TBC Corp., the parent of the Tire Kingdom, NTB, Merchants and Big O Tires Inc. chains, has made good on a gas rebate voucher program it offered customers last year that turned out to be a scam.
The tire dealerships were among numerous retailers in several states that bought gas vouchers from Tidewater Marketing Global Consultants Inc. last year at a fraction of the face value. The vouchers were then offered to customers as a sales incentive. In Tire Kingdom's case, customers who bought a set of four tires received a $500 voucher.
The customers were responsible for submitting gas station receipts on a monthly basis to Tidewater to receive incremental reimbursements in gas cards.
However, the Clearwater, Fla., redemption center has now closed under a court order and is in state receivership after hundreds of consumers complained that Tidewater failed to deliver the rebates.
We were taken advantage of. We were absolutely victims in this, said Bob Crostarosa, senior vice president of marketing for TBC Retail Group.
He would not disclose how many of the company's customers received the vouchers through its Tire Kingdom and NTB (National Tire & Battery) stores in select markets and at its Big O Tires franchised outlets in Dayton, Ohio. The largest promotion was for the Tire Kingdom stores in Florida.
In an open letter to customers on its Web site, Tire Kingdom President Orland Wolford apologized for the inconvenience customers experienced in dealing with Tidewater.
To remedy the situation, TBC offered affected customers two options: a one-time offer of a $100 Visa prepaid card or participation in a similar $500 rebate offer that would be distributed via monthly redemption tickets. Customers had until May 15 to submit a selection agreement. By choosing an option, customers were then obligated to release the company from any legal claims involving the Tidewater program, according to TBC.
Mr. Crostarosa said the new rebate offers were an in-house program to take care of our own customers.
The company used a fulfillment center to handle registrations and to process the rebates but TBC provided its own funds to reimburse the customers.
The $500 rebate option is similar to the Tidewater program in which customers had to submit $100 worth of gasoline station receipts each month to receive a $25 installment in the form of a prepaid gas card.
We want to give customers the same program they were offered before, Mr. Crostarosa told Tire Business prior to the program's expiration.
Under the TBC program, the company provided a customer with 20 redemption tickets and each month, up to 20 months. The customer was required to mail in a minimum of $100 in receipts from a selected brand of gasoline. For each submission, the customer was to receive a $25 prepaid Visa card. Customers had to choose a 20-month redemption period to participate in with the last redemption period ending December 2010.
It was the firestorm of consumer complaints claiming Tidewater failed to distribute gas cards after consumers submitted their monthly receipts that led the Florida attorney general to sue Tidewater in February.
The suit alleged the company and its president, Crystal Clark, engaged in unfair and deceptive marketing of gasoline redemption vouchers. Hundreds of thousands of gas rebate vouchers may have been provided to consumers across the country but Tidewater failed to provide the gas cards as promised, the suit stated.
Tidewater operated several Web sites, including freegasredemption.com and FreeBeeGas.com.
The state has since taken over the shuttered operation and is continuing its investigation. The state receiver who took control of the company and its assets reported the business lacked economic viability from the outset.
He noted the company never had sufficient assets to purchase and issue the prepaid cards to eligible consumers and that the company's liabilities from redemption of outstanding vouchers exceeded its assets by more than $10 million. The receiver said according to the company's records, nearly 130,000 consumers registered their vouchers and were entitled to about 360,000 prepaid debit cards but only 28,000 were distributed.
Prior to the lawsuit, Mr. Crostarosa said TBC's dealings with Tidewater had not been trouble-free but I don't know of a promotion that's trouble-free. He said at the time that when TBC did receive consumer complaints about the gas rebate program, it contacted Tidewater and the problems were fixed.