CyberRebate’s Real Victim: Common Sense

There’s an old saying about kicking a person when he or she is down, but I can’t remember how it goes, so here is my take on the people who are crying over the thousands of dollars in rebates they never got from You got exactly what you deserved.

Frankly, it’s beyond me how the deal ever sounded like a good one, or more to the point, one that could be sustained long-term. The temptation for free or cheap stuff must have been strong, but paying up front? How many things do you pay extra for up front on the promise, made by some invisible person behind a fancy Web site, that you’ll get it all and more back.

This is not to deflect blame from the brain trust at CyberRebate. The word now is that its business model counted on a number (a large number?) of people not ever applying for rebates. It’s safe to say they misread human nature.

Nor is it worthwhile to poke fun, without any purpose, at people who are out a lot of money.

But the level of scrutiny applied to CyberRebate’s business model, by both its creators and its consumers, typifies why so many e-commerce companies have had to die painful, public deaths. Common sense went and took another vacation day.

Lured In (Like Fish)

The fact is that CyberRebate worked, for a while. And another fact is that many of its consumers were smart enough to be skeptical initially, giving their trust over to CyberRebate over time and not all at once.

They bought small items and held their breath. And when the rebate checks appeared in their mailboxes, they felt the warm glow of getting a bargain and the smugness that comes with thinking they’re better than everyone else.

Then they got greedy. And then, finally, they got their just rewards.

Sound familiar? This is of course the classic tale of e-commerce as the initial bubble grew and grew and grew and then burst. Everyone who got a small nibble wanted more.

Slow-Motion Replay

Venture investors who had one successful IPO wanted a dozen and threw money around to make it happen. Private investors chased stocks up beyond reasonable levels, fueled by jealousy toward their neighbors who bought Amazon a week after it went public.

And e-commerce companies spent blindly in much the same way: Remember the old belief that regardless of how much you paid to acquire a customer up front, it would be worth it in the long run? Does anybody still believe that?

Of course, it’s human nature to hope, and so hoping that a US$50 rebate check will lead to a $500 rebate check is one thing. To actually count on it happening, though, is something else.

Make Someone Pay

Already, however, the cry has gone up to make someone else pay. The credit card companies should take responsibility, some have argued. After all, they pick up the tab when someone gets ripped off, or in some cases, even when something gets damaged or stolen.

But that didn’t happen here. Frankly, I’d like to see one of the red-faced rebate chasers go before a judge — or better yet a jury — to explain why they paid $1,500 for a printer that could be bought elsewhere for $150.

There is another saying that I remember pretty well and in totality: There’s no such thing as a free lunch. To believe otherwise requires a certain level of self-deception. And to blame anyone else is to refuse to leave that dream world even after it crumbles.

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.


  • I’m sorry CyberRebate went out of business. I did over $2000 worth of business with them last Christmas and got all of my rebates. Sure I paid $249 for a headset a local discount department store sold for $19.99, but floating the charge on a low or no-interest credit card was not a problem, and the merchandise was okay stuff that I was not at all embarrassed to give as gifts. I wish they would work out the bugs in this type of business and go back on-line.

    • I found out about this article at the MSN Community:

      A poster at the MSN Community pointed out that the author of this article did a piece:

      in which he claimed that “E-Commerce Bubble in No Trouble” so I wish that he would have emphasized the implications of the CyberRebate debacle for B2C e-commerce rather than “beating up” on its “victims” but as the saying goes: “Hindsight is 20-20”

      I have a good deal more respect for Tim Picks and Brian Livingston, who saw this “runaway train” coming BEFORE it crashed!

      • It is wrong to blame the victim of any crime and state “they got what they deserve”. Nobody deserves to have their money stolen.

        I do not view this in the same light as gambling. This was assured as a “risk free” process. Where is the gambling in “risk free”? This site was also endorsed by numerous Internet rating sites.

        I do hope that the company and its owners are prosecuted for their fraud.

          • I was raised to live beneath my means and became quite savvy regarding rebates, coupons, etc. I followed all the CyberRebate rules and only increased my order size after testing the waters with a small order. I AM a student who was not greedy, but rather, trying my best to be as frugal as possible. My tuition is over $25,000 a year and by the time I finish graduate school I will be over $100,000 in debt, and CR provided a way to lessen my debt, or so I planned. I was able to purchase needed items and gifts without blowing my budget. Shame on you for making fun of victims of CR!

          • Where I get confused in all this is the way CR buyers feel that they are in some way a “victim”. Looking to blame someone for your problems seems to be the American Way.

            Here’s the truth: People at CR thought that with enough cash on hand, they could float currency in various money markets, making more than enough on short-term plays using the huge cash flow to compensate for the need to buy and sell stuff.

            You buyers from CR knew you were playing hyper-inflated prices, but you thought you were getting “something for nothing” in the transaction. Well, as you all know, there’s no such thing as a free lunch, and the end of CR brings the point home so well.

            In the end, you need to stop and think – does it seem “too good to be true” – then it is.

            Buying from ANY company by mail, phone or Internet involves some risk – I mean, look at JC Penney – they are going broke and it would not surprise me to hear that they go away soon. Montgomery Ward folded a while back too. What happened to the customers who bought from them and now can’t return a broken item? Do they sue the mall that the store was in?

            In the end, life is a balance of risk & reward. The further you go on the risk side the greater the reward, but the more you have to lose.

          • Oh yes, mr. smarty pants thinks he knows it all…plenty of smart people bought into Cyberrebate believing in their business model (thinking they were making 4% on their money in short term CDs). We were all doing a little loan-sharking for free merchandise. Hey, it worked for a long time, and those damn testimonials on the site worked well, too, as did the BizRate endorsement.

            I hope the author experiences something similar in his future…I hope he researches what seems like a good thing (perhaps a car purchase) and ends up with a big fat lemon. Think he’ll be making lemonade? Not likely…and then I hope somebody gloats over his mistake instead of tsk-tsking the corporate giant responsible for his pain.

          • I’ve never bought anything from CyberRebate, always resisting the advice of a friend who is now out 10k. However, there are more than a few things wrong with your smug argument.

            For one thing, how is buying something from CR different from getting a toaster from a bank for starting a savings account? These people were not purchasing overpriced merchandise but getting DVD players and Palm Pilots for the loan of their money for 10-14 weeks. How is that different? The site was endorsed by BizRate, CNNfn, and The Wall Street Journal. Since when is it stupid to take their advice?

            It’s so easy to laugh now, isn’t it?

          • Let me unconfuse you Thomas. (Disclaimer: I have never bought anything from CyberRebate nor did I plan to).

            People did not feel they were getting something for nothing. They loaned their money to CyberRebate and in return got merchandise. Losing the use of your money and interest for 10-12 weeks is not a free lunch.

            Sure, S&L’s closed too and stole people’s money, but admit at least that people have a right to be angry that their money is gone due to someone else’s bad business plan.

          • Does anyone have the hard numbers on the savings that were supposed to come from CyberRebate? I’m curious to know how they compared to a simple CD account or other conventional investment paths.

            I mean, if you’re going to spend $1500 for a $150 product, even assuming you were going to get the money back, was it really that much smarter than putting the money in the bank? Especially if, as people seem to be saying, so many CyberRebaters were in tenuous financial straits to begin with.

            I don’t know the hard data, so I’m asking – not trying to show hindsight.

          • As an internet consumer, I search for value, attempt to research products, do price comparisons, and make an attempt at being an educated buyer, yet when a product search brought me to CyberRebate I must have missed the fine print on the price markups.

            I was looking for a mini cassette and disk player and the product they described and pictured seemed in the ballpark for what I had been seeing. I remember wondering how & why companies were making such offers. I thought market research was involved or they were new product trail blazers. I even thought about the money warehousing tie-in. But at the time I couldn’t find any complaints to deter me – so I gave it a try.

            When we received the product it was so inferior to our expectations (and the cost since I didn’t know about their markup methods) we decided we didn’t even want the thing for (eventually) nothing and returned it for a full refund (luckily!).

            I don’t consider myself an easy mark, therefore I have to conclude that CR customers are victims and you are being way too hard on them.

          • The comment about Montgomery Ward obviously comes from a person who awoke one day to see that MG went out of businesss. But that person must have been in a coma for the few weeks before when MG posted that it will be going down the highway of bankruptcy before it closed its doors. This allowed people the opportunity to return merchandise for a full refund if they felt they needed to before the stores closed. It sure would have been nice if CR and other e-commerce companies would have the same rules and morals.

          • David,

            Those who take risk make the world go around. Those who sit on their a$$ and watch others take a chance and sometimes fail and then jump all over them are a dime a dozen.

            Laws exist to protect those who purchase with credit cards and are misled. You can count me as one person who will be using these just laws to obtain my justice. You, well, you can sit and wait until the flowers smell just right so you can get off your keister. Ergo, risk is good and calculated risk, as in this case, will pay off.


            Edited by moderator for TOS issues.

          • Well, I guess we should all stop purchasing thigs at,,, etc. because after we pay them for the merchandise that offers “free after rebate” as they all do on certain items certain periods of the year, it will turn out not to be free and they are just as slimy as CR. So your intellectual remark that “ordering online is one thing, and a good one I believe” is not very good!

          • So I suppose if someone walks into CompUSA and buys a hard drive with a $100 rebate and they never receive it, they have gotten what they deserve. The fact is, CyberRebate offered these rebates as part of the purchase. If they don’t fufill their obligatation, then they have engaged in false advertising. They claimed they made enough money by collecting marketing information to pay for their business, which was obviously false. They knew they were going under, but still took orders right up until the last day. Never did I see any disclaimer on the CR site stating rebates would not be paid under any circumstances other than failure to properly submit the required documents. If CR was using the money for unsecured speculation they should have been up front about it. Every prospectus I have ever read for an investment where the money may be lost contains a disclaimer stating that there is risk involved. CR failed to inform its customers of any risk, and I feel has therefore committed fraud.

          • I AM also appalled that e-commerce Times allowed such an article to be published.

            I AM one who is very sceptical about feebies on the Internet. But I tend to trust sites that

            have established and well-known partners. I AM not residing in U.S. but I happen to come across

            this website. Now I AM glad I did not encourage my U.S. friends to try this site.

            I do not think it was a free lunch. The buyers pay to CyberRebate up front and their money is with CyberRebate

            for however long it takes for them to get back the money. Interest, if the money is put in bank, and opportunity

            cost are involved. Rather than researching into why CyberRebate has collapsed and what can be done to prevent

            such cases from happening againt, the author actually says that consumers are greedy and got what they deserved?

            Please show some respect for normal people like us, who likes to go for bargains,

            and also have some faith in those sites that truly offers good bargains.

          • Second guessing is not getting me anywhere? That is like a Monday morning Quarterback? Advertisements were everywhere and checks were coming in. If they were in trouble, if the credit cards knew it (mine told me they knew trouble was coming) why didn’t someone tell me to send the stuff back? That again is history, what is our next step? Does anyone think we will recover anything?

          • But ultimately who should pay? The consumer that got scammed or the credit card company that floated the loan so that the consumer could attempt to make money for nothing? The rules that protect credit card users do not extend to business ventures. So who should pay?

          • Where is the calculated risk in something for nothing? Try W-O-R-K. Anything worthwhile takes EFFORT, and to believe otherwise is immature and lazy. I AM in favor of taking risks – I’ve lost tens of thousands of dollars on business ventures, etc. But the failure was always MY responsibility, because I didn’t do something – not because the vehicle I chose to believe in failed me. I did my homework, and there was no one to blame at the end of the day but me. How much research do you think all of the ‘victims’ (consumers) spent checking out this business model? I would say “I wonder…”, but it looks plain to me that we all know how much homework you all did to get scammed so easily…

          • Come on people, these types of Pyramid schemes have been around hudreds of years before the web. If it’s too good to be true, it usually is. Buyer beware at all times, whether at a traditional brick/mortar or online. Although I feel for those who have lost money, maybe a lesson will be learned in the future that money truly doesn’t fall off trees… PT Barnum said it best “There’s a sucker born every minute.”

          • “Stir emotions and get readership”?

            Now, why would he want to do a thing like that?


          • Who’s going to pay? The customer! Not only for merchandise that was guaranteed a 100% rebate while they were using your funds for 3-4 months but also huge interest payments to credit card companies that must have seen this coming. You played right into the the cc’s hands. As someone that works with patrons that use the internet, this is quite disturbing to me because customer trust in online purchasing was just beginning to be displayed. Now that trust will be eroded and all online companies should be supporting the CR consumers that will pay such a high price for placing trust in online businesses. I would imagine that most of the CR customers also purchase from other major internet companies. The main question I have is why isn’t this being reported by the mainstream press? What’s up with professionals that are supposed to warn consumers of possible fraud by businesses? Why do many of you use hindsight as your weapon now that we all know the crooks that ran CR?

  • I feel like I’ve been to Vegas and back. It’s generally a loss. It’s true that it feels like a violation of trust with what happened with Cyberrebate. I managed to get most of my credit card charges reversed. With a mounting debt of about $15,000, I managed to actually lose about $1800. Probably a little less than twice as much what the products were worth. It was an uphill battle gathering documentation and writing claims. I thought a great deal about how Cyberrebate planned to profit by having the money for six months. I finally convinced myself that they were putting the money into CDs that were yielding enough money to pay wholesale price of the product and more…. Obviously not!

    I think that there is a way to make the free-after-rebate business succeed, but it would involve customers waiting a longer time to get their refund.

  • Skeptical when first saw CR site – suspected con. Decided to “test the waters” 10 m ago w 2 purchase – $375 I could safely lose. Got rebate in 3 m. Almost ordered LOT stuff – tried order today – found out they are ch 11. Agree about if I ordered more and lost it I would deserve what I got. “IF SOMETHING SOUNDS TOO GOOD TO BE TRUE, IT PROBABLY IS.” Need to be discerning.

  • Mr. Regan – I was very careful when I began purchasing items from last Spring. My first purchase was a Hamilton Beach Coffee Maker for which I paid 99.95, a figure I knew was 2 to 3 times its value. 14 weeks later I received the check so I ordered 4 more times spending $100 – $200 per order. I heard complaints about Cyberrebate but always got my checks. When you have that experience so many times, don’t you think you develop trust of the their “no fear rebate process”.

    So I bought a lot more and AM out a lot of money. I’m not overly angry because I knew there was risk and I have the money to cover my losses. It’s a shame Cyberrebate can get protection under the law and their customers have none. I do think fraud was involved because of the timing of promotions and bankruptcy date.

  • I find it pretty funny that I AM not able to locate my post or “letter to the editor” regarding Mr. Regan’s article.

    Hmmm….I would think that since Mr. Regan gets to post articles on here about us ripped-off cyberrebate customers, that we would at least get to post something in defense of ourselves and the article. Guess not. I thought that members of the media believed in “free speech?”

  • To the article author

    Why didn’t you write this two years ago. You seem pretty smart now.

    I checked on the net for bad information about CR and found very little and most problems were rectified. The NY Attorney General investigation was not reported and they fined CR a small AM ount and let them continue. Look at the fines the credit card companies pay and they still continue in business.

    CR was well rated by many rating companies.

    If you don’t think the CC companies share the blame think about how much money the CC’s made off the CR business. Ten times the commission on one item and interest and late fines and now more interest. Why didn’t the CC’s investigate. I thought the CC’s were responsible not to be involved with scams.

    I don’t know if this was a business plan gone way wrong or a scam, but with most scams it effects the most vulnerable people.

    The CC’s are going to have to pay for this one. Spread over the different banks 85M is little compared to what the CC’s penalties are in class action suits.

  • (Cont. from previous reply)

    – Your take on this story is most AM ateurish at best, and dangerous at worst. Especially writing for an eCommerce news organization, your primary concern should be the fact that this is the first mass-scale consumer eCommerce collapse, not to make poorly thought out comments. If you let Cyberrebate get by this time, what prevents Amazon,, or even eBank from going down, leaving their customers holding the bag?

    Reconsider your position and rethink this issue more clearly. Just because people went for a good deal they are now allowed to be humiliated and defrauded en masse! Shame on you.

  • – Cyberrebate was a partner with many reputable web sites such as Yahoo and others. They had glowing reviews and references on The Wall Street Journal,, and CNN AM ong many more. They advertised everywhere on the net and carried ads on their web site almost exclusively for American Express Blue card. They were the third most visited web site on the net. They were investigated and cleared by the government as late as March.

    If these organizations were deceived by and collaborated with Cyberrebate, how can you blame the consumer? If anyone is to blame it is people like yourself and your employer whose job was to keep an eye on and protect consumers (and eCommerce in general) from the likes of Cyberrebate.

    – Consumer laws (for credit cards AND for rebates) already in place call for protecting the user against deception and unfulfilled agreements between the seller and the buyer. What we are calling for is the application of these laws. If the prices charged by CR were MSRP or 1-2 times as much, you may argue that we “overpaid” and were taking a chance. But when you pay 10 times MSRP for an item, it is clear & without doubt that the rebate was a non-negotiable part of the sale agreement.

    (cont. in next reply)

  • You ‘victims’ crack me up. Take responsibility for your actions, however justified they may have seemed at the time. The truth is, you were all looking for ‘something-for-nothing’ and got burned. Ordering online is one thing, and a good one I believe. Trying to get something for nothing is another. Doesn’t the general public understand anything about economics? Someone pays for this stuff. Who did you think it was going to be? Were you led to believe advertisers? I had a friend approach me about this program a couple of months ago, and it just smelled bad. Turns out my nostrils are still good. Don’t flame the author because you feel so stupid for being duped. The Internet hasn’t changed anything, just how we get the same old products we’ve always wanted. Did you actually believe money grew on the Internet? Hmmmm….

  • I think it is mean-spirited and harsh of this author to attack consumers who bought into a business model that was sanctioned by many existing companies as recently as last month. And before this blow-up, a lot of people *did* get rebates.

    This is kind of like blaming the victims in a bank or credit card fraud scheme — they’re just unlucky people who could easily be you. You never know when someone is going to take you for a ride; don’t belittle those who happened to get stuck on this one.

  • I AM AM azed at your audacity to tell us we got what we deserved!!

    Easy for you to say since you can change your tuned from ecommerce being “a bubble that can’t burst”

    To blaming this “impossible” bursting on greedy neighbors.

    I’m very sorry for being “greedy” and making purchases from a website. The next time I receive email solicitations from ecommerce sites I will respectfully follow your advice and email them back saying, I’d like to take part in your sales you advertise, but I don’t want to be too “greedy” and burst your bubble. I’d like to order your merchandise at the prices you advertise, but I’ve been scolded for doing such a crazy thing before!

  • So what the author is effectively saying is that he knew all along that cyberrebate was a scam, but he chose _not_ to alert consumers about this, and instead wait for the cyberrebate to go bankrupt making 200,000 people poorer by ~60 million dollars so that he can now kick them when they are down. Now, that’s using the power of press wisely 🙂

  • I read the author’s article and I wish that he was cyberscamed so he could understand where we are coming from.

    1. We are not trying to fraud the CC companies. They are there to protect us. I think after paying a $29 late fee for being one day late… they can fight for our right to fair products and services

    2. 16.9-23.9% is fair?

    3. No interest cards get offered to me every WEEK!!! It made me think…I could charge this cyberrebate crap… and then pay back the credit card company with no harm done..yeah!

    4. No one on this entire board in their right mind would pay $200.00 for an electric toothbrush or $2499.99 for a MP3 player. What made us purchase this stuff was the ability to receive a guaranteed 100% rebate. My cost free! Who’s gonna pass this offer up as long as you follow through on all the paperwork

    5. This is not only an information board but also a support board where we seek comfort and help from each other. There is no need to rub it in any more because as I write, as I sleep, as I wake, as I work…all I think is the debt I owe. This was an emotional roller coaster in the beginning but as I now catch my senses..I realize I must fight for my right and rights of other. We must protect ourselves from future scams and protect the vitality of the internet.

    Please don’t hate us. We are only human and being human we make mistakes, learn from our mistakes, and try.. try again.


    Marc Bayram

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