Shoppers Sue Cash-Back Site After $5.4 Million Purchase

(August 7, 2019 update: Nearly a year after the dispute was ordered to arbitration, the two sides have informed the court that the arbitration process is complete and the judge has dismissed the case. No details about the results of the arbitration process were released. The defendants’ attorney declined to comment on the outcome, and the plaintiffs’ attorneys did not respond to any inquiries.)

Have you ever shopped through a cash-back site like Ebates or ShopAtHome to get a discount on your online purchase? Two Florida men did, and now they’ve gone to court to get their cash back – all $576,331.36 of it.

Yes, that’s more than a half million dollars. Turns out they did a lot of shopping.

Benjamin Winkler and Moshe Cohen, owners of a business called BigBen 1613, filed a federal lawsuit against ShopAtHome back in January. They say the cash-back site owes them the six-figure sum, after they went on a massive Walmart online spending spree last year.

On the day after Thanksgiving, ShopAtHome offered a whopping 12% cash back on Black Friday purchases from Walmart.com. So Winkler and Cohen pounced, and bought $5.4 million worth of merchandise.

That’s five-point-four MILLION dollars – for which the men expected to get more than half a million dollars cash back.

But they didn’t. ShopAtHome froze their account and refused to pay up – even though the men say the company likely received a large commission from Walmart for facilitating a sale through their site. So Winkler and Cohen sued.

Walmart’s affiliate agreement with ShopAtHome, which is spelled out on its website, “clearly prohibits such bulk purchases,” ShopAtHome argued. “Walmart explicitly prohibits purchases for resale or commercial use of any kind.”

As it turns out, the two men were indeed not buying $5.4 million worth of stuff for themselves. They acknowledged as much in their lawsuit, but said that based on their previous large purchases, ShopAtHome “should have known that the Plaintiff did not intend on utilizing the goods purchased for personal use.”

In other words, because ShopAtHome never refused to pay up before, the defendants said they were not justified in refusing to pay up now.

ShopAtHome didn’t address whether it “should have known” that BigBen 1613 was buying items for resale. But it said it was justified in refusing payment once it found out. “The very premise of Plaintiff’s claim is that it is a business engaged in bulk purchasing and reselling these goods,” ShopAtHome noted. “It is precisely because Plaintiff is not a consumer that its Cash Back Reward was denied.”

Besides, the company pointed out, its terms and conditions allow it to resolve any disputes through arbitration instead of the courts. So ShopAtHome says BigBen 1613 should never have sued in the first place.

The judge in the case has now ordered a temporary halt to the proceedings, pending a decision on ShopAtHome’s request for arbitration.

So a half million dollars, and potentially much more, still hangs in the balance. Whether ShopAtHome ultimately succeeds in its bid to keep the money, plus its commission from Walmart – or if BigBen 1613 succeeds in its effort to get triple the amount of damages, for a total of more than $1.7 million – the end of this case could end up giving a whole new meaning to “cash back”.