If you use mail in rebates for virtually any product in North America, you will want to read up on this and start making sure your money is safe.
We have been longstanding supporters of mail in rebates (MIR) in our industry and for the most part if you properly managed your personal rebate process, MIRs have been a fairly safe bet. All of that is about to change. Continental Promotions Group headquartered in Canada is one of the rebate industry’s largest and oldest players and has huge ties to computer hardware rebates. CPG is putting the screw to its customers to “repay” rebates that have already been funded. Hardly what we would call “Fulfilling the Promise of the Brand” as it is stated on its home page.
Since 1989, CPG has earned an enviable reputation for its innovative, responsive and effective promotions, from rebates and loyalty programs to gift cards and sales spiffs. The company is a recognized leader in the promotion industry, having created countless consumer, retail and business-to-business programs for more than 500 national and international clients in 120 countries.
While we prefer not to kiss and tell, our client list reads like a Who's Who in Consumer Retailing and Manufacturing. From high tech to housewares, home improvement to home entertainment, appliances to auto parts.
Here is a simple overview of how a rebate with CPG works. Company X puts a rebate on its product, let’s say for $20. Company X expects to pay out 5000 of these rebates to consumers. Company X would then put the $100,000 needed to cover that rebate into CPG’s bank accounts. CPG basically escrows the money for consumers. CPG is trusted with this money in order to make sure the consumer is “safe.”
We have it from good sources currently that CPG owes consumers somewhere in the neighborhood of $9M to $12M worth of rebates. The problem here is that CPG currently only has about $3M in cash to cover that $9M-$12M in rebates owed to the consumer. Where that money has gone to is anyone’s guess and we will leave speculation up the law enforcement authorities and the courts.
Currently CPG is contacting its customers telling them that they will need to yet again deposit money into CPG accounts in order for CPG to have the cash to cover rebate checks to consumers. This is money that companies have already paid CPG previously. CPG is telling its customers that if they do not pony up AGAIN, consumer rebate check payments are in jeopardy. In our example above, CPG is not sure where the $100,000 is that Company X paid them, but we are sure that they want another $100,000 or CPG will start bouncing consumers’ MIR checks.
If you have a rebate out with CPG, I would check into it quickly. If CPG is no help, contact the company that manufactured the product directly and explain your concerns.
Certainly MIRs are a mixed bag in the world of the computer hardware enthusiast. Some swear by them while others will not touch them with a ten foot pole. One thing is for sure, if CPG fails consumers and starts bouncing rebate checks, CPG will massively undermine the entire way that e-tail and retail computer hardware outlets do business as well as many other markets. It likely will not be for the better initially, but let's face facts, lower pricing up-front without the MIR hoops to jump through is what the consumer wants.
Here is a very interesting post in our forums that share an email from Trendnet notifying its customers of bouncing rebate checks.