Business

problems with rebates, rebate processing issues
Ted S. Warren/AP
Costco is a client of Continental
Promotion Group, Inc.

Company’s Bankruptcy Means Major Retailers’ Rebate Checks May Bounce

December 19, 2008 08:58 AM
by findingDulcinea Staff
As holiday shoppers try to take advantage of sales and rebates as a result of the economic downturn, a major rebate processing company has filed for Chapter 11.

Rebate Company Files for Bankruptcy

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Continental Promotion Group, Inc., which works with major clients such as AT&T, Barnes and Noble, Bed, Bath and Beyond, Costco, the Home Depot, Honeywell, Macy’s Inc., Motorola and Toshiba, has filed for bankruptcy but is still trying to make good on the rebate checks it processes.

“We are working with our clients to the extent possible to assist with the honoring of consumer rebate checks outstanding prior to the bankruptcy filing or providing alternate direction to consumers,” the company said in a statement.

Continental and its parent company, CPG Marketing Inc., filed for Chapter 11 bankruptcy on Nov. 14, leaving the status of “several million dollars” in rebate checks for 300,000 customers in question. The company says it will cover rebate check costs by borrowing money from its client companies, which have agreed to advance CPG the funds, according to court documents.

Meanwhile some of the company’s several hundred clients are taking swift steps to protect their customers, and to find someone else to process their rebate checks. Costco says it will cover CPG checks and any related fees its customers may encounter. Other companies, such as Best Buy, are starting to issue rebates at the time of purchase, rather than going through the mail-in process. MSN advises customers concerned about their rebate status to contact the product’s manufacturer or the store where they made their purchase.
Continental may be one of the biggest rebate processing companies in the country, but it’s not the only one struggling. In Omaha, Neb., TV station WOWT reported Wednesday that area businesses are becoming increasingly frustrated with rebate provider Cashback America, which recently went out of business. The Florida attorney general’s office says that there have been more than 1,431 complaints against the Florida rebate company, which has been returning rebate requests to senders and is now under government investigation for “misrepresenting to merchants the amount of money available to cover rebates.”

Amy Daniel and Stephanie Luetkenhaus bought a treadmill for about $1,500 at a local exercise equipment store and expected to collect a rebate. They told WOWT that they had to read several pages of fine print, and then wait three years for their check. “Who is going to remember paperwork in three years?” Luetkenhaus said. The owner of Nova Fitness Equipment says that, although he paid $44,000 to Cashback America to cover rebates, he has been unable to make contact with the company. “The money which I paid in, I have no way of seeing those rebates sent to my customers to make them happy customers,” owner Howard Kutler said.

Background: “Circuit City Bankruptcy Casts Shadow on 2008 Holiday Retail Season”

Electronics retailer Circuit City declared bankruptcy in November after 59 years in business, foreshadowing a dismal holiday season for retailers notwithstanding their trouble with rebate collection. The nation’s second-largest electronics retailer filed for Chapter 11 bankruptcy in Virginia on Nov. 10.

Reference: Bargain shopping

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