CompUSA settles rebate complaint

[ViRaL1]

http://www.msnbc.msn.com/id/7160072

The Associated Press
Updated: 4:05 p.m. ET March 11, 2005WASHINGTON - The nation’s leading computer retailer, CompUSA Inc., has agreed to settle a government complaint charging the company with deceiving consumers who bought computer products but failed to receive promised cash rebates from $15 to $100 each, the Federal Trade Commission said Friday.

The regulatory agency ordered Dallas-based CompUSA to overhaul its rebate programs to guarantee consumers will receive payments when they were promised. It also required CompUSA for the next 20 years to ensure all manufacturers of products sold in its stores pay rebates promptly.

Retailers often advertise computer equipment for remarkably low prices adjusted for rebates, knowing that only a fraction of consumers apply for such payments. The settlement with CompUSA marked the first time the government held a retailer responsible for rebates offered by its manufacturers, the FTC said.

The FTC’s settlement made CompUSA responsible for unpaid rebates on behalf of one of its manufacturers, QPS Inc., which went out of business but made CD drives and other products sold in CompUSA stores.

FTC lawyer Kerry O’Brien said thousands of customers could be eligible, amounting to rebates totaling hundreds of thousands of dollars.

The settlement required rebate payments for any eligible consumers that CompUSA can identify through its records, and for any eligible buyers who contact CompUSA or the FTC through its main telephone number, 877-382-4357, over the next 75 days.

“If you’re a retailer and you’re advertising someone else’s rebates, you can’t turn a blind eye to their problems fulfilling those rebates,” O’Brien said.

A spokesman for CompUSA in Dallas, Mark Walker, declined to comment.

The FTC said CompUSA falsely represented to customers who bought QPS products that rebates would be paid within six to eight weeks, but it said some customers waited up to six months or never received money. It also accused CompUSA of continuing to advertise QPS rebates despite knowing about these serious delays, up until QPS filed for bankruptcy protection in August 2002.

The FTC said CompUSA also inappropriately delayed rebate payments on its own branded products.

[budz]

I've never purchased computers from COMPUSA. I've bought hardware from them that had rebates. I've always received the rebate checks from them in less than 2 months from the time of purchase. I even received a rebate checks for price matches they did. How sick that they've deceived other consumers.

[Roundabout]

Now, if they'd only go after Fry's and BB...

[Robert Simandl]

And Staples... and OfficeMax... and Office Depot... and TigerDirect...

[Sillyname]

MICROCENTER

Everything they advertise has got "small print" underneath it.

[lumis]

“If you’re a retailer and you’re advertising someone else’s rebates, you can’t turn a blind eye to their problems fulfilling those rebates,” O’Brien said.

excellent quote.. rebates are pretty much a legal scam..

most people dont send them in
of the people who do send them in, a lot screw it up
of the people who fill them out correctly, some dont get them at all

the store gets to advertise a flashy price, and they get to keep your money for an extra 2-3 months..

i'm currently waiting on a $40 rebate from seagate (fry's).. i was going to buy a 200gb hdd from newegg.com, but fry's had it for $1 more (before rebate), and it was a retail kit.. its been 4 weeks since i sent the rebate in, i just checked the rebate website, they have no record of it.. 8-10 weeks.. jeez..

there should be a law limiting them to 4 weeks to process & pay rebates.. a week to get it, 2 weeks to process it, a week to send it back..

there is no purpose for them, aside from keeping 10% of their customers money extra 2-3 months so they can earn interest on it..

y'know, even though wal-mart is evil & crappy, atleast you dont have to deal with rebates..

[Nilfennasion]

Rebates are rarely offered in Australia. If they are, they are advertised on a first-in-first-served basis, and usually consist of some other material good. For instance, if you buy a DVD burner, they will offer some discontinued model of DVD-ROM drive with it, or something like that. On the rare occasion where cash rebates are offered, Australia's consumer affairs department practically sticks its nose up the bottom of the company that is actually doing the offering.

[AlecWest]

My first broadband experience was QWest DSL. They promised me a free modem (a $99 modem with a $99 rebate after 3 months). At the 3 month mark, I sent in my request for the money or credit ... and waited for 6 months more. Nada. I started calling QWest and they claimed no knowledge of the rebate deal. So, I did some poking around on the net and found the fulfillment house QWest mentioned in their "free modem" paperwork (yes, I saved the paperwork). I called them in their Phoenix office. They confirmed the rebate offer but, checking their QWest list, couldn't find my name on it. So, I decided guerilla tactics were in order.

I started sending complaints to any place that I thought would accept them ... from the FCC, to my VISA card (I charged the modem), the BBB, etc., etc., etc. But, the complaint that did the trick was the one I made to my State Attorney General's consumer fraud department. QWest called me up, made reference to a call from the SAG's office, and said my check was on the way. I called up the fulfillment house again and, sure enough, I was a recent addition to QWest's rebate list. Two days later, a $99 check was in my hands.

That's the only time I've used a rebate deal ... and it will be the last time. I've told retailers on occasion that associating a product with a rebate is the quickest way to kill the deal to me. If I see a product I want advertised for $299.95, it darned well better be $299.95 when I get to the cash register. If not, it stays at the cash register.

[BJ_M]

And Staples... and OfficeMax... and Office Depot... and TigerDirect...

for sure ---

rebates repays seem to be taking longer and longer or you never get them ..

[Almost Human]

Let's see! 10 years, 89 rebates sent in. The winner is - Costco!

Sent Costco 8, received 8 within 2 weeks.
Sent Fry's 15, received 14 within 3 months. Didn't get $20 ATI rebate.
Sent OfficeMax 10, received 8 within 1 month.
Sent Staples 21, received 18 within 3 months.
Sent Office Depot 7, received 3 within 3 months.
Sent Circuit City 10, received 5 within 2 months.
Sent various others 18, received 6 within 9 months.
Sent Best Buy 0. No matter what I went there for, they didn't have it.

All of the above were sent precisely as required.

[lumis]

wow, i've never known or even though anyone would keep track of their rebates that closely.

[leebo]

wow, i've never known or even though anyone would keep track of their rebates that closely.

I'll bet his bathroom is spotless.

The article states the business reasons behind rebates:

Retailers often advertise computer equipment for remarkably low prices adjusted for rebates, knowing that only a fraction of consumers apply for such payments.

That, and what lumis said:

the store gets to advertise a flashy price, and they get to keep your money for an extra 2-3 months..

Think about how much interest they make on hundreds of thousands of dollars over two or three months, you probably cant, which is exactly why rebates work - for them.

I mean, to the consumer, why is a rebate even needed? If the item is being advertized at a certain price, and after you receive the rebate it actually worked out to that price, then why the heck didn't they charge that price in the begining???

If everyone would boycott rebates, they would have to think of something else.

I have to admit, I'm a big rebate user. This past Christmas I must have used 15 rebates, but I'm anal about sending them in. Got most of them too.

I have trouble with Semantec rebates though. The company that handles their rebates, for two years in a row, has sent me postcards saying that my rebate didn't qualify because I had failed to include an item. But both times I called, and they mysteriously discovered they had made an error. So it seems to be SOP with them.

I wonder how many others didnt bother to call in.

I'm currently fighting with Pinnacle.

The Govt. should put an end to rebates. Too bad they work for Corporate America instead of the people. The founders of the U.S. must be turning in their graves.

[tomwil]

The state of Connecticut has the right idea. In that state, the rebate has to be given at the time of sale. No more mailing or applying for the rebate!

[BJ_M]

the intrest they would make would be next to nothing .

there are varied reasons for this - but take it on face value ..


what does happen is that only roughly 30-70% of people even apply for rebate ..... depends on store, product etc .. i read the average overall was less than 50% ...

[BJ_M]

The state of Connecticut has the right idea. In that state, the rebate has to be given at the time of sale. No more mailing or applying for the rebate!

maybe that will spread

[leebo]

the intrest they would make would be next to nothing .

Really? Try depositing $300,000 or $400,000 for two or four months, then send me the "next to nothing". I promise to accept it on face value.

[BJ_M]

leebo -- i dont feel like typing it all out -- the retail sector accounting details ..

and the fact there are 4 types of rebates plus marketing foldbacks, handling companies, marketing companies, shelf space foldback fees, branding costs, handling costs, loss and a lot more all in play,,,

just call up an accounting executive accountant ... though much of the details are not going to become public knowledge in the highly competitive retail marketplace .. but maybe you can gain some overall sense of the picture ...

[dcsos]

I shop in chinese store
we don't need no stinkin' rebates
LITEON 16x dualie $73.00
Seagate 120GB HDD 8mb buffer $76
no twisted paper trail
(which costs in time and money - my favorite rejection involved no rebate was given cause we asked for a copy and you supplied the original)

[AlecWest]

my favorite rejection involved no rebate was given cause we asked for a copy and you supplied the original.

I've run into that kind of crap before, too ... and just don't buy the product.

1) You buy a product.

2) To get the rebate, you must send in your original receipt for purchase.

3) Your equipment goes bad, you take back to the store for warranty repair, but since you no longer have your original receipt, you can't prove you bought it from the store ... unless you put it on plastic (requiring a lengthy wait-time, and possible cost, to get a copy of the charge receipt).

4) The rebate doesn't come ... but since you no longer have the original receipt, you can't prove you bought the product in the first place and therefore can't prove you're entitled to the rebate ... (insert the "put it on plastic" scenario here, too).

If someone wants to give me a discount, let them give it to me NOW ... that's what I say.

P.S. Wish Connecticut's laws would migrate to Oregon.

[BJ_M]

at least here - they print you two or more 'original receipts" for this purpose ...

[handyguy]

Compusa only has to pay for those that it has records of.... As if, they keep records that long. Probably ran their new paper shredders all night.

[snafu099]

Mostly I think the rebate thing is a rip off but don't expect to many states are going to do anything because of the increased sales tax that they collect

As a former accountant, I agree with BJ_M that the interest income in general is NOT a money maker per se, it probably does good to pay the third party handleing the rebates.. The money is made from those that don't send it in and those they are able to deny.

Rebates "may" be a legal way around foreign "dumping"

Rebate praise vs rant
Office depost- bought 2 Compaq systems last March for $249 AR. Corp office denied 2x $50 of rebates but the local store manager gave me 2 $50 gift cards to compensate for it. Very good PR/business

Current Staples "easy rebate" program. While it still has glitches, if you can get it to tke the rebate submission it provides easy no hassle method with good trail of subission and rebate progress

Just bought another Compaq sys $249 AR from CompUSA 3-11-05 during the 6hr birthday blowout sale. Will have to see how the rebates are handled.

Rants:
PNY memory $30 rebate sent 5-22-04 not recieved. Bought at Best Buy
Epson $20 gift card offer on R200 12-09-04 bought from Office Depost
Like many others, rebates that are small just do not justify my time and effort to raise a stink about. I will not buy pny memory with rebate sent to them again- have one now but the reate is direct from Staples

[Jayhawk]

All of the above were sent precisely as required.

My experiences have been just like Almost Human's. I've probably sent in a couple of dozen over the past 12 months and have always received the $$ in less than 8 weeks. I've been especially impressed with Sony ($300 on two laptops), DLink on a number of things, and Best Buy in general. OfficeMax and Office Depot have also been guick. The single glitch was a rejection based on my not sending the UPC. I had, so I re-sent them my copies and the $20 showed up a week later (CompUSA).

Don't get me wrong. They're a pain in the ass and I try to avoid them. Hopefully they'll start to become more rare but my experience in getting the $$ has been great.

[lumis]

alright.. so we've established why there are rebates..

1) the companies make money off them & get to advertise a lower price.. if rebates didnt make them more money, they would not do it.

2) states collect sales tax on the money you're "getting back".. and with the way the american economy (and state budgets) are these days, it isnt likely they would pass a law that would generate less money for them.

i wish there werent mail in rebates, i try to avoid them, but sometimes you have to grin and bear it.

i doubt any politician of significance will raise a stink about it, because i'm sure a lot of them are getting "campaign contributions" from the companies that offer mail-in rebates.

[Nilfennasion]

If someone wants to give me a discount, let them give it to me NOW ... that's what I say.

It's times like this when I wish the videohelp forums had applause icons.

[madymo3d]

Maybe they should start treating rebates like coupons. You pay the after rebate price at the register, and it's up to the retailer to file the claim and get their money back from the manufacturer. I'll bet the retailers aren't gonna put up with late/non-payments manufacturers. I guess that would make it too easy to claim more than 1 per address.

[BJ_M]

If someone wants to give me a discount, let them give it to me NOW ... that's what I say.

It's times like this when I wish the videohelp forums had applause icons.

[Marty2003]

I recently watched a news report on mail-in rebates and apparently only %5-%10 of people actually send them in (This is in Canada BTW, so stats might be different in the US).

The thing most of you are missing is that it's not the stores which are offering the rebates, it's the individual manufacturers. The stores don't get to keep any money for a few months, they keep all the money you pay. The manufacturers offer the mail-in rebates to encourage people to buy their products instead of the competition. The Retailers don't make any money off the rebates but they do get more sales because they get to advertise for a lower price.

I've always received all my mail-in rebates, although not always on time, so I say I'd rather have mail-in rebates than no rebates at all.

[BJ_M]

in some cases it is the stores --

[mattyboy]

Ive always stayed away from getting something that has a mail in rebate, mainly because of what I read here and on other hardware/media related sites. Is it really that bad? I live in Canada, is there any other Canucks that can comment on how hard it is to get a rebate from somewhere like FutureShop, or Bestbuy/staples etc.?