Scam Alert: Rebate Runaround

Don’t get snagged on money-back offers.

By Sid Kirchheimer

Last August, Sharon Dirlam of Santa Barbara, Calif., finally received her promised $300 rebate for buying a new computer.

"All it took was 29 e-mails, three phone calls, several letters and five months of my time," Dirlam says. "I had to resend everything two, three times, and still I didn't get all the money. It's clear to me they wanted me to quit, but getting my rebate became a personal quest—one of the most exhausting experiences of my life."

Retired bank employee Larry Vansickel of Altoona, Pa., is just as tired—but not as lucky—from trying to claim a $100 rebate for a swimming pool cleaner purchased in July 2005.

He had to send the store receipt, original UPC bar code, personal information and copies of his driver's license and electric bills—all by registered mail that cost him $8, Vansickel, 62, says. After that, he says, he fulfilled a requirement to resubmit everything one year from the purchase date. A few months later his rebate request was rejected. The reason: "I missed the deadline on that second submission by 10 days," he says.

Sound familiar? Rebate gripes have soared nearly 400 percent since 2002, says Steve Cox of the Council of Better Business Bureaus. Rebate fulfillment companies—businesses hired by manufacturers or retailers to handle such promotions—now rank 35th among 3,900 industries and services in the generation of complaints.

Rebates are offered to boost product sales, with an estimated $6 billion distributed to Americans each year. Still, most rebates go unclaimed. One reason: Rules are so complicated or vague that customers don't even bother, says Matthew Gold, an attorney with the Federal Trade Commission.

The biggest complaints of customers who do bother are for "late delivery, unclear terms or just not receiving the rebate when the buyer meets the requirements," Gold says. "The problem is huge."

How can you avoid hassles and get the rebate you expect?

• Know the terms before you buy. Inspect the terms on the rebate form or store receipt—or grill the retailer about them. Current law places no limit on the hoops you must jump through to get a rebate, but those hoops, Gold says, must be disclosed.
• Make copies of everything. This includes store receipts, bar codes, forms, product containers and serial numbers. For the clearest copies of bar codes, take digital photos of them and print the photos from a computer. (One reason rebate issuers require original bar codes is to protect against customers who send multiple rebate requests for one offer.)
• Answer every question. Any excuse to deny your claim may be used against you. If asked for your fax number, for example, write "I don't have one" rather than leave the field blank.
• Act quickly. Consumers used to have 60 to 90 days to submit a claim for rebates, says Timothy Silk, assistant professor of marketing at the University of British Columbia. Now the average is 15 to 30 days.
• Use certified mail and ask for a receipt. Forms should also be handwritten; if typed, they raise suspicions of mass-mailing rebate fraud.
• Shop where rebates are easy. Stores like Staples, Cingular and Costco let customers complete rebate forms at checkout or online.
• Complain. Gold suggests writing directly to the CEO of the product's manufacturer and retailer instead of the rebate fulfillment house. Or, if you feel terms weren't fully disclosed or your rebate doesn't arrive, contact the FTC at 1-877-382-4357 toll-free or www.ftc.gov, your local BBB, or your state attorney general's office.