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 grossly inflated prices, as much as 10 times the list price, but promised customers a 100% rebate.[1][2][3]
The company relied on the assumption that 50% of its customers would neglect to apply for their rebate.[4][5]
History
[edit]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
[edit]- ^ Dineen, J.K. (May 18, 2001). "CHARGE CYBER SCAM HIT BUYERS FOR $80M". New York Daily News.
- ^ GLASNER, JOANNA (May 19, 2001). "THE DAY THE REBATES DIED". Wired.
- ^ "Cyber Rebate". NPR. May 17, 2001.
- ^ a b c Edmonston, Peter (May 18, 2001). "CyberRebate's Plan Costs Web Buyers Some Big Bucks". The Wall Street Journal.
- ^ Blank, Christine (May 29, 2001). "No More Checks From CyberRebate". DM Digital.
- ^ "Free gifts at CyberRebate". CNN. November 20, 2000.
- ^ a b Livingston, Brian (May 18, 2001). "Millions vaporized in CyberRebate collapse". CNET.
- ^ Tan, Shannon (July 23, 2001). "Failed company provides expensive lesson in online-rebate risks". The Baltimore Sun.
