After Major Losses, Blockbuster Brings Back Late Fees
Mar 4, 2010 by Rob FrappierBlockbuster has reintroduced late fees on store-based movie rentals. Learn the details of Blockbusters new policy here.
Blockbuster, the once mighty king of movie rental stores, has fallen on hard times. According to a recent MarketWatch report, the company experienced a fourth quarter loss of $435 million dollars. Additionally, as we reported last year, the company is planning to close hundreds of stores across the United States. Considering its financial problems, you don’t have to be an economist to see that Blockbuster needed to shake things up. Of course, the steps the company has taken to earn back some of their revenues may rub customers the wrong way.
According to a report in Home Media Magazine, Blockbuster has quietly reintroduced late fees (though they’re not calling them that) as part of the company’s in-store rental policy. Per the new rules, a $4.99 DVD or Blu-ray rental may be checked out for five days. If the rental is not returned by the fifth day, customers will face a $1 per day fine, which will cap at $10. So, in essence, if you check out a new release and don’t bring it back, you owe Blockbuster $14.99.
Previously, Blockbuster customers were allowed to keep a movie for seven days, but if they didn’t return it on time, they were charged the retail value of the DVD. If the customer returned the DVD within 30 days, the charge would be rescinded, but the customer would still be hit with a $1.25 restocking fee. This policy, which was heralded in Blockbuster commercials as “The End of Late Fees,” also caused the company some problems when a California court ordered that Blockbuster’s advertising was misleading.
While I don’t find Blockbuster’s new policy particularly troubling ($14.99 is high for a DVD, but it’s not extortionary), at this point it’s sort of like rearranging deck chairs on the Titanic. Correct me if I’m wrong, but doesn’t the age of in-store movie rental seem long gone?
Let’s take a look at the movie rental market. On one hand, you have Netflix, which pioneered the “sit on your couch at home and let DVD’s come to you” approach to movie renting, hitting an all-time high in its stock value ($70/share). Then, on the other hand, you have Redbox, which, despite disagreements with studios over when to release new rentals, is popping up on every corner with no-hassle $1 per day rentals. And don’t even get me started on live-streaming movies online. Once that really begins to take off, where will the Blockbuster model fit? The answer: nowhere.
What do you think, does the return of late fees make you mad? How do you rent movies?
Source: Home Media Magazine via /Film
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I think it's a bad move. Why suddenly bring back late fees? As it is, a “restocking fee” was just some clever way for them to still have extra revenue for late items. Either way, people are still going to turn stuff in late. Blockbuster has usually been known to forgive a late fee anyway, if someone contests it. They would rather keep a returning customer by forgiving a fee, than risk losing one. I think it's a joke. Also, for a little more than the price of one rental at Blockbuster, I can pay for an entire month of Netflix, giving me not only DVDs, but a near limitless library of instant content. Sure there are pros & cons to both Blockbuster & Netflix, but to have no late fees and watch almost anything, “right now”, I think Blockbuster is going to have to re-evaluate how they do things. That's just my take.
On occasion I like the option of driving by my local BB (I have 2 one on each “side” of my homes location) and stopping in.
Im still able to find stuff I cant get via Netflix. When I catch the whim and want to see something tonight I really dont want to be limited by what Netflix had available to send me at that time 2 days ago.
So until anything and everything is streamed I still like my BBs and they have a place. They just need to figure it out. Maybe this will reopen mom and pop stores… (met my wife at one…11+ years now..
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I think the move will not hurt blockbuster as they are planning on closing more additional stores this year. Blockbuster by far has come along way since just the in store service. Blockbuster also has a “Netflix” type of service and same with a “Redbox” dupped Blockbuster Express. While the Express machines are new Blockbuster didn't run into the studio agreement issues since they studios already have contracts with Blockbuster.
The online rental service is helping Blockbuster too. With customers able to come exchange their rentals for either free movies or discounted to a $1.99 it really isn't that bad. Plus, they just announced the availablity of video games on their online site much like “gamefly”.
While it seems that Blockbuster is in a hurt market with other rental stores shutting down, Blockbuster has also openned their retail Outlet stores that sell previewed movies and new releases as well.
We are going into a digital world, no doubt about it. Some people will still always want to have a product in hand. So these charges of $1 a day, isn't so bad when all things considered the people who rent from Redbox keep their movies on average 3-5 days anyway. These fees aren't the best but it won't stop people from renting a movie when all the other “Redboxes” don't have it or on demand doesn't do it's same day as dvd.
$5 for 5 days with $1 a day after that isn't a bad trade off plus now all the b-horror movies I love might actually be back sooner since they're always rented out.
I'll never go back to BB again. They screwed me over one to many times. I'm a big user of Netflix, so i think until they start streaming their entire collection, the physical media will continue to play a big role in our movie watching society. And I have no idea how many households don't have a broadband connection to stream media. On the rare occasion that i need a film right now, i stop by our local Family Video. While their selection is mostly recent and within the last 5 years and nothing beyond that, their prices and rental terms are unbeatable.
$14.99 to RENT a DVD? You can buy one for that price or even less!! I rent from Redbox. It's right there in the Wal-Mart (so you don't have to make a second stop at Blockbuster) and it's $1 per day!! Blockbuster can't even compete! Also most of the Blockbuster locations around my area are gone now… It is kinda too bad to be honest. I liked going to Blockbuster. I liked the atmosphere and vibe and I'd have good conversations with employees there too… It really is a shame, but Blockbuster is just gone. R.I.P. Blockbuster
would this company PLEASE PLEASE die already!?!?!?!? There's are few companies i loathe more than blockbuster. They stole billions and billions of dollars from customers for decades with their schemes. Death to bbuster!
This zombie of a company still thirsts for brains… someone please put it out of its misery already. Why would anyone deign to pay late fees, no matter what their selection? What are they Kevin Bacon in Animal House? (Thank you sir! May I have another?)
I'll take Netflix streaming and Redbox for the win. If there is some title that I can't see with the two of them, I look for a used copy on Amazon. I can always resell it when I'm done.
yea I used to rent movies at blockbuster all my life at least 5 movies a week but as soon as netflix and redbox came out I never went back. I mean it was 20$ for 4 movies at blockbuster or 4$ from Redbox for the same movies its a no brainer, and Netflix is even cheaper bc I can rent as many was I want for only 11.99$ a month. “I still cant c y blockbuster doesnt make their own “bluebox” type of thing or do something allong the line I mean their name alone synonimus with movies, they just need to realize the day of charging 5 or 6 bucks for a movie is over.
Blockbuster is still around. Hmmm…go figure. Netflix is the way to go! On-line streaming and 3 DVDs at my front door. Netflix. Only $16.99 a month. Netflix.
They should really compensate me on my next bill for that little bit of free advertising.
I really dont see a point in paying 4.99 to rent a dvd for 5 days when at red box I pay only $1 and watch it that same day then return it for only $1
I used to work for this company and I'll just say that major money was made by late fees. Some people would rather pay the late fees than return the product.
ive returned games on time and still got charged late fees because the dim wits didn’t find my return until days later. this has happened more times than i can remember …
How is the new “late fee” policy any different than what people would be paying at Redbox? The average Redbox renter keeps a movie for 6 days. 6 days. If you keep that movie from Blockbuster for 6 days, guess what, it costs the same. I totally agree that if you have the self discipline to keep a movie for only one night, by all means, the better deal is clearly to rent at the machine in the supermarket. But something that Blockbuster will always have over the competition is customer service. What do you do with a movie that doesn't play properly at Redbox or at Netflix? Does it get mailed back, wait another 4 days to get a new one, and then get to watch it? Or do you return it back the little machine at the store? Any negative experience I have had at Blockbuster, they have always taken care of. Besides, I can't help but prefer to talk to a real person when I do my shopping and have questions about movies.
As far as the 14.99 thing goes. That is at most what you would pay, and you at that point get to keep the movie. If you keep the same movie from Redbox for that long, you will have paid 20 dollars for it, and it automatically gets charged to your credit card. A machine and a mailbox is not very forgiving. Whereas any experience I have had, the people down at the Blockbuster will usually hear me out, and help me out.
Who cares…? Blockbuster is old as dirty dirt. I still rent from them only because its literally across the street. They hardly have enough new releases anyway
If I don't go to see the movie at a theater, I rent it streaming through my tv from Amazon.com either in standard or HD if the movie is worth watching in that format for the extra dollar. It's cheaper than my cable company's on demand prices.
I rarely go to Blockbuster anymore anyway. I'm a lazy person and always got caught into the trap of late fees. I don't much care for the Netflix/Blockbuster home rental programs either. I'm not going to pay for a chance to eventually rent a movie I want to see when it becomes available. And a monthly price from them on top of the rental fee for the movie. And then have to deal with mailing it back and forth as well. And possibly even a broken dvd issue or what not.
The only reason I'd still go to Blockbuster currently is if I didn't want to wait for the few weeks the movie would not yet bet available on demand, yet was available to rent or buy from them, etc. But that time gap is getting shorter and shorter and I've got plenty of other things I can do in between.
Where did you get that average Redbox use statistic from? Everyone I know returns the movie within 24 hours. Just curious as to who the lazy sloths are and if the study could show if such users were located in specific geographic regions.
Blockbuster is screwed. I just went to rent today and was told about the policy. I can say after today that I will never rent from them again.
I just found out about the new policy today, when I found a charge to my credit card. I called and was told my movies were turned in 4 days late, but because my account wasn't marked that they told me, I could get a refund by coming into the store. I didn't even get the recorded message reminding me they were due, like they used to due before charging my credit card. This just added to my decision to avoid Blockbuster. When I rented these movies I found the prices had gone up the week before. What was 1.99 was now 5.00! For a non-new release. Why would I pay that? Plus, nothing is alphabetized anymore, just stacked on the shelves horizontally. It has looked that way for months, like they were in the process of remodeling. We used to have Netflik, we may go back. We got the movies the next day after ordering them. Or we have a Red Box down the street. We used on on vacation in Puerto Rico (I know, we should have stayed away from the tv, but 3 teenagers couldn't manage without English movies!) and it was great. No more Blockbuster for us. This won't help them at all, how can it?
I just found out about the new policy today, when I found a charge to my credit card. I called and was told my movies were turned in 4 days late, but because my account wasn't marked that they told me, I could get a refund by coming into the store. I didn't even get the recorded message reminding me they were due, like they used to due before charging my credit card. This just added to my decision to avoid Blockbuster. When I rented these movies I found the prices had gone up the week before. What was 1.99 was now 5.00! For a non-new release. Why would I pay that? Plus, nothing is alphabetized anymore, just stacked on the shelves horizontally. It has looked that way for months, like they were in the process of remodeling. We used to have Netflik, we may go back. We got the movies the next day after ordering them. Or we have a Red Box down the street. We used on on vacation in Puerto Rico (I know, we should have stayed away from the tv, but 3 teenagers couldn't manage without English movies!) and it was great. No more Blockbuster for us. This won't help them at all, how can it?
Only a year ago Blockbuster's focus was to become a “best buy” that rents movies, funny how things change so fast. I am a former manager for the company, and some of the info is inaccurate. Actually, last November they changed the return policy. Customers always had 10 days past the due date to return the movie with no additional charges. On the 10th day past due the movie sold to the account for the previously viewed price (unless that particular store didn't have any previously viewed copies of that movie, then it sold for the listed new retail price). Customers USED TO have 30 days to return the movie after that to receive a refund minus the $1.25 “restocking fee” (they said restocking fee pertained to the cost of ordering a new replacement copy- but the store I worked at NEVER had the movie “replaced”-unless it was the very last copy). Late last year they changed the policy so you only had 10 days past the due date to return the movie before you ended up buying it at full price. At this time they re-introduced the late fees on game rentals, customers payed $8.99 for a game rental and then if it wasn't back by noon on the 5th day, you were charged a dollar a day until it sold on the 10th day. Even if you purchased the game after that you were still responsible for those late charges- seems like they were easing people back into the late fee concept. Blockbuster is dead. I saw things go from “bad” to “terrible” in the 1 1/2 years I worked for them. The stock is worthless, and I guarantee by this time next year they will be closing shop. Their “restructuring” is basically a last ditch effort to establish themselves in the mail and streaming markets, but to do so they must offer a service that compares to those already available, and at this they have failed miserably. Honestly, who wants to pay more for a mailing service that has less variety and takes twice as long to receive and ship movies? Or pay $2.99 – $5.99 per movie to stream instantly online when they could pay netflix $8.99 a month and watch as many movies as they want, and have a better selection. The areas Blockbuster expects to make up ground are really hurting them more, the only advantage they have is the selection within the brick and mortar stores (and instant gratification), which they are taking their focus away from now, which will only mean the end will come that much sooner.
I could no agree more! I used to be a staunch Blockbuster patorn until all this came about. Now I just received my Droid X, which has a Blockbuster app pre-installed. Currently I’m a Netvlix subscriber, and love it. When I enrolled into the Blockbuster app, I found out that I had to set this up on my computer first, then I learned that it would cost me $3.99 just to stream a movie to my computer or my new phone, on top of the monthly subscription price, WTH (what the heck), why would they charge this price when the compitition does not charge anything extra? TO quote SNL “Really…Really…Really” come on. And what was Motorola and VerizonWireless thinking, putting this on the phone, why not Netflix where the future is solid?
It’s gotten even more ridiculous a year later. Dollar a day rentals? Sounds good for movies since you just watch it and then return it. Not the case with video games. Any game worth playing takes, at best, several days to complete a single player campaign. But with this dollar-a-day set-up, games are also due back the next day or it is a $2 late fee.
Who in their right mind actually thought that was a good idea? Having to keep running down to the rental store and rechecking it out? I really liked the small grace period, and a dollar a day would have been fine by itself if there was simply another dollar added each day you were late. That’d be no different than rechecking it out several times but without the hassle of going down and doing it yourself.
I’ve been a member of their online service for a year now (and have been doing business in the stores since they first appeared).. and I’ve got to say, I’m just really sad to see the state they’re in, and quite disappointed. They allow DS rentals in the stores, yet not with the online service.. why? They claim to have a higher selection/quantity but there’s plenty of games and movies that are listed as “Not Available” or “Very Long Wait”. Some of these are a mere 2-3 years old.. that shouldn’t be happening.
In reality, a large chunk of the online rentals are coming from different stores so if the stores don’t have it, you’re not likely to be renting it. This on top of the way the stores are handling transactions is just hastening the end for Blockbuster. Their online service is pretty decent, and quite well priced, but it’s still lacking in efficiency, and the stores themselves are only compounding the problem.
As a former BB employee, I hated telling customers they had “extended viewing fees” on their account. Some folks didn’t seem to care but many of them were quite angry. I took a lot of abuse from pissed off customers and manegement told me “just deal with it”. Now that the store I had worked at has closed, I somehow, feel vindicated. BB pissed on their customers for MANY years and now their customers are returning the favor. I would be very shocked if BB stores remained opened another 5 years or more.