CPG's Chap. 11 Filing Scrambles CE Rebate Plans

By Greg Scoblete -- TWICE, 12/1/2008

TAMPA, FLA. — The Chapter 11 filing of rebate fulfillment firm Continental Promotion Group (CPG) on Nov. 14 sent manufacturers and retailers scrambling to find an alternative provider while warning consumers that their rebate checks might bounce.

Among the vendors affected were Adobe, Canon, Westinghouse Digital, Pentax and Logitech.

CPG serviced rebates from retailers as well, including Costco and Newegg.com.

"The bankruptcy filing will allow CPG to restructure its business while continuing to provide services to both new and existing customers during the restructuring period, and we anticipate emerging from Chapter 11 with the assistance of counsel, our clients and the court that supervises this process," said CPG general counsel Kevin Iurato in a statement.

"We are working with our clients to the extent possible to assist with the honoring of consumer rebate checks outstanding prior to the bankruptcy filing or providing alternate direction to consumers."

CPG did not respond to a request for information. According to published reports, the firm is attempting to meet its rebate obligations from loans provided by its manufacturing partners.

Costco told its customers not to cash rebate checks dated prior to Nov. 13. The retailer said it would pay any bank fees incurred by a bounced check and that all rebates issued after Nov. 13 could be cashed.

Pentax similarly warned consumers that checks dated prior to Nov. 15 would bounce and that new checks would be issued as early as this week.

In a note posted online, Canon said that a "small percentage of the outstanding rebate checks that were issued by CPG and dated on or before November 14, 2008 were returned unpaid," but that otherwise, rebate checks issued by CPG would not bounce.

For its part, Logitech has said through a spokeswoman that its rebate holders "should be able to deposit their checks without any issues."

Westinghouse Digital, which only uses mail-in rebates for computer monitors in the e-tail channel, said through a spokesperson that there are"only 64 checks that have not been cashed by customers that could potentially be affected by this announcement" and the company is "proactively working to resolve this situation."

Adobe reissued rebate checks for Photoshop Elements 7, Premiere Elements 7 and the bundle that combines both titles to its consumers. Adobe also said it would reimburse consumers who submitted the original rebate check and have incurred bank fees because the check did not clear.

An ArchBrook Laguna spokesperson told TWICE that the distributor is aware of the problem and is currently working to communicate directly with retailers who were involved in the rebate program. Once the company has reached all of the retailers, ArchBrook plans to post a complete list affected rebates on its Web site, along with a new address where consumers can have their rebates processed.

Fujitsu Computer Systems has temporarily begun handling rebates internally and has reached out to impacted consumers "to ensure the rebate process continues unimpeded, the company said.

Pandigital has switched rebate providers to Parago "without any transition issues," a spokesperson said. "All rebates in the pipeline are being forwarded to Parago for immediate payment. Also, all of our retailers were given new rebates by Tuesday of this week so we will have no impact on redemptions or any customer service issues." — Additional reporting by Colleen Bohen, Lisa Johnston and Amy Gilroy