CNet is reporting that CyberRebate is filing for bankruptcy.
The May 16 bankruptcy filing of CyberRebate.com, a major Internet retailer that offered 100 percent rebates on expensive electronics items, leaves the company $59 million short of the amount it owes consumers, many of whom find themselves up to their ears in credit card debt.Some things just are too good to be true.
Many reporters assumed CyberRebate earned a profit by collecting interest or selling some items for less than a full 100 percent rebate. In fact, as CyberRebate CEO Joel Granick told me in an interview for the original story, the company depended on the fact that at least 5 percent of its customers never got around to sending in the required rebate forms.
CyberRebate priced its items as much as 10 times above list. If the 5 percent non-claim rate is correct, CyberRebate could double its money on each item shipped, averaged across thousands of orders.
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