Blockbuster (B&M) to drop late charges in 2005

[Scorch]

http://money.cnn.com/2004/12/14/news/midcaps/blockbuster_latefees/index.htm?cnn=yes

NEW YORK (CNN/Money) - Blockbuster Inc. announced Tuesday it is abolishing late fees on all its video tapes, DVDs and video games as of Jan. 1.

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.

Blockbuster has been competing with the growth of by-mail rental services such as NetFlix, which allow customers to keep movies as long as they want in return for a monthly fee. In August, Blockbuster started offering that kind of monthly rental service itself. It said Tuesday that service will continue in addition to this new individual rental policy.

"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.

The company said it also plans to lower its ongoing marketing, operating and promotional costs after implementing the change.

The company said as a result of the move it expects operating income in 2005 to be flat compared with 2004 results after an estimated $50 million it will spend to market and implement the change to a no late fee system.

Analysts surveyed by earnings tracker First Call had forecast that the company would earn 73 cents a share in 2004 and 67 cents a share in 2005. That works out to about a $6.5 million drop in forecasted earnings between the two years.

Blockbuster, which was spun off earlier this year by media conglomerate Viacom (Research), is in the process of bidding for competitior Hollywood Entertainment (Research), the No. 2 video rental chain. Hollywood Entertainment has entered into a merger agreement with buyout firm Leonard Green & Partners as well as Hollywood's top management to take the company private.

Blockbuster is offering $11.50 a share for Hollywood, or about $700 million, and it has said it would be willing to raise its bid subject to a review of company financial information.

Leonard Green and Partners is offering $10.25 a share for the company. Movie Gallery (Research), the No. 3 video rental chain, is also involved in the bidding.



You guys wanted rentals to buy? You got it. On January 1st, storm your blockbuster and rent the rare games and keep them, then pay the fee.

[rvdrock]

Good morning to you Scorch, but how much will they charge, that we have to wait and see...

[slidecage]

i did this once at one of our local video game stores. They were selling Nes games for 4.99 (some they were still renting) Well they had Dragon warrior 3 and 4 for rent and i though well if they are selling most of the other NES games for 4.99 I just keep it and pay the 4.99 when i say i lost it.. I went up rented the game (1 week rental) Went back the next week and say i lost it and would like to pay for it. The lady looked it up in the system and said that will be 100 bucks each.. I was like your selling the other games for 4.99 and she gave me a story about it would cost 100 bucks to replace the game... So becareful ....... Also on the VHS tapes those new movies run 120 bucks and what keeps people from just doing chargebacks..

[jimbodan]

Very interesting.

[Scorch]

Good morning to you Scorch

Good morning to you as well, how are things? Quite cold here in Nashville, a bit of flurrying.. currently 27 degrees.. high is 36, low is 19.. ouch. I woke up and was freezing.. kept sneezing and coughing.

i did this once at one of our local video game stores. They were selling Nes games for 4.99 (some they were still renting) Well they had Dragon warrior 3 and 4 for rent and i though well if they are selling most of the other NES games for 4.99 I just keep it and pay the 4.99 when i say i lost it.. I went up rented the game (1 week rental) Went back the next week and say i lost it and would like to pay for it. The lady looked it up in the system and said that will be 100 bucks each.. I was like your selling the other games for 4.99 and she gave me a story about it would cost 100 bucks to replace the game... So becareful ....... Also on the VHS tapes those new movies run 120 bucks and what keeps people from just doing chargebacks..

Yeah. If they're charging stocking fees, it's going to be around $100 for a game and $120 for a movie. No one would pay that.. I guess that's why they're so confident in eliminating the late charges.

[craven_fiend]

if only my local mom and pop store did this, then i'd be set. they have ogre battle for the ps1, but refuse to sell it

[Grave_Addiction]

i did this once at one of our local video game stores. They were selling Nes games for 4.99 (some they were still renting) Well they had Dragon warrior 3 and 4 for rent and i though well if they are selling most of the other NES games for 4.99 I just keep it and pay the 4.99 when i say i lost it.. I went up rented the game (1 week rental) Went back the next week and say i lost it and would like to pay for it. The lady looked it up in the system and said that will be 100 bucks each.. I was like your selling the other games for 4.99 and she gave me a story about it would cost 100 bucks to replace the game... So becareful ....... Also on the VHS tapes those new movies run 120 bucks and what keeps people from just doing chargebacks..

LOL. I bet you were like, "Maybe I'll go check at my house again."

[JohnnyDrama]

seems interesting

[starman9000]

They arent eliminating late fees, they are renaming them.

[Parathod]

My Blockbuster is 5 minutes from my house so this news is pretty good for me. There's been times where I rented a movie and intended to watch it, but I never got around to it in the short 2 days they give you. This might be Blockbuster's attempt to screw us, but how hard is it to return a movie or game within 9 to 15 days?

[ElwoodCuse]

This is either going to be really awesome or really terrible. On the one hand, it means you can really hang on to your rentals (especially games) for practically nothing. On the other hand, it might mean that there will never be anything worth renting on the shelves.

[Dead of Knight]

RETARDED. The only thing it's good for is to get rare movies and games, but then no one else will be able to get them either. Lame.

[MrBadExample]

I worked at a couple of Blockbusters and most of the time if you talk with a manager you can work out a reduced price for a "lost" rental - as long as it's not brand new. I've never seen a BBV that cared much for how their game rentals were stocked so I doubt they would complain too loudly. The thing to remember is to keep talking to higher and higher management until you get the answer you want. The higher you go, the less they want to hear a complaint and are more willing to compromise. And be polite as well.

I'm predicting that this will be the beginning of the end of BBV. They are writing off $250-300 million in late fee revenue for next year and they're also cutting back on their marketing? Not a good sign for the future. I seriously doubt giving a 2-week rental is going to boost sales much. Netflix must really be killing them. I'd love to see the mom & pop video stores come back.

Caveat: BBV screwed me out of vacation pay so I'd be happy to see them go belly up.

[hiccupleftovers]

I really don't care. There are baasically no rare games at my BB. All of them, (my guess) is that somebody already found them and kept them and said he had lost them. My BBV has such a bad selection it is not funny. I moved from them a long time ago and am now with Hollywood video who are much nicer than the people that tend to work at BBV. Netflix must really be killing them.

[Murcielago77]

wait so youre saying you can rent a game for a week, then keep it for like another 6 days then return it?

[jimbodan]

This is either going to be really awesome or really terrible. On the one hand, it means you can really hang on to your rentals (especially games) for practically nothing. On the other hand, it might mean that there will never be anything worth renting on the shelves.

My thoughts exactly. I haven't rented in forever, but do they still have that "guaranteed to be in stock" thing for new releases? If so then I predict a lot of people taking advantage of that when no returns the new releases for 2 weeks

[Kaijufan]

It sounds kind of stupid to me. People are going to rush in the day this starts and get all of the rare games and movies their store has.

[tenzor]

I am using their monthly pass thing, so this doesn't really matter for me

[Liza]

I work for this company...and let me tell you, this really isn't that bad at all. after attending a meeting the other day, i got really psyched about all this. I thought it was just going to be an even bigger hassle, but it's going to make my job easier and less stressful for many customers as well. it's just as it says...no late fee's. can't talk much about it right now, but trust me you will be a lot more happier with this new way.

i was quite sad/angered when i first heard about it. but now i can't wait to tell everyone about it. just don't knock it until you try it. i'm sure you all will be very happy though :)

[starman9000]

I work for this company...and let me tell you, this really isn't that bad at all. after attending a meeting the other day, i got really psyched about all this. I thought it was just going to be an even bigger hassle, but it's going to make my job easier and less stressful for many customers as well. it's just as it says...no late fee's. can't talk much about it right now, but trust me you will be a lot more happier with this new way.

i was quite sad/angered when i first heard about it. but now i can't wait to tell everyone about it. just don't knock it until you try it. i'm sure you all will be very happy though :)

My friend who works at bb said it was gonna make his job crappier. He said that when people try to return the movies they were forced to buy they will only get store credit.. Is that true?

Either way it makes my job at hollywood crappier because every idiot with a late fee now feels the need to say BB doesnt charge them.

[anionyx]

BTW, this is gonna be great for all the haters out there. You get to keep your movies or games for an extra 7 days past the due date. For no extra charge, no limits on how many times you are late. Games go up a few cents but it is nothing compared to late fees! It is true that you get charged if you do not return it but no business can let you borrow things forever :lol: They only charge you the current selling price, which means that if it is out used you get charged the used price of the item minus what it costs you to rent it!! How much better can you get? You then have 30 days to return the item and they will credit you what you paid. If you get charged on your ccard they will refund your ccard. If not, then returning the item will take the balance on your account(for whatever not returned) off. There is no catch to this, they just want people who use late fees as the reason they don't come to not have that as an excuse anymore. Plus Netflix (which I have had for 5 years) is in for trouble I think. They can not use late fees as a reason they are better than Blockbuster anymore and Blockbuster Online is only $14.99 a month now! I am on the trial for a month using the COOPER 4 week trial I may end up canceling Netflix if they have improved their shipping times and disc condition. :cool:

[MrBadExample]

BTW, this is gonna be great for all the haters out there. You get to keep your movies or games for an extra 7 days past the due date. For no extra charge, no limits on how many times you are late. Games go up a few cents but it is nothing compared to late fees! It is true that you get charged if you do not return it but no business can let you borrow things forever :lol: They only charge you the current selling price, which means that if it is out used you get charged the used price of the item minus what it costs you to rent it!! How much better can you get? You then have 30 days to return the item and they will credit you what you paid. If you get charged on your ccard they will refund your ccard. If not, then returning the item will take the balance on your account(for whatever not returned) off. There is no catch to this, they just want people who use late fees as the reason they don't come to not have that as an excuse anymore. Plus Netflix (which I have had for 5 years) is in for trouble I think. They can not use late fees as a reason they are better than Blockbuster anymore and Blockbuster Online is only $14.99 a month now! I am on the trial for a month using the COOPER 4 week trial I may end up canceling Netflix if they have improved their shipping times and disc condition. :cool:

Does anyone currently working at BlockBuster know the specifics? I'm willing to bet they will try to charge you full retail price (which is already much higher than what they paid for it) rather than a used price unless you raise a stink with the manager.

I doubt this will hurt Netflix at all since it's still more convenient to get dvd's in the mail.

[anionyx]

I do work for Blockbuster and they are going to charge used if used price is out and blockbuster.com is dvd's thru the mail. blockbuster.com is now 14.99/month compared to Netflix at 17.99 month. Netflix has said they will not lower their price and Blockbuster's shipping is getting better every day.

[Negative]

Does Blockbuster put those annoying CD Security inlays over their PS1 games? Local Blockbuster has a Rhapsody just sitting there and I'd love to get my hands on it, but if it has that, forget it.

[anionyx]

You can always ask to look at the game to make sure before you buy it but we don't use them anymore on new games because we're afraid they may mess up people's systems.

[MrBadExample]

I do work for Blockbuster and they are going to charge used if used price is out and blockbuster.com is dvd's thru the mail. blockbuster.com is now 14.99/month compared to Netflix at 17.99 month. Netflix has said they will not lower their price and Blockbuster's shipping is getting better every day.

I hope Blockbuster treats you more fairly than they did me. They screwed me out of 2 weeks of vacation pay.

[sj41]

Oh man. They're advertising this. :lol:

[Kaijufan]

Oh man. They're advertising this. :lol:
Lol I also saw the ad.

[FriskyTanuki]

Oh man. They're advertising this. :lol:
Lol I also saw the ad.

I saw it, too. It's as stupid as their ads.

[neocisco]

I just saw it too. They're literally treating it as the second coming. :roll:

[Zenithian Legend]

Oh man. They're advertising this. :lol:
Lol I also saw the ad.

I saw it, too. It's as stupid as their ads.


Ya I caught that commercial too, I doubt this policy makes it to 2006

[Steggy]

damn that pisses me off... i just had to pay 22 dollars in late fines!

[zzl365]

Between this and movie/game pass or whatever it's called, nothing will ever be in stock at my Blockbuster, especially because unless the game is super high profile my BB only gets 1-2 copies of each game. I was hoping BB would give some sort of incentive for returning a game/movie on time (like 2$ credit or something) which would at least help with keeping items in stock.

[Zenithian Legend]

damn that pisses me off... i just had to pay 22 dollars in late fines!

would you have had to pay the late fees for stuff you rented before the new policy started if you turned them in now?

[radjago]

I think if any thread needed this, it's this one.

IT'S A TRAP!

[gsr]

saw the ad for this last night..

they need to get rid of the stores entirely and just make them all warehouses for their online rental

i mean they're encouraging you to rent online..14.99 for two movies out at a time whereas the same thing in store is 24.99

[Liza]

if you're planning on holding on to rentals longer than the intended due date...don't forget all about those dumb automated calls and cards. they'll still be sending those out to nag you to bring the rentals back.

i like how they're straight up charging people who hold on to it longer. less late fee arguments. customers have to take some responsibilty you know?

[Liza]

yeah the ad is really stupid hehe. they act like it's so revolutionary. i mean...it's quite a change, but they didn't have to be so corny about it lol.

[Scrubking]

i like how they're straight up charging people who hold on to it longer. less late fee arguments. customers have to take some responsibilty you know

Word

[greendj27]

I'm guessing the fact that they automatically sell it to you after a month and then give you store credit after eventually gets challenged in court. They can't make someone buy something if they don't want to. Especially since this is new and many of their customers signed up before this policy went into effect thereby never agreeing to these terms.

[Astinus Majere]

I'm guessing the fact that they automatically sell it to you after a month and then give you store credit after eventually gets challenged in court. They can't make someone buy something if they don't want to. Especially since this is new and many of their customers signed up before this policy went into effect thereby never agreeing to these terms.

It gets charged to your account, if you return it the charge gets taken off your account. If you have a credit card on your account it will charge the card, but if you return the movie they can refund the price back onto your card.

[greendj27]

I'm guessing the fact that they automatically sell it to you after a month and then give you store credit after eventually gets challenged in court. They can't make someone buy something if they don't want to. Especially since this is new and many of their customers signed up before this policy went into effect thereby never agreeing to these terms.

It gets charged to your account, if you return it the charge gets taken off your account. If you have a credit card on your account it will charge the card, but if you return the movie they can refund the price back onto your card.

I thought the article said that they only give you store credit back.

[Astinus Majere]

I'm guessing the fact that they automatically sell it to you after a month and then give you store credit after eventually gets challenged in court. They can't make someone buy something if they don't want to. Especially since this is new and many of their customers signed up before this policy went into effect thereby never agreeing to these terms.

It gets charged to your account, if you return it the charge gets taken off your account. If you have a credit card on your account it will charge the card, but if you return the movie they can refund the price back onto your card.

I thought the article said that they only give you store credit back.

Well then the article was wrong, I work at blockbuster and we can refund the credit card if it gets charged.

[greendj27]

I'm guessing the fact that they automatically sell it to you after a month and then give you store credit after eventually gets challenged in court. They can't make someone buy something if they don't want to. Especially since this is new and many of their customers signed up before this policy went into effect thereby never agreeing to these terms.

It gets charged to your account, if you return it the charge gets taken off your account. If you have a credit card on your account it will charge the card, but if you return the movie they can refund the price back onto your card.

I thought the article said that they only give you store credit back.

Well then the article was wrong, I work at blockbuster and we can refund the credit card if it gets charged.

In that case I hereby rescind my first post. Sounds like a pretty good idea now. :P

[smalien1]

My BB has RE2 GC

[radjago]

I'm guessing the fact that they automatically sell it to you after a month and then give you store credit after eventually gets challenged in court. They can't make someone buy something if they don't want to. Especially since this is new and many of their customers signed up before this policy went into effect thereby never agreeing to these terms.
Yes, but it's likely that those terms stated that Blockbuster reserves the right to change the terms at any time, for any reason, without prior notification.