In an effort to strengthen customer loyalty, big-box chain OfficeMax is doing away with that most hated feature of retail promotions — the mail-in rebate. Since July 2, the company has been completing all its discounts inside its stores.

According to Julie Krueger, vice president of marketing and advertisement, the move is part of a long term strategy to attract more business. The company's research has shown that shoppers intensely dislike the hassle of filling out paperwork, saving labels from product boxes and waiting weeks to get their money back. Many buyers often don't even bother with their rebate applications, missing out on the offered markdowns — which is one of the reasons the retail industry continues to use mail-ins.

According to America's Research Group, only about a third of mail-in rebates are redeemed, although the number rises to as much as 75 percent when it comes to savings of more than $50.

“Obviously consumers are not as excited about rebates as about coupons because there's a lot more they have to do,” says Britt Beemer, chairman and founder of the Charleston, S.C.-based consumer marketing research group.

OfficeMax has been inspired in part by the strategy employed by electronics retailer Best Buy, which launched a two-year program to eliminate mail-in rebates in April of 2005.

“It's a very bold move and it's going really counter to what our competitors have been doing, but it's the right thing for our consumers,” says Krueger. “In order for us to give everyone the instant value at the point of sale, it's usually going to be a little less in savings than what our competitors advertise. But, ultimately, when consumers start understanding the change in our strategy, we think it will drive more sales.”