CyberRebate

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Cyberrebate.com, Inc. was an online retailer founded in May 1998 that went bankrupt in May 2001, after the collapse of the dot-com bubble. The company sold items at inflated prices over what a consumer could find similar items for at competing vendors, as much as 10 times the list price in some cases, but offered customers up to a 100% rebate. [1] [2] [3] The business model depended on at least some customers neglecting to apply for the rebate. [4] [5]

History

Joel Granik, Joseph Lichter and Athan Vadiakas started the website on May 16, 1998. By November 2000, the company claimed to have rebated $39 million to its customers. [6]

In January 2001, it was the third–ranked online retailer in the United States and had 7.7 million web users per month. [4] [7]

The company filed for bankruptcy protection under Chapter 11, Title 11, United States Code on 16 May 2001, citing $83.3 million in liabilities and $24.5 million in assets. [7] Approximately $80 million was due directly to customers in unpaid rebates. [4] At the time of the bankruptcy filing, there were 9 customers that were due pending rebates of $79,000-$100,000 each. [8]

In April 2005, some creditors were awarded $0.08802 per dollar of allowed claims. A second, final disbursement was made to creditors in August 2006 for $0.0006276 per dollar of allowed claims, or roughly $1 for every $1,600 claimed.

References

  1. ↑ Dineen, J.K. (May 18, 2001). "CHARGE CYBER SCAM HIT BUYERS FOR $80M". New York Daily News .
  2. ↑ GLASNER, JOANNA (May 19, 2001). "THE DAY THE REBATES DIED". Wired .
  3. ↑ "Cyber Rebate". NPR . May 17, 2001.
  4. 1 2 3 Edmonston, Peter (May 18, 2001). "CyberRebate's Plan Costs Web Buyers Some Big Bucks" . The Wall Street Journal .
  5. ↑ Blank, Christine (May 29, 2001). "No More Checks From CyberRebate". DM Digital .
  6. ↑ "Free gifts at CyberRebate". CNN . November 20, 2000.
  7. 1 2 Livingston, Brian (May 18, 2001). "Millions vaporized in CyberRebate collapse". CNET .
  8. ↑ Tan, Shannon (July 23, 2001). "Failed company provides expensive lesson in online-rebate risks" . The Baltimore Sun .
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