Forget promises of free money. Try to cash in on a mail-in rebate this holiday season and it could end up costing you more -- not less.

Even in the best of times, relying on a company to refund some of the money you spent on their product is a little risky, says Linda Sherry, spokeswoman for consumer advocacy group Consumer Action. (Forget to fill out a form in all capital letters, or neglect to circle the purchase price on an original receipt, and the whole effort is considered null and void.) But now that retailers and manufacturers are struggling to weather the economic storm, cashing in on rebates is even more of an uphill battle. The process has slowed to a crawl as these companies strategically juggle their finances, she says. Many are also swapping checks for rebate gift cards that aren't only worth less than the cold hard cash but basically force you to spend the money with that particular retailer or manufacturer.

Making matters even worse, Continental Promotion Group, one of the nation s largest rebate processing companies, filed for Chapter 11 bankruptcy protection in mid-November -- leaving millions of dollars in rebates in limbo. Clients, including Canon (CAJ) and Costco (COST), have warned consumers that any checks they receive from CPG may bounce.

You really cannot predict what s going to happen in this economy, so grab your money while it s hot, says Sherry.

Here's how to avoid getting short-changed by mail-in rebates:

Consider business stability

Like gift cards, rebate offers -- and the resulting cash -- aren t protected should a retailer or manufacturer go out of business. Look at it as, you re loaning this company money, says Dan de Grandpre, founder of consumer guide Dealnews.com. Do you trust them to pay you back? Use caution when buying a rebate-bearing item from a company with known financial difficulties, specifically, those that have filed for bankruptcy protection or are hosting closeout sales, he says.

Compare prices

"Don t assume [a rebate] means a better deal, says Sherry. Remember: There are a lot of good deals out there that don't entail mailing in a rebate. Stores like Best Buy (BBY) and Walmart (WMT) have largely eliminated rebates in favor of bundling them into the savings and offering lower prices at checkout. Use a price comparison search engine to check competitors' offerings.

Check before cashing

Before you cash that rebate check, take a moment to visit the retailer or manufacturer s web site and look for rebate advisories, suggests de Grandpre. Companies that care about their brands are trying to ensure consumers don t lose their rebates, he says. Wireless router manufacturer TRENDnet recently instructed consumers to mail in CPG rebate checks, and even dipped into its own funds to cover them. Canon is also reimbursing consumers for any returned check fee they incurred. (CPG has not released details on rebates affected by its bankruptcy filing.)

Move fast

The faster you get your rebate paperwork in, the sooner you get your rebate -- and the smaller the window you leave for problems to arise, points out Sherry. Likewise, don t wait too long to use a rebate gift card, which many companies now send in lieu of checks. Most expire within two to three months.