The Rebate Runaround

When Chris Rink bought a CD burner to make his own recordings and he thought he had gotten an incredible deal, CBS News Correspondent Bob Orr reports.

"I believe the purchase price was like $85 plus tax, something like that, and then there was a $40 rebate from the manufacturer," says Chris Rink

Rink filled out the rebate forms, mailed them to Philips Electronics, and then waited for his check. When it was weeks late, Rink began peppering the manufacturer with angry emails.

"My feeling was they put an offer out there and I accepted their offer, followed their terms to the letter."

Rink was far from alone in his plight. An investigation by the Federal Trade Commission found some 50,000 Philips customers in 2001 ran into a rebate roadblock trying to collect because of "unfair or deceptive acts or practices"

"People thought they'd done everything they needed to do in order to get the rebate and it simply didn't arrive they called and checked and still didn't arrive," Howard Beales of the FTC explained. "Consumers were getting the run around."

Under pressure from the FTC, Philips promised to make good on all outstanding rebates. And the company says its customers have now been paid.

Chris Rink did eventually get his check, a mere 24 weeks after he first applied for it.

"If I had it to do all over again I would not have bought the product, gone through the hassle and all the time on the phone and emails ... not at all."

Rebates are a popular marketing tool because the fact is most customers never bother to redeem them. But the FTC now has put companies, like Philips, on notice. When customers do the paperwork, the check better promptly be in the mail.