The End of Late Fees. The Start of Restocking Fees.

Blockbuster video is rolling out the ads, proudly proclaiming their lack of late fees. It's a lie, a blatant use of false advertising and marketing gimmicks to revive their struggling business. They have single handedly made this once simple, easy to understand industry confusing, ridiculous, and misleading.

Walking into my local store today, I find the super-hot "Resident Evil 4" on the Gamecube. I immediately pick it up along with a nice set of miniature "Halo 2" action figures. Getting to the counter, the clerk is required to recommend the Game Freedom pass, a decent deal, especially during the holidays. With little new of interest on those shelves, there's no real reason for it right now.

What Blockbuster has done however, forces you to buy the $20 Game Pass. Oh sure, they have "cut" their late fees, but game rentals are now an insane $7.50. Yes, $7.50 for one game for seven days. That's a $2 increase from their old price structure (each store has their own pricing policies, this may be different elsewhere). Granted, there is a "grace" period of one week (meaning the rental is actually 14 days), it's absolutely no excuse for raising rates to cover for the lack of late fee revenue.

So what if I keep this game past the rental period AND the grace period? I'm charged for the game. The full price is usually around $50. Now, I have 30 days to return the game and get that $50 taken off of my account. It's not free though. Nope, you're charged a late feeÖerr, I'm sorry, a "restocking fee." I'm not even sure how much it is, but I can assure you that after paying nearly $8 to get my game, I don't want to find out.

A game is of course one thing, lasting well into the 20-hour rage, sometimes even longer. Movies don't last that long. At an average of two hours, what's the point of letting customers keep a movie for a dozen days? What's the point? How long could it possibly take to get through it? Also consider that movie rates have shot up a few dollars, it all adds up to a company that has literally ran itself into the ground with one of the worst marketing campaigns this country has ever seen.

What these ads fail to mention (ignoring the restocking fees, full retail price charge, price hikes, etc.) is that Blockbuster's late fee revenues have gone down significantly in the past year. Video Store Magazine posted all of the fancy numbers. There's no need for all of that here, just know that their "end of late fees" program is one to actually draw in more late fees... Err, restocking fees. Did it again, sorry. It's all very deceptive, something their ads seem to miss.

DVD has killed this portion of the industry. When you can walk into a Target or Wal-Mart and buy the movie for less than $15, why even bother renting it for $6? Just pay the extra cash up front and avoid all of the hassles and hidden charges that come with "no late fees." Blockbuster, you blew it. You've lost a customer and you're about to lose a lot more.

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Comments (2)

Here here! When I first heard about this, I looked into it and found the lies in the fine print. What a crock! I had no idea that there was a price hike in there too.

What really cracks me up is that they have a Netflix type business too. So I have got to assume that their Netflix type business is making way more money that the brick and morter stores are and the stores need something to justify their existance.

I really hate the ads since they don't seem to mention these finer points. Or if they do, it's in print that is so small it would take an 60" HD tv to see it.

Just thought I would ressurect this for good reason. Blockbuster is now being investigated by the attorney general.... in 36 states. Surprise, surprise.

http://www.homemediaretailing.com/index.cfm?sec_id=2&newsid=7152

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