I think it should fit in perfectly in "Got Deals"
As Cash-Back Offers Multiply,
So Do Obstacles for Consumers
By JANE SPENCER
Staff Reporter of THE WALL STREET JOURNAL
Companies are offering record numbers of mail-in rebates on everything from shampoo to shotguns. But try actually getting one of them.
To move merchandise in the tight economy, companies have spun themselves into a rebating frenzy. The pace of offers has picked up in just the past few weeks: Amazon.com is in the midst of a "40 days of $40 rebates" promotion, and Gateway, Apple, eMachines and Compaq just jolted the PC market with a slew of new offers.
But the surge in rebate offers, combined with some changes in the way they are processed, is making it harder than ever for you to collect. The rebates are often contingent on a long and sometimes onerous list of terms, some of which are written in small print on the backs of rebates forms. On top of this, many companies now subcontract rebate processing to firms that then do their own subcontracting, making it that much trickier for customers to track missing checks.
Sony, for example, initially turned down more than 25% of applicants for a $100 rebate on its Vaio laptop for failing to meet the conditions. Microsoft is currently promoting a $300 rebate on a $549 Visual Basic software upgrade -- but to qualify, customers must have the cardboard box that the original software came in -- a tall order since many first purchased the product in 1998. (Microsoft has loosened the policy slightly, but hasn't changed the wording on its rebate form.)
State and federal regulators are starting to crack down on misleading rebate offers. Florida's attorney general recently filed a complaint against CompuServe for failing to pay $400 rebates to dozens of customers who had signed up for three years of Internet service. Texas settled with CompuServe over the same issue. The Federal Trade Commission has taken action against several electronics makers for routinely paying out rebates months late. They include Memtek Products, which makes Memorex disks, and UMAX Technologies, which makes scanners. In the past year, complaints lodged with the Better Business Bureau against TCA, which processes rebates for CompUSA and Microsoft, have doubled.
WHERE TO COMPLAIN IF YOUR REBATE DOESN'T ARRIVE
www.PlanetFeedback.com They'll help you write a gripe letter and forward it to the company. Plus, you can send copies to lawmakers.
www.NAAG.org/ National Association of Attorneys General Find your state attorney general's contact info, and call in a complaint. AGs will take action if they see a pattern.
www.FTC.gov/ The Federal Trade Commission File a complaint on line or call 1-877-FTC-HELP.
www.RipOffReport.com Share your horror story with other irate consumers. The site's caustic editorials will feed your rebate rage.
And that's just the more-established companies. In March, New York's attorney general warned consumers about Web retailers that sell at inflated prices promising generous rebates. One such site, CyberRebate.com, filed for bankruptcy-court protection, owing customers $90 million in rebates; one particularly exuberant shopper is owed $90,000.
Of course, to some degree companies that offer mail-in rebates have always banked on your laziness. Only 5% of offers are claimed by consumers, which allows companies to advertise low prices without having to absorb the cost of a flat-out price cut. Claim rates rise with the value of the rebate, but even on electronics, redemption rates are still only 40% on average, according to BDS Marketing.
Despite the low redemption rate, companies routinely reject applicants for any violation of their strict "terms and conditions." On one of Sprint PCS's latest promotions, the fine print stipulates that customers must have a "preferred credit rating" to qualify. Failing to write in the date of purchase (even if it's printed on the receipt) or sending a photocopy of the receipt can also be cause for rejection on many rebates.
Part of the problem is that many companies aren't equipped to follow through, says Michael Dershowitz, a senior attorney at the FTC. "They don't realize the demand they're creating," he says.
Serial outsourcing can also lead to quagmires. Last month, Bryan Turner, a 34-year-old San Francisco resident, attempted to track down a $40 Nokia phone rebate he sent away for last September. He soon found himself in a puzzling e-mail dialogue with Nokia customer service. "We at Customer Care NokiaUSA do not have any authority regarding rebates and promotions," read one e-mail.
Mr. Turner's rebate, for a Nokia 5165 phone, was being handled by Young America, one of the nation's largest rebate fulfillment centers, located in Minnesota. Since Young America handles upward of 20 million rebates a year for dozens of clients, mix-ups are inevitable -- and in Mr. Turner's limited experience, not unusual. Both his roommate, Rob Peacock, and his roommate's mother, Catherine Peacock, had similar problems with the Nokia phone rebate.
A Nokia spokesman says that 97.7% of qualifying applicants received their checks on that promotion within seven weeks; he says 15% of applicants were rejected for failing to follow the offer terms.
Certain fulfillment houses have particularly abysmal records. TCA in New Rochelle, N.Y., has an "unsatisfactory" record with the New York Better Business Bureau, which received 109 complaints about TCA in the past 12 months, versus 44 in the year-earlier period.
Peter Kuehnel of British Columbia isn't surprised. When he tried to cash a $15 check last month issued by TCA, it was returned -- for insufficient funds. "Then the bank charged me a $3 returned-check fee," he says. The check was a rebate for 256 megabytes of Kingston Technology RAM that Mr. Kuehnel had purchased.
TCA calls Mr. Kuehnel's experience "a fluke," and says the company accidentally bounced 200 checks last month because of a technical glitch. The company has promised to re-issue all checks.
Write to Jane Spencer at [email protected]