CyberRebate

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.

Product

The company sold items at grossly inflated prices, as much as 10 times the list price, but promised customers a 100% rebate.[1] The company relied on the assumption that 50% of its customers would neglect to apply for their rebate.[2][3][4]

History

Joel Granik, Joseph Lichter and Athan Vadiakas started the website on May 16, 1998. By November 2000, the company claims to have rebated $39 million to its customers.[5] In January 2001 it was the #3–ranked online retailer in the United States and had 7.7 million web users per month.[2][6] In February 2001, before the existence of smartphones, the company provided access to its products on mobile phones.[7] The company filed for chapter 11 bankruptcy protection on 16 May 2001, citing $83.3 million in liabilities and $24.5 million in assets.[6] Approximately $80 million was due directly to customers in unpaid rebates.[2] 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.

References

  1. ↑ Dineen, J.K. (May 18, 2001). "CHARGE CYBER SCAM HIT BUYERS FOR $80M". New York Daily News.
  2. 1 2 3 Edmonston, Peter (May 18, 2001). "CyberRebate's Plan Costs Web Buyers Some Big Bucks". Wall Street Journal. (subscription required)
  3. ↑ Edmonston, Peter (February 26, 2001). "CyberRebate Bucks the Trend, Betting Its Future on Freebies". Wall Street Journal. (subscription required)
  4. ↑ Blank, Christine (May 29, 2001). "No More Checks From CyberRebate". DM Digital.
  5. ↑ "Free gifts at CyberRebate". CNN Money. November 20, 2000.
  6. 1 2 Livingston, Brian (May 18, 2001). "Millions vaporized in CyberRebate collapse". CNET.
  7. ↑ "CyberRebate.com, Inc.(TM) Selects 2Roam, Inc. to Extend Online Shopping to The Wireless World" (Press release). PRNewswire. February 13, 2001.
  8. ↑ Tan, Shannon (July 23, 2001). "Failed company provides expensive lesson in online-rebate risks". Baltimore Sun.
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