CyberRebate.com goes belly-up

[rcjordan]

CyberRebate.com, Inc., an on-line retailer headquartered in Long Island, NY, filed for bankruptcy protection under Chapter 11 in the Eastern District of New York at 10 a.m. today. [cyberrebates.com]

OUCH! That's a biggie. CyberRebate banners have been plastered all over the web lately.

[Drastic]

Bummer.

Though industry house-cleaning is still in effect, it does seem to be slowing.

Or is it just me?

[rcjordan]

>just me?

The sheer number of failures has declined, but I think the big dogs are starting to drop out now. The mass or magnitude of these programs will decimate some publisher categories, like entertainment.

[NFFC]

They certainly had a lot of banners out there, clicked through a few times and never did work out the business model!

Looking at the recent figures from Nielsen it seems that ecommerce continues to grow at an impressive rate, jumping 35.6% since last April.

"..a March 2001 online survey of 39,000 Web users, found that eCommerce has hit mainstream, drawing online purchases from 48.2 percent of all Americans over 18 years old, or 100.2 million people."

PDF Report [209.249.142.22]

[Drastic]

>48.2 percent of all Americans over 18 years

Wow, that *is* impressive. I had no idea ecommerce already had that much penetration.

Also notable:
- 81.2% of all online users have made a purchase.
- 5 of the top 10 etailers are primarily selling books or music

[rcjordan]

It looks like this CyberRebate thing has really stung plenty of people. Claims of as high as $10k are being posted. One coupon and freebie site has opened a special forum on it already. Supposedly, the assets are $24M and debts are > $80M so the chance of getting any money, either as a customer or affiliate, are zip. Worse, some past employees say that management knew the model was terribly, terribly flawed as much as 6 months ago.

[Brett_Tabke]

For those of use with outstanding bills heading cyberrebates way, this is not very encouraging.

[rcjordan]

Cnet: Millions vaporized in CyberRebate collapse [news.cnet.com]

"Martin McMillan of Galax, Va., is owed the most of any individual: $115,000 in rebate checks, according to CyberRebate's court filing. I got things like Game Boys, digital cameras, stuff that I could sell on eBay, McMillan said in a telephone interview. It just seemed that it was free merchandise, only tying up my credit cards for three months."

[mivox]

Cliches become cliches for a reason:

If it's sounds too good to be true, it probably is.

That poor guy is now stuck with credit card debt totalling roughly twice his annual family income. Yeesh...

[rcjordan]

I have a 2-word epitaph for Mssr. McMillan, but we're "G" rated.

[toolman]

Get mivox to spell it out for you rc...she's good at it.

[rcjordan]

Friday's Wall St Journal (print):

"This could be the first dot-com failure where we see big consumer losses..."

"Among the top 20 creditors listed in CyberRebate's bankruptcy petition are nine individuals owed an average of $89,336. These creditors are all CyberRebate customers.."

"...about $80 million of CyberRebate's debt consists of unpaid rebates..."

There's going to be wide-spread damage from this extending to unrelated dotcoms, but particularly freebie-oriented ones. Also, some already-suffering ad networks may be caught in the domino effect.