Post Holiday Rebate Scams–stores Hire Rebate Companies To Make Sure You Don’t Get $$$
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SCHUMER WARNS: POST HOLIDAY REBATE SCAMS ARE FOOL’S GOLD – STORES HIRE REBATE COMPANIES WHOSE JOB IT IS TO MAKE SURE YOU DON’T GET YOUR MONEY BACK
400 Million Rebates Offered Each Year, Almost Half are Never Redeemed because Applications are Ignored, Rebates Look Like Junk Mail or Applications Demand Impossible-to-Obtain Documentation
Senator Outlines Ways for Consumers to Make Sure they Get Rebates; Urges Federal Trade Commission to Regulate Rebate Procedures
As the holidays wind down and sale shopping ramps up, today U.S. Senator Charles E. Schumer warned New Yorkers against falling into the traps of store rebate scams, created by companies whose job it is to ensure consumers have a hard time getting their money back. Schumer today called on the Federal Trade Commission to standardize rebate procedures and outlined ways in which consumers can make sure they get their rebates.
“These rebates are fool’s gold,” Schumer said. “The promise of cash back quickly turns into frustration for consumers who can’t get what they were promised. The FTC needs to step in and regulate these practices immediately.”
During the holiday and post holiday season mail-in rebates proliferate stores, catching consumers’ eyes, as they lure them in with a the promise of a lower price while getting them to buy the product at the regular price. Now, as the New Year begins, many people are starting to send in their rebate applications for products that were purchased around Christmastime. Rebates are extraordinarily popular for the very reason that most of them go unredeemed and provide what is essentially free money to the manufacturers. Very few places offer immediate cash rebates, the most common are those that are done through the mail. Industry figures show that 40% to 60% of rebates go unredeemed. While some of the rebates are not redeemed because consumers don’t bother to send them in, in all too many cases even the most diligent consumer is unable to receive his/her rebate.
However, many companies contract with rebate-processing centers, or fulfillment houses, to pay customers' rebate requests, some of whom market themselves with their low rates of redemption. Many of these companies design complex rules, have very short filing periods or ask for documentation that is nearly impossible to obtain – all in an effort to not give the consumer their money back. The rebate companies will ask for copies of receipts multiple times or delay the rebate check for months. Applications will be ignored and consumers will have to redo the entire process. Many of the companies make the rebate check envelope look like junk mail so it ends up in the trash and consumers are stuck retracing all their steps to get the money again. Oftentimes months after a rebate application is sent in, the customer will be asked for other documentation to get their rebate such as codes off of the products box that was thrown out months before or original receipts that have already been sent away.
Rebates make up big business. According to Business Week, nearly one-third of all computer equipment is sold with some kind of rebate along with 20% of digital cameras, camcorders and LCD TV’s. The industry estimates that 400 million rebates are offered each year with an estimated worth of $6 billion. The Better Business Bureau has received thousands of complains, in 2001 they had only 964 while last year they received 3,641.
“This is the post Christmas bait-and-switch,” Schumer said. “People go into stores with the promise of getting money back, and months later they still haven’t seen checks.”
In an effort to combat these deceptive rebate offers today Senator Schumer called on the Federal Trade Commission to implement a standard rebate policy to address the growing challenges of rebate offers.
“The bottom line is, rebates unfailingly bring in billions in excess profits for companies that offer them, but when it comes to saving the shopper a dime, as rebates claim to do, they fail the consumer more often than not,” Senator Schumer said. “It really is a combination of scrambling to meet deadlines, reading the extremely fine print, following unclear instructions and then crossing your fingers in hopes that the rebate check ever gets sent.”
In a letter sent to the FTC, Schumer urged an investigation of company rebate policies, and an overhaul and standardization of the rebate process to ensure that all consumers can participate in a fair rebate process. Specifically, Schumer requested that the following consumer protections are put in place:
• Companies must provide consumers at least 30 days to redeem their rebates and must fulfill the terms of the rebate within the same amount of time required of consumers but it should not exceed 60 days.
• Companies must take steps to send the rebate check in a manner which identifies the piece of mail as the expected rebate check.
• Companies must accept copies of receipts, not just originals.
• Companies cannot require consumers to write identifying information on the rebate form unless the receipt does not identify the purchased product.
• Companies offering rebates may not require information that is not necessary to process the rebate, including information other than name, address and phone number.
• Companies must provide telephone numbers or contact information for rebate inquiries so consumers are able check on the status of their rebates.
Schumer also outlines steps that consumers can take to ensure they get their rebates. Schumer today told consumers:
• Keep all receipts for items you will get rebates for. Companies may make you mail either copies or originals of all receipts.
• Send in you’re your rebates as quickly as possible Many companies have a period as short as seven days for consumers to send in their documentation.
• Save the box. A rebate application may require the UPC code off of the packaging that the product came in.
• Always sort your mail carefully. Many rebate checks are created to look like junk mail. Don’t be fooled.
• Make copies of every element of your application. Companies have been known to ask for you to resubmit, citing a mistake or loss of an application so copies of everything are a must.
• Have the appropriate numbers for follow up. You may have to contact the company if the rebate doesn’t arrive as promised.
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