OfficeMax Inc., one of the nation's leading office supply chains, is eliminating almost all retail mail-in rebate programs — long a source of consumer angst — effective Sunday. Instead, shoppers will see immediate discounts in product pricing at the cash register.
"Customers resoundingly told us they don't like these things," despite efforts to simplify the rebate process, said Ryan Vero, executive vice president and chief merchandising officer at OfficeMax. The retailer will still offer rebates on software products which have rebates as part of their packaging.
The move by OfficeMax follows an announcement in April 2005 by Best Buy Co. Inc., the nation's leading consumer electronics chain, that said it will be abandoning all mail-in rebates in two years because of consumer complaints. According to Susan Busch, a Best Buy spokeswoman, the retailer has already eliminated the program on all notebook computers. C. Britt Beemer, chairman of America's Research Group in Charleston, S.C., believes that this will be a growing trend among retailers.
"It is not a consumer-friendly strategy," he said.
The retail industry counts on shoppers not to redeem their rebates given the time-consuming process. According to a recent America's Research Group survey, if rebates were under $50, only one-third of shoppers who bought merchandise with mail-in rebates would actually send away for the refunds. If the rebates were from $50 to $100, that figure is 50 percent, Beemer said.
The standard manufacturers' rebate programs require a customer to save product receipts, fill out forms and ensure they have submitted all information within a specified time period.
The Naperville, Ill.-based retailer, which operates 870 superstores, said the move came in response to a deluge of complaints from shoppers, who after waiting months to get refunds from manufacturers would storm into OfficeMax stores. Even if it were a manufacturers' fault, Vero said that customers would blame retailers like OfficeMax, not the suppliers.
OfficeMax's move comes as merchants are increasingly becoming legally responsible for rebates.
In March 2005, CompUSA Inc., the nation's leading computer retailer, agreed to settle a government complaint charging the company with deceiving consumers who bought computer products but failed to receive promised cash rebates from $15 to $100 each.
The Federal Trade Commission also called CompUSA to revamp its rebate programs to guarantee consumers will get payments when they were promised. It also called upon CompUSA for the next 20 years to ensure all manufacturers of products sold in its stores to pay rebates promptly. The settlement marked the first time the government held a merchant responsible for rebates offered by its suppliers.
Vero noted that OfficeMax began working with suppliers since late last year on eliminating the program.
"Initially, there was some hesitancy and concern," Vero said.