“No late fees” at Blockbuster….hip-hip….hooray?
Blockbuster, the movie rental giant that over the years have run over every small market video store in their quest to be number one have finally broken the straw on this consumer’s back.
I admit it, when Blockbuster first came to my neighborhood, I too abandoned my local “Mom and Pop” video shop for the land of better availability and wide open aisles of video tapes. I was in awe of their library and grew tired of having to put my name on a waiting list (actually it was an index card) so I could rent “Batman” when it first came out on tape. Over the years, this love has started to fade away until there is nothing but disdain for this company.
First it was their shoddy customer service and the inability to even have a conversation with any of their high school employees without getting a “yep” or a “nope”. Did I mention their late fees yet? These late fees made Blockbuster rich to the tune of almost a quarter of a billion dollars per year (2004). I hated having to fork over almost $5 per tape even if they were one hour past due.
Blockbuster (with all of their money and their initial Viacom relationships) has always acted behind the eight-ball when it comes to anything new. They were slow to make the transition to DVD’s from VHS and they were slow to new competition (NetFlix) in a new market environment (the internet). Only recently, they have bottomed out their prices to grasp at the customer base of NetFlix and over the long haul will be forced to raise their prices.
This brings me to their “no late fees” policy. Again, I stress that they are only reacting to NetFlix and certainly not trying to repay the remaining loyal Blockbuster consumers. True they will not charge late fees but if your movie is not returned within 7 days after the due date, you will automatically be charged the lowest retail price of the movie. You may return the movie within 30 days and be refunded for the cost of the movie minus a $1.25 restocking fee.
Why would Blockbuster forego almost one quarter of a billion dollars in late fees for 2005? Please view an excerpt from an article from Eric Hellweg, on the CNN Money site:
In other words, it's unlikely there will be a loss in revenue -- a win for Blockbuster.>
In other words, only Blockbuster can truly celebrate the “no late fees” policy. Is it a win-win scenario for everyone?
Well…I think I will go online today and rent out “The King of Comedy” by Martin Scorsese from NetFlix.