Looks like Blockbuster is starting to feel the heat from services such as Netflix. In addition to offering their own rent-as-much-as-you-want-for-one-flat-fee service they’ve also announced that starting with the new year they won’t be charging late fees on rentals any longer. Which isn’t to say you can hold onto that new release indefinitely either.
The world’s largest video rental company will still have due dates for their rental products—one week for games and two days or one week for movies, depending on whether it’s a new release.
But customers will be given a one-week grace period after that to return the product. After that grace period ends, the chain will automatically sell them the product, less the rental fee. If the customers don’t want to purchase the movie or game, they can return the product within 30 days for a credit, less a restocking fee.
“For the past year, the company has been testing a variety of rental options in markets across the U.S.,” it said in its statement. “In no-late-fees test markets, the increased rental transactions and retail sales offset the lower level of revenues resulting from eliminating late fees.”
It estimated that late fees would have contributed about $250 million to $300 million to revenue next year.
No word on what these restocking fees would consist of, but it’s still pretty significant for them to drop late fees considering what a money maker they can be. Of course, depending on how lazy the average Blockbuster customer ends up being, this new method could prove to be even more profitable in the long run.