A CyberRebate Christmas – $1,000 Coal in Your Stocking

If Santa went for the same gambit as some online shoppers this year, then come Christmas, you may be the recipient of a Monopoly game that cost St. Nick a cool hundred bucks.

Pretty interesting, considering that most stores, offline and on, sell Monopoly for about US$15. Such is the effect that CyberRebate will likely have on the holidays this year.

You remember CyberRebate. That was the fine site that sold people items at outrageously expensive prices, with the promise that an outrageously generous rebate would come. That was a promise they delivered on for some time — right up until the time when they couldn’t anymore.

It was May of this year, to be exact, that CyberRebate ran to a bankruptcy court on Long Island in New York for protection. And it’s no doubt starting to dawn on some of the forlorn CyberRebate shoppers that they might as well give away the goods they paid so much for.

Heavy Duty

CyberRebate’s original bankruptcy filing said it owed $80 million to about 200,000 consumers, and it’s likely that more claims have come in since.

By all accounts, the CyberRebate filing has created an extra heavy workload for the court, which even set up a separate link on its home page for the CyberRebate case. No other current bankruptcy filing gets that treatment.

It will likely be a while, a good long while, before the court figures out what to do with CyberRebate. But some of the consumers, whose high hopes somehow prompted them to spend $2,000 on a $200 printer, aren’t waiting around for a bankruptcy judge or Santa Claus to save the day.

Beautiful Dreamer

Last week, the Boston Globe carried the story of a man who has filed claims with two of his credit card companies seeking reimbursement for the rebates he was owed. This particular man — attempts to reach him weren’t successful; his phone number’s not listed — claims that he only extended himself the way he did because he believed without question that his credit cards would back him.

In other words: He was playing with house money. And quite a stack of it to: He claims he’s owed $90,000 in rebates. And he said so far he has kept the items in their original boxes, just in case CyberRebate suddenly decides to accept returns.

But a funny thing happened when he went to the window to cash out with his credit card company — to pass the buck as it were. The people at the American Express window tried to pass the buck, too.

No Thanks

Those AmEx folks reportedly told the man thanks for asking, but no thanks. As far as they’re concerned, there were two transactions: One in which the consumer paid for the merchandise, and the rebate transaction.

The credit card company says it backed the first one, which in almost every case went through. The second transaction, well that’s a bit of a gray area. And an expensive one.

But the fun doesn’t stop there.

Tax Season

Other CyberRebate victims say they’ll donate their items to charity. But of course, they can’t deduct the absurdly high price they paid, can they?

I suppose they can try, meaning the Internal Revenue Service will hold the passed buck, at least for a while. Whether the buck lands back in the laps of the CyberRebate founders, whose genius made all this possible, remains to be seen.

In the meantime, why shouldn’t their customers feel the joy of giving this holiday season. Time for them to swallow hard and give a $200 DVD to their nephew. It might bring a ray of happiness into an otherwise bleak situation.

What do you think? Let’s talk about it.

Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.


  • This story is full of beautiful sound bites, but the author has not addressed any of the underlying issues.

    Amex has treated Cyberrebate as a special situation. They have failed to honor the price protection clauses of their credit cards because in their words – the purchase comes with a rebate. They can’t have it both ways, can they?

    Also, Cyberrebate had a 30 day no questions asked full money back return policy. If someone makes a purchase and that guarantee is not honored, what is the role of the credit card company?

    Some people also received refurb items, not new ones. If someone received a defective item, is there any recourse under present laws with Credit card companies? Or what if one thought that they were getting a new item and were then given a refurbished item?

    At least the Boston Globe item was honest that “there is little case law in this area, adding that the matter may have to be settled in court”.

    • The deal will soon be made -if it has not already-between the secured creditors comittee and the unsecured creditors committee. Paymentech gets approx $5million from CR + $4million of CR’s money it already has. The unsecured creditors (people who are owed rebates)get 10 cents on the dollar. Once the 10 cents on the dollar is paid out, secured creditors, employees, and lawyers will swoop down for the rest.

      Look for your checks in Late December

      Happy Holidays!

      • Visa and Mastercard, especially Juniper Mastercardm have done a good job of protecting their customers. American Express and Discover card have taken their money and profits from the merchant and turned their back on their customers. American Express has even refused to credit customers who ordered in May, the month that Cyberrebate declared Chapter 11. Some of those customers have never even received the merchandise and still AMEX has declined to protect them. The only way to get AMEX to follow the LAW is to sue them. The only people who have gotten a dime from AMEX took them to small claims court. AMEX is the worst CC out there – consumers beware!

        • I’ve included my email address this time.

          I don’t know how IRS would hold the “passed buck” – even if one assumed that one could “deduct the absurdly high price one paid” this still means that one is left with most of the loss. The IRS would pick up 28% (or whatever your marginal tax rate is) of the tab, you’d still be left with 72% of the loss.

          • As the subject of the Globe article, I have attemtped to contact the author to answer any

            questions he may have had for me, but he hasn’t responded. So much for ME being unreachable.

  • The other side of this fiasco is that a consumer’s choice of credit card is the deciding factor in whether they are recovering from the beating Cyberrebate gave them or if they are now being ripped off by the credit card company. American Express & Discover both promoted Cyberrebate and had no problem collecting their fee based on the 10x markup that Cyberrebate charged, but now they want to act like it was “greedy consumers” who are the “guilty” ones.

    Mastercard & Visa International are, for the most part, giving customer chargebacks and acknowledging that Cyberrebate was nothing less than cyberfraud.

    Shame on American Express & Discover.

  • Have to say that Credit Card companies need to eat the promises on’s bankruptcy. They’ve put a lot of financial pressure on many families by doing business with these slimy crooks. Reg Z specifically states that items that were agreed upon at the time of purchases. You should do a follow up on lawsuits now!!

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