Blockbuster to cease charging late fees.

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.

9 thoughts on “Blockbuster to cease charging late fees.

  1. I sort of like this system. Late fees don’t work because if you argue with them they will almost always void the late fee. It’s not worth arguing with a customer over such small amounts of money.

    With this system if I rent it and like it I can just own it. This may work very well on hard-to-find movies that Blockbuster has for rent.

  2. I was charged $59.99 for a VHS copy of Orgasmo when I failed to return it over the holidays last year, it was overdue by 2 weeks. Of course this charge was dropped when I complained and returned the video upon returning home from the holidays but, you can see the direction this new procedure will go. They will not be charging you the $19.99 BestBuy price but instead some bloated video retail price that they decide upon. Rest assured Blockbuster is doing this to make more money not to benefit the customer. Blockbuster=Satan IMHO grin

  3. I’m not overly happy about this new little ploy either.

    They make it sound like there are no late fees when clearly there is a “fee” if the movie is later than 1 week. It sounds to me like they are just rewording the way they deal with late fees.

    I want to know how much the items are going to cost if I were to keep them, games included.

    Then there is the “credit” for returned items past the one week time frame. Is this a money back in your hands credit or a store credit?

    Why would I be getting a credit anyway? Are they going to be charging my credit card automatically after the 1 week time frame? Or are they going to be holding a store debt until I pay the next time I go in to rent another movie.

    I think I would rather have the late fees, thank you very much!

  4. sell them the product

    That’s the catch. To buy a “rental movie” (i.e. a movie you can rent out to people), you are looking in the 80 UKP bracket (in comparison, a “consumer purchasable” copy – retail – goes for between 9 UKP and 19 UKP). Obviously, they can’t afford to sell their movies at “below cost price” so…

  5. Wow, Chazzy666, I thought the penalty for renting Orgazmo was way higher. Man, the times, they are ‘a changing.

  6. If this is a revenue-nuetral ploy it will probably fail—afterall if my wallet is still lighter the same amount of cash in the end that means some of BB’s customers are still getting shafted. Hell, procastination is a American pastime—we should’nt be penalized for it. Competition what a wonderful thing!

  7. Ok you overley-cynical cerebral mice, here’s how it works, ‘cause I’m tired of listening to everyone piss and whine:

    You can turn in a movie up to 7 days late; there’s no charge. After 7 days the price of the movie is charged to your account, minus the rental cost. This price ranges from $4.99 to 21.99 for movies ($1.80 to 18.70 after rental cost, at my store). Yes, if you have a credit card listed on your account, the card will be charged. If you don’t like this just go into your nearest store and ask for the number to be removed (do so politely, because I’m going to start carrying a crowbar just for you a-holes). If you then turn the rental in within the next 23 days, the charge on your account is removed, or credited back onto your credit card, less the $1.25 restock fee.  Customers are not getting screwed over, as much as you people love to play your victim card. This is a revenue-neutral poilicy, Blockbuster doesn’t make money off of it.  They benefit from having an increased volume of customers who blow their cash on popcorn and crap, as well as decreasing competitors customer volumes, and increasing their stack value. Now shut up!

  8. You think this is piss and whining? Man, you haven’t seen piss and whining around here yet. This is nothing.

    As for Blockbuster’s new system, given the tendency of so many companies coming up with new ways to generate revenues through fees that they play up as a service to their customers, it’s not all that unreasonable to be a bit cynical.

  9. I worked for Blockbuster for five years in management and I can tell you they do nothing that will not make them some money.  Greed is their driving force.  Avoid them at all costs.  Don’t say I didn’t warn you.  I don’t work for them any more or shop with them or trust them.  Never will.

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