product!”
• The Real Violation: This is called illegal transshipment, and it breaks laws against false country of origin marking (19 U.S.C. § 1304) and false statements (18 U.S.C. § 542).

The Real Cost: It’s More Than Just Money

The consequences for getting caught are not a slap on the wrist. The stakes are high and could cost you your business and even your freedom. Here’s what you could be up against:

• Huge Fines: Penalties can be as high as the full U.S. retail value of your products.
• Criminal Fines: You could personally face fines of up to $250,000.
• Prison Time: Some of these violations can lead to 2 years in prison for each offense.
• Triple Damages: Under the False Claims Act, you could be forced to pay three times what the government lost in duties.

How We Help: DDP Done Right

This doesn’t mean DDP is always bad. It means you need a partner who acts as a safety shield between you and these risks. At Betegift, we’ve seen these problems firsthand and built our DDP service to protect you from these exact issues.

Here’s how we keep you safe:

Import with Confidence, Not Fear

The pressure to keep up with competitors is real, but taking illegal shortcuts is a short-term gamble that can ruin your business. Doing things by the book builds a stronger, more stable business for the long run.

Don’t let a supplier’s promise of an “easy” shipment put your business and personal freedom at risk. Work with a team that knows the traps and is focused on protecting you from them.

Ready to import without the worry? Talk to a Betegift expert today and see how our compliant DDP service gives you real peace of mind.