Prepared for ENTR200 Team Analysis
& Discussion
Spring 2007 © Hank Feeser
![[cyber-rebate logo]](cyberrebate_files/image001.gif)
Founder
Joel Granik
CyberRebate.com, thought it could make money
by giving stuff away for free. The online retailer, founded in 1998, sold an
assortment of goods at heavily marked up prices (some items going for up to 10
times their retail values), but promised customers a hefty rebate that often
amounted to 100% of the purchase price.
For example, CyberRebate charged about $1,100
for a 13-inch RCA television that normally retailed for a few hundred dollars.
Buyers could get a full refund of the purchase price as long as they jumped
through some hoops -- rebate forms had to be submitted by a deadline, and
checks came 10 to 14 weeks later. CyberRebate banked on the idea that some
percentage of buyers would forget to fill out the rebate form, or fail to do so
in time, leaving the company to pocket the money.
|
CyberRebate
promised hefty rebates, but didn't deliver. |
But selling items at such wildly inflated
prices just about guaranteed customers would go out of their way to get their
rebates, quickly sinking CyberRebate into heavy debt. The company, founded by
law school student Joel Granik, filed for Chapter 11 bankruptcy protection in
May 2001, listing liabilities of $83.4 million. Much of that debt was owed to
consumers who were promised rebates but hadn't received them.
Both Mr. Granik and his business partner,
Joseph Lichter, settled with the Federal Trade Commission for $40,000 in August
2004 and were barred from running a rebate-based business. Some rebate
claimants eventually received partial reimbursement of about nine cents for
every dollar, according to a statement on CyberRebate's Web site.
See this link for additional info: http://groups.msn.com/CyberrebateRebateRecoveryAlliance/crofficelocations.msnw:
A few jpgs from this site are provided below:
Bounced check
Flyer
Flyer