[helpingmoms]

Just got an interesting email to check out the ebates blog. Apparently they are not paying their members their cashouts on time this month and blaming a cash flow problem on merchants not paying THEM timely. Maybe they are using that cashout money to pay for their new toolbar development? LOL!

http://blog1.ebates.com/ebates/2009/...-payments.html

Dear Ebates Member,

You may have noticed that your cash back payment from Ebates has not yet arrived - but please rest assured that your payment is in process.

Given the challenging retail climate, a large number of our retail partners have been slow to pay our commissions for purchases you made in November and December, and these commissions are what allow us to pay your cash back rebates. To ensure the largest possible payout, we have delayed processing your payment until the last possible moment. We will complete processing and send a payment this week that reflects all purchases for which we have received payment from the retailer.

Any payments not received by Ebates as of today and paid this week will be sent to you in a special payment as soon as we receive them. You will still see these orders as cash pending in your Ebates' account.

Our goal remains to pay members cash back as quickly as possible and we apologize for this inconvenience.

Kevin H. Johnson
President and CEO

[Rhea]

Good. I hope they tank.

Sometimes a little gloating feels just right.

[Bill]

Given the challenging retail climate, a large number of our retail partners have been slow to pay our commissions for purchases you made in November and December, and these commissions are what allow us to pay your cash back rebates.

So they (eBates) are admitting that commissions are being used to pay their members. The way I understand it, a "rebate" is paid directly from a merchant/manufacturer directly to a purchaser. Ebates is apparently doing a commission "split" - hence earned income for their members. Just as us "normal" affiliates have to report our income, then these members should also - if/when the amount exceeds $600 in any one year.

Might be time to get the IRS involved. Might be time to complain about this being an unfair way for people to earn commissions.

I've got a joint meeting with my tax attorney and CPA in another couple of weeks. I may ask them both for a bit of pro-bono time to answer a few questions along these lines.

[Trust]

"So they (eBates) are admitting that commissions are being used to pay their members."

That's not news, they say that right on the home page.

"Online stores pay Ebates a commission (think of it as a finder's fee) on every sale and we split this amount with you....."

What I find odd is that they have to wait for those commissions to pay out their members. I figured they would have enough money to go ahead and do that but apparently they don't.

[2busy]

maybe they overspent on charter memberships? maybe too many members felt charitable over the holidays?

[knight01]

Originally Posted by Trust

What I find odd is that they have to wait for those commissions to pay out their members. I figured they would have enough money to go ahead and do that but apparently they don't.

I've always presumed it worked just like CJ/LS. They don't pay out if they don't get paid.

Will be interesting to watch what happens as merchants go out of business and e b a t e s tries to explain to their users they aren't going to get paid due to this. I'm guessing a lot of complaints about fraud and scams will be posted around the web.