The pitches are irresistible: Get a $100 hard drive for $30 after rebate. Score the latest $150 cell phone with digital camera for nada. Make $10 by mailing in a rebate form for virus-protection software.
..................................
Now, nearly a third of all computer products and 20% of electronics, such as digital cameras and flat-screen TVs, are sold with rebates, according to the NPD Group. In part, that's because only an estimated 50% to 70% of buyers redeem them.
But these discounts are not always the sure bargains that consumers think they are. Many manufacturers and retailers have come under scrutiny for delaying payment, imposing hard-to-fulfill restrictions or making forms too complex -- and therefore, too easy to reject.
In Vic Giannini's case, the rebate check came, but it couldn't be cashed. The Akron, Ohio, retiree received the $45 rebate he was promised for purchasing a Maxtor hard drive from online retailer
Tiger Direct. After he deposited the check, he got a notice from his bank, stating that the account with Tiger Direct's fulfillment house, Onrebate.com, could not be found. To make matters worse, the bank charged him a $25 fee for processing the invalid check.
"Then I was out $70," Giannini complained. He says he called and e-mailed both Tiger Direct and
Onrebate.com, and got no response.
So Giannini posted a report complaining about his experience on
www.ripoffreport.com and threatened to file a complaint with the
Federal Trade Commission, the primary agency overseeing rebate abuse. Onrebate.com has since offered to cut Giannini a new check.
"What they are banking on is (that) you aren't even going to bother," Giannini said.
.................
"They make it so you have to jump through all these tiny little hoops," said Ed Magedson, editor and founder of the Ripoffreport.com. "And then when you do, they say you didn't get it there on time."
With consumer complaints to the FTC and Better Business Bureau escalating, regulators are ramping up their scrutiny of rebates.
[/I]The FTC has fined a handful of companies for failing to pay consumers or for paying them late[/I]. Last year, it settled its first case with a retailer, Dallas-based
CompUSA, for knowingly advertising rebates from computer peripherals manufacturer QPS Inc., even after CompUSA officials knew the manufacturer wasn't paying the rebates or was paying them as much as six months late. Indeed,
the FTC said CompUSA continued to advertise the rebates until shortly before QPS filed for bankruptcy protection in August 2002.
Now, after settling with the FTC, CompUSA must advertise a specific time frame for rebates. The retailer must also bear financial responsibility for any rebates not paid during the time specified.
[
]A CompUSA spokesman declined comment on the settlement, other than to say, "We feel we do an excellent job of fulfilling rebates to the benefit of our customers." [
]
However, at least one customer says CompUSA's rebate problems haven't been solved.
Bill Rubin, a 40-year-old operations manager in Yorktown Heights, N.Y., is still waiting for $56 of the $161 in rebates he was promised last August after a $195 purchase of
Hawking Technologies networking equipment at CompUSA.
Both Hawking Technologies and CompUSA say the money is on its way -- after many complaints -- but Rubin is still waiting, long past the promised 10- to 12-week window.
"You learn your lessons from some of this stuff," Rubin said. In this case, he said, he will never buy Hawking products again and will look twice to see who's handling a rebate before making a purchase.
There ought to be a law …
"Everyone I know has horror stories about rebates," said
California State Sen. Liz Figueroa, who introduced a bill in 2004 to establish guidelines for mail-in rebates.
That bill, which would have given consumers 30 days to apply for a rebate after purchase and guaranteed payment 60 days after application, passed the California House and Senate, only to be shot down later that year by Gov. Arnold Schwarzenegger
.
However, with growing bipartisan support for rebate reform and new advisers in the governor's office, Figueroa plans to reintroduce the bill.
"Republicans and Democrats," she says with a laugh, "we all agree on one thing: We hate rebates."
Other states have also begun tackling rebate issues on their own.
One of the first to take action was
New York Attorney General Eliot Spitzer. Spitzer settled a case with cell-phone maker
Samsung Electronics America in 2004 for failing to pay rebates.
The company agreed to pay $200,000 to more than 4,100 consumers whose rebates were denied simply because they lived in apartment buildings.[ ! ] Samsung's rebate system only allowed one rebate per address and didn't have space to submit apartment numbers.
In Connecticut, state officials are now investigating several retailers that list only prices after rebate in their ads -- a practice that is illegal in the state.
Meanwhile,
Massachusetts, in conjunction with 40 other states, is taking on a company that handles rebates.
It has sued the nation's largest rebate fulfillment company, Minnesota-based Young America Corp., demanding that it submit to an audit of the uncashed rebate checks it has kept in recent years -- money known in the industry as "slippage" -- in exchange for charging its clients lower processing fees.
"There is an appearance of deception here," Cahill said. "We want to shine some sunlight on this practice. It sends a message to other firms. They are holding onto other people's money that doesn't belong to them."
............................................
Cahill says he is also "concerned" by some of the confusing forms used to deny consumers their money.
For their part, Young America officials say they have refused audits in Massachusetts and other states because they don't believe uncashed rebates are unclaimed property, a claim it says has been affirmed by the states of Minnesota and Oklahoma, where it previously had operations.
Young America Chief Executive Roger Andersen says that his company has no incentive to reject applicants to keep the money.
"We don't get any checks or funds for disqualified customers," he said.
[Huh?
]
He admits, though, that some retail clients have pushed for confusing programs that would result in a lower redemption rate.[
] "We decided that we didn't want to do business with them," Andersen said. "Anything that gives our industry a bad name…is going to erode the acceptability of rebates as a promotional tool."
Indeed, at least one major retailer, Minneapolis-based
Best Buy,
has said it plans to eliminate all mail-in rebates by 2007. Last week, the company said it was no longer advertising mail-in rebates for laptop computers and was instead offering instant savings. Best Buy also recently launched an online rebate submission tool, so customers don't have to mail in forms and UPC codes.
.................................................. ..........
6 keys to getting the rebate you earned
Contact the company if the rebate doesn't arrive within the time promised. Most retailers, manufacturers and rebate fulfillment companies have Web sites and 800 numbers where you can track your rebate and complain if your rebate stalls or is rejected. (Many customers have said that they were able to reverse a rejection or resolve a problem with one phone call.)
If the rebate never arrives or arrives late, file a complaint with the Federal Trade Commission, your state attorney general or the local Better Business Bureau.
If all else fails, set up your own Web site or post on someone else's blog to draw attention to the issue. One enterprising consumer set up
www.radioshackrebatefraud.com last month, when it looked like he and other consumers would not get the two rebates
Radio Shack promised in a one-day pre-Christmas promotion on its Web site. Several weeks and several TV interviews later, the company said it would honor both rebates, which were held up by a company input error. Radio Shack and other retailers such as Tiger Direct say they monitor many shopping forums and consumer gripe sites and will try and correct any unresolved customer issues they see.
Lastly, only buy things you can afford without the rebate. While fulfillment company Young America claims it now processes rebates in a third of the time it used to, the reality is that some rebates can be held up for months.
Linear Mode
