CyberRebate may be circling the drain

[TheLoneGunman]

They are now allowing unlimited rebates on items where they used to restrict quantities purchased.

Likely this is to bring in large amounts of cash quickly. This makes their Ponzi (pyramid) scheme all the more likely to crash soon.

I do not have inside or personal knowledge of this and it is completely conjecture on my part.

Further, I have done business with them before and after much trauma and Apex intervention finally got my money.

I am just trying to give people fair warning.

[Inspect-her Gadget]

Nooooooooooooooooooo!! Say it aint so! I still have money with them!!!

[J-Dogg]

Well that sucks a certain body part. I was just about to make another purchase, maybe I should wait until I get my last $600 check from them.

[NiceMann]

I trust cyberrebate...they've been around for awhile and I made 2 orders and got back my money with no trouble. CyberRebate will be around for a while longer.

~NiceMann

[welfareloser]

hmmm... could be an indication that they need cash quick, could also mean that they are doing so well that they no longer need to limit the rebates... i'll be sittin on my money til i see what's up. but they've been around since 1997, so i'll bet they're okay...

[smeakim]

I must be in the worng job for all the money you people spen there. I need your jobs. I couldn't imagine giving up $600.00 or what ever amount for months on end to get something for free. If you can do this let me know what you do for a living and I think I will make a career change who is with me??? HA HA

[IlliniFan]

Hey look! Cyberrebate has "free" DVD's now as well! And they ONLY cost $170 before rebate!?!? What a scam!!! Its getting a bit ridiculous, do you think they are desperate for cash?

[giambona]

no i think it's $169 actually :D

[mengkc]

For someone living in New York State and pay 8 percent sales tax, this is a no brainer. I can buy the free stuff with the sales tax I have to pay.

[TheLoneGunman]

There is a way you can actually make some money off CyberRebate.

I am not a CPA, but you have to take certain tax courses to get your securities license.

If you order from CyberRebate in the end of one tax year, but don't get the merchandise until the next, you can declare the money you paid (likely in the thousands) as a "loss" for that year. Then when you get the merchandise and later the rebates, you can donate the merchandise (at CyberRebate prices since that is "fair market") and it will offset the rebates so you have no liability the next year.

You can make some things more complicated and try to squeeze a net profit out of it too, if you want.

But of course, if they go under first, then you have a real loss and that is no fun.

[stlite]

Did all of you also notice that they're ending their free shipping the end of this month.

[J-Dogg]

I didn't notice that. That makes me think they are leaning towards going belly-up. Say it ain't so :(

[ImInGod]

Sorry to add to the bad news, but I've got about $350 in rebates which they say they never received (I mailed them 5 months ago). I got one rebate, but not the other 5-6 or so. Apparently, they would accept a fax of all the rebate information Xeroxed (including the UPCs, which I didn't copy -- a piece of advice to anyone buying from them). Also, you all may be interested to know that Clark Howard, who is a very popular consumer-advocate radio host (he gives advice on lawyers, investing, scams to avoid, etc.) here in Atlanta -- and he's now syndicated, so probably outside Atlanta -- he said to be very, very careful when ordering from CyberRebate (in other words, there's something not right here!). He generally avoids mentioning the name of a company unless they're really doing something wrong, ripping people off, etc., so for him to say what he said is pretty significant to me.

[J-Dogg]

Yeah, that is good advice. I started scanning everything I sent in case they "claimed" to have not received it.

[got apex]

Like someone said above, I can't stand to wait for three or 6 months in my case for over $300 worth of rebates. I'd rather spend $20 to get Gladiator at Costco. Hahahah

[lalaland]

here's the note i got in my cyberrebate account under one of the rebates:
"Your rebate is incomplete for the following reason(s):
Rebate Code was not on the envelope"

i know for a fact that i included the rebate code on the envelope...
but what difference does it make? they open up ur rebate, know it's you, but decide not to process it because there's no rebate code on the envelope?????????
emailed them about it, still waiting to hear from them...

[INeedAVacation]

hmmm...I have always been a big advocate of cyberrebate but...well, I have had the same experience with them saying that I was missing the rebate code on the outside of two envelopes from two separate orders. That has NEVER happened to me before and it seems unlikely since I print all the envelopes on my computer at once using the same set up on each envelope only changing the variable information. I called them and the rep. said that I had to fax the information so I printed it up again, filled out the form, and faxed it right away. She said it should take about a week to appear on my account page. I'll call them back in a few days.

I do plan on ordering from them in the future but right now I have a huge sum of money invested in them right now so I'm going to wait for some of that to find its way back to me. Then my orders will be for smaller amounts.

[ken]

I think cyberrebate will be around for awhile. Their business model actually provides for making some money.

I read an article on the company that said normal rebate redemption rates are about 25% (i can't hardly remember though) but theirs was like 95%+

Even at that percentage though, they may make some money, assuming the rebate processing costs aren't killing them.

$170 x .05 = $8.50, minus shipping of $5 = $3.50 for the DVD. Hmm, minus costs of good sold, that's a $10 loss.

Nevermind, the ship is sinking. They gotta price these DVD's at $500 apiece to make money.

[TheLoneGunman]

I agree that under "normal" circumstances the percentages you quote on rebates are realistic. For example, you buy a $20 DVD and are offered a $5 rebate and even if you don't redeem it, you are still getting a reasonable deal. Additionally, the time and trouble to collect the $5 might not be worth it for you.

On the other hand, the ONLY reason to shop at CyberRebate these days is the REBATE. If you were not interested and willing to jump through their hoops, why would you buy their trash (I ordered about $2500 worth of their stuff so I think my quality characterization is appropriate). I have received $20 items from that that had $2 price stickers from the local drug store, for example.

Additionally, the amounts of the individual rebates has jumped so much (from a $20 item selling for $30 to having it sell for $200) that each rebate is worth personal and individual attention. For example, when I used Return Receipt for my rebates they seemed to instantly appear on the system since they couldn't deny they got them. This was not cost effective on the small rebates, but for a $200+ rebate, it is only about 1% which is a fair amount to get some insurance.

Therefore, I think they probably have close to a 95% attempted redemption rate of which 10-20% have some errors by the submitter and probably another 40-50% are flagged incorrectly on errors to see if they will be challenged by the customer and if not, then they get the 50% redemption rate Ken is talking about. (The figures I am guessing at are based on my experiences about 1 year ago).

[Markel]

I have always suspected that a big part of their "business model" is the built-in delay on returning your rebates. They are guaranteed at holding on to your money for at least 3 months. Pool it all together in a "rolling" short term investment and you've got a tidy source of interest income.

[ImInGod]

I agree. 3 months may even be too little. The one rebate I've received from them (out of about 6 orders) took closer to 4 months. Well, somewhere in between. But anyway, I've long thought that the way they make their profit is by investing the money for these few months. However, after being ripped off by them for these $300+, w/o much way seemingly left to get it back, I've changed my mind partially: apparently, ripping people off is the main way they make money. As much as they must be stealing (essentially), the profit there must far exceed the profit in interest.

[TheLoneGunman]

One of my undergrad degrees is in econ (as is my MBA concentration) so I will approach this again:

You order a bunch of stuff and pay them in full.
Immediately, they are forced to allocate out of your payment:
10% (minimum) for the actual cost of the goods you ordered
2% (way underestimated) shipping cost
8% (likely underestimated) customer acquisition payment [ex. Apex bribe, ****** fee {yes, they keep some of what they get and give you the balance} and others]

Therefore, although they need to return 100% of the money in 3 months, they only have 80% to invest. Since they need to earn 25% in 3 months (1/4 of a year) just to have your rebate check clear, they must get a 100% annual return on their investment. [If you can promise me even a 50% return on my money, I can stop working forever!]

Overhead and miscellaneous costs should easily run 30% so as long as they make the completely outrageous return of 220% per year, they can break even!

Let us assume as a business strategy they decide to deny 50% of the rebates. Now, they are able to break even. However, the additional costs (such as the BBB coming after them and the Attorney General filing fraud charges) would tend to make this plan unprofitable.

[dally38]

I don't pretend to know how they are doing it, but it is working. Two days ago, I received checks back for abit over $1900.00. I have ordered dozens of times over the past couple years and never had a problem with them that they did not quickly fix with one phone call. Since I live in a state that does not have sales tax, and shop with ****** and dash, I have made money shopping with them and got tons of stuff free. Also they recently redesigned the web site, and continue to add more new products and catagories. Why would they bother if they were going to shut it down?

[Markel]

I think I've ordered 4 or 5 batches of about 6 items each. I only had a problem once, where they claimed to have never received one rebate request. I resubmitted copies of the missing item, and after NUMEROUS email complaints and assurances of their acting on it, I eventually got the rebate. All other rebates came at about the 14 week "limit" after submission. I would reemphasize the warning to KEEP COPIES OF ALL DATA (FORMS, UPC CODES, ETC.) FOR EVERY REBATE.

A couple of notes on the "business plan" discussion (not in any way disagreeing with what TheLoneGunman contributed -- after all, I'm a software engineer, not an MBA!). One, in all my ordering there was never any "customer acquisition fee", as I went directly to their site, as I suspect many others do. Second, I never suggested that investment interest was their only source of income -- just one source. Third, I suspect that another (questionable) aspect of their model is a continuously increasing inflow of new orders (bolstering up the pyramid), which might explain the recent removing of the "limit 1" restrictions.

I've pretty much stopped ordering from CyberRebate after their prices went from 2 to 3 times normal to what seems to be 6 to 10 times. Just too much to risk and too much $$$ to be out for 4 months for my budget. If the pyramid crashes, I don't want to be at the bottom of it!

[rum]

Shit they better not go down. I want my rebate checks.

[calng]

Originally posted by ImInGod
I agree. 3 months may even be too little. The one rebate I've received from them (out of about 6 orders) took closer to 4 months. Well, somewhere in between. But anyway, I've long thought that the way they make their profit is by investing the money for these few months. However, after being ripped off by them for these $300+, w/o much way seemingly left to get it back, I've changed my mind partially: apparently, ripping people off is the main way they make money. As much as they must be stealing (essentially), the profit there must far exceed the profit in interest.

Well, I usually receive my rebate checks in 3-5 months as well. If you read your rebate status when they first receive your forms, it states that it will take 4-6 weeks just for them to process your forms. That's a month and a half max already. So, you add that to the 3 months, and it gets to 3-5 months. I never had any problems with them, but things are getting expensive.

[INeedAVacation]

update: The problems I recently had with three of my orders have been solved;
- two orders had an itme in each which was "pending further information" which when I clicked on it originally it was blank where it was supposed to say what info. I was missing. I called and the rep. said I was missing the rebate codes on the outside of each of the two envelopes (highly unlikely since I do all forms on my computer at the same time). But anyway, she said I could just fax them the forms. I did and a few days later I looked at my account page and it says I was missing the UPC for both of the products! I also e-mailed them right before I talked to the rep. the first time and I noticed I had a reply to that e-mail; it said that the reason it said pending was because of a computer error which would be fixed soon. I called again and explained how I was concerned because I had received three different stories as to the problems with those rebate forms. The rep. apologized for the run around and said that I could check the status of the forms online now and that they should show that the forms are "completed" and have check mail out dates. I was AMAZED and said thank you and went to my account page and sure enough they have mail out dates for both orders!

- the third order took a few more days but appears to really have been some glitch in the system which ironed itself out (which may have been what their e-mail was explaining even though I directly asked what was up with the other two orders).

Summary:
It took a little while but with a little persistence it looks like they cleared up the problem pretty quick! Two thumbs up for the way they handeled it!

Oh yeah, also, they send out rebate checks ABOUT THREE MONTHS FROM THE DATE STAMPED ON THE ENVELOPE SO IT DOES NOT MATTER HOW LONG IT TAKES FOR THEM TO OPEN THE ENVELOPE!