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January 12, 2005

The "End" of "Late" "Fees"

Blockbuster Video has large signs announcing "the end of late fees." That seems to mean that if you're more than a week late returning it, they don't want it--in fact, you've bought it.

I foresee a future of many, many not very voluntary DVD-disc purchases...

Posted by DeLong at January 12, 2005 07:30 PM

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» Blockbuster - The End of Late Fees from BusinessPundit
Brad Delong isn't impressed with Blockbuster's "no more late fees" campaign. There are several comments from Blockbuster employees stating that if you don't return it... [Read More]

Tracked on January 13, 2005 07:38 AM

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A good post on Blockbuster's claim to the end of late fees Bloggers blur journalistic privelige Word of the Year 2004 voting from the Linguistic Society of America (and a good linguistics blog History Carnival, a roundup of history links An interview [Read More]

Tracked on January 16, 2005 07:03 PM


Until last week, I worked at a Blockbuster Video store in Glendale, and while I harbor no love for the company, I feel obliged to point out that the "no late fees" program is not as bad as you've described. Yes, you will get charged the purchase price if the tape isn't returned after one week (actually, we were told not to use the word "charged", but rather to say "the tape will be sold to you.") But even after that, you still have a month to return the tape and get a full refund. So there.

Posted by: Julian Fischer at January 12, 2005 07:41 PM

A second hand DVD will be sold to you at full price. You can get a refund, but it's for store credit, not cash.

"No late fees" actually means "A longer grace period then much higher late fees". They've learned the presentation lessons from the Bush Administration economic team well.

Charging the a further rental period as a late fee is reasonable. Charging a factor of 10 over that and not offering any full recourse is not.

If you miss a loan payment, the bank can call the whole thing due and cause you trouble that way, but can they just up payments due by a factor of 10? No, they can't (although they do seem to often charge back interest), and to allow it would result in short term gain in profits for the banks, followed by economic misery and major problems in the medium term.

They clearly can't raise their profits by 'honest business' of increasing sales, or expanding their market - shareholders demand increased profit and this is how they will deliver it.

Posted by: MadJock at January 12, 2005 08:19 PM

If this is really what "no late fees" means, then I forsee Blockbuster losing an awful lot of customers.

Posted by: Matt Austern at January 12, 2005 08:21 PM

No problemo, I'll just head on over to Hollywood Video. What do you mean they are merging?

Posted by: jerry at January 12, 2005 08:39 PM

It is indeed what 'no late fees' means. From


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.

Posted by: MadJock at January 12, 2005 08:44 PM

And a restocking fee! I missed that one.

Posted by: MadJock at January 12, 2005 08:48 PM

Not all Blockbusters do this-- apparently the ones here in Nashville are franchised & don't participate in this program. Pissed enough people off to make the front page of the Tennessean (not that it's worth a crap anyway).

Posted by: latts at January 12, 2005 08:53 PM

"If you miss a loan payment, the bank can call the whole thing due and cause you trouble that way, but can they just up payments due by a factor of 10? No, they can't (although they do seem to often charge back interest), and to allow it would result in short term gain in profits for the banks, followed by economic misery and major problems in the medium term."

Well, in fact, one credit card payment missed can result --all too easily -- in a rate hike from, 2.99 % (a common rate for transfers from other accounts) to 29.99 %. On 20K, roughly $600 a year becomes $6000 a year. Now, what was that point about banks?

Posted by: Spring at January 12, 2005 10:42 PM

"You can get a refund, but it's for store credit, not cash."

Sorry, should have mentioned that little wrinkle. For what it's worth, we employees were told that this store credit can itself be credited back to the customer's credit card.

Posted by: Julian Fischer at January 12, 2005 11:43 PM

Spring - I'll assume you're not in agreement that the definition of such an institution is really 'bank' but rather 'loan shark'. Otherwise the 'Next Generation' impression of 20th Century humans as Ferengi wasn't far from the mark.

And if people in the US truly have succumbed so much to the propaganda that surrounds the 'free market' mantra that 'caveat emptor' extends so far as that, then all the pontificating on the website of a Berkeley economics Prof doesn't mean a damn - last time this happened it took a Depression to correct it, and for a whole generation of Americans to know the effects.

Now that those Americans are mostly dead, and the younger generations bamboozled, it seems the Republicans can enact their dream of destroying the New Deal and eating all the pie for themselves. A smaller pie at that, but it doesn't matter because it's all theirs.

So when the rest of the world call due the loans to the US, currently repaid at some obscenely low rate, what interest rate will America's debt rise to? The wingnuts that scream 'free market' today will be yelling 'invade China' when they feel the brunt of it.

Posted by: MadJock at January 13, 2005 12:10 AM

One word: Netflix.

Posted by: Syaloch at January 13, 2005 04:45 AM

Blockbuster has sucked for years. Mediocre selection, poor employee treatment, high prices. I make a point to avoid them.

Netflix will eat them alive. Good riddance.

Posted by: Tim B. at January 13, 2005 06:47 AM

Syaloch is right. Netflix and Blockbuster are in a struggle to the death on DVD rental over the internets. This is the sort of bad news that can tip the battle to the little guy.

Go little guy!

Posted by: yam at January 13, 2005 06:49 AM

Actually I think this new program is a really bad idea but for a totally different reason. Here's why: Most rentals are 1-week rentals, but now you have a "1-week grace period" to return - with no late fees or any other kind of fees charged. What incentive do customers have to return their movies within the original 1-week (or 2 day in the case of new releases) period? Now people are going to keep their movies for 2-weeks, or 9-days and return them without late fees. This will make my Blockbuster store, that already has way too small of a selection and way too high of a % of movies out and therefore unavailable to rent when I want to have even worse availability problems.

Posted by: Shane Wealti at January 13, 2005 08:29 AM

I've completely given up on renting videos. For the past couple of years, I've relied on my local library's extensive collection and it's $0.75 reserve fee if the DVD happens to be out.

With such a resource, I don't see a need for NetFlix.

Posted by: Larry Brennan at January 13, 2005 08:41 AM

It's all part of Blockbuster's *cunning plan* to compete more effectively with Netflix.

Posted by: Alan Bostick at January 13, 2005 08:42 AM

I noticed those signs too, which were conspicuous by lack of details both on the sign and in the stores... and on the internet.

Posted by: Brian at January 13, 2005 09:13 AM

Two and a half words: P2P file sharing.

Posted by: Matt at January 13, 2005 09:25 AM

Yeah, if you keep the video for longer, you're far more likely to forget about it. They want you to keep it for 9+ days. They want you to think you're pulling one over on them. They want you to keep the damn thing for life.

Posted by: Joe at January 13, 2005 09:28 AM

netflix for 3 movies is approx. $20 a month. I've been a subscriber for three years now and my per movie price is down to about $0.25 per movie. add in the free postage, quick delivery time, no late fee nonsense, intuitive rating system and excellent recommendations and i'll never "make it a blockbuster night" again in my life.

Posted by: cali_ at January 13, 2005 09:28 AM

Many credit card agreements now have language that if you miss a payment on ANY card, not just the one in the agreement or cards with the same company, they'll raise your rates to usuurious levels.

Hey doesn't the Bible say usury is wrong? Where are the people who believe on that issue?

Posted by: Mark at January 13, 2005 09:31 AM

Larry Brennan: when you say 'local library', where is that? It's great that you have that option, but I would hazard a guess that a very small percentage of Gringos has access to a library with more than a token DVD selection. I'm in San Francisco, and the libraries here have a fair selection...but nothing that compares to NetFlix.

Posted by: Tom Hilton at January 13, 2005 09:47 AM

Blockbuster Video is no damn good.I once played on a softball team sponsored by Blockbuster Video. We lost all our games. The third baseman had 2 grounders go between his legs in one inning.

Posted by: JRossi at January 13, 2005 10:32 AM

I'm surprised Blockbuster has any customers left before their new announcement. They have always treat their customers "guilty until proven innocent" with video rentals. It's just a video, forgawdssake!

Posted by: sugarmama at January 13, 2005 11:11 AM

My usage of blockbuster has actually gone up since they instituted their new policy. It used to be they'd call to remind that you were late only after they charged you the fee. Now you have a few days to return the item even after they call you before getting charged. It sounds like a pretty good deal to me. How much can the restocking fee be? No worse than two weeks of late fees, which is what it would be under the old system.

Netflix is out for me because I never spend more than $15/month on rentals. I'll probably save even more money because I'm now less likely to buy crappy DVDs for my kid if we can rent them and keep them for more than a week.

Posted by: Brian at January 13, 2005 11:16 AM

I've traditionally preferred Blockbuster to Hollywood Video because if I return the movie on time and the store screws up and thinks it was late, Blockbuster fixed it without argument (this happened twice) and Hollywood did not (once, and I wrote a nasty letter to their HQ and got a call from a manager who said they'd so something about it -- but then they never did).

I haven't tried Netflix because we rent an average of one movie every two months (actually less, now that I'm blogging). If they came up with a plan that fit our usage, I'd look into it. But the last thing I'm looking for is something to provide time suckage.

Posted by: fling93 at January 13, 2005 11:38 AM

Blockbuster will not offer films with "objectionable" content, and in response to these so-called standards of decency,studios release a version of a film edited for content. Normally that won't be indicated on the packaging, so you take home a slasher film and wonder what happened to the spurting blood you vividly remember from the theatrical release.

Posted by: GJEEK at January 13, 2005 01:42 PM

Tom Hilton - I'm in Burlingame. The San Mateo library system has a very extensive video collection (at a dedicated location), which you can order from and pick up at your local library. Some libraries in the system won't send their videos out, but they will hold them for pickup.

San Mateo county probably has the best suburban library system I've ever encountered.

Posted by: Larry Brennan at January 13, 2005 01:51 PM

How can anyone choose Netflix over Blockbuster Online? $18 compared to $15, equal number of rentals, more distribution points, plus two extra GAME or movie rentals in-store every month. The only reason I can see is if netflix has a closer distribution point. Of course I am only comparing the online products of each.

Posted by: WesB at January 13, 2005 03:54 PM

Palo alto main library on Newell is also good. As is the Redwood City library which can draw on all of san mateo county.

Libraries generally have a better selection of movies I like, and it's more fun to go to a nice quiet library than the damn Blockbuster anyhow. I quit BB for good when I bought a prepaid card only to discover it didn't really work to my advantage. Too many tricks.


Posted by: bliffle at January 13, 2005 04:03 PM

Larry Brennan: Not surprised--I've heard Peninsula libraries are generally pretty good for video/DVD selection. I do think that's a fairly unusual situation, though.

WesB: that may be fine if all you watch are mainstream Hollywood movies. Netflix has a far better selection than Blockbuster, and to me that's worth a whole lot more than $3/month.

Posted by: Tom Hilton at January 13, 2005 04:33 PM

Here in Berkeley there are much better video stores than Blockbuster. I usually go to my neighborhood store, Video Maniac, but there is also reel.com and some others that rent a wide variety of good DVDs and VCR movies.

Posted by: Stephen Denney at January 13, 2005 04:44 PM

Netflix v. library

consider imputed cost of going to the library v. just coming home and video is there. All the minivans double-parked in front of Blockbuster will eventually figure this out and have the videos brought to them.

Posted by: cb at January 13, 2005 05:15 PM

I live about a mile away from LeVideo--one of the best video rental stores in the country--but use NetFlix for all but the most incredibly obscure stuff. The time saved by having NetFlix come to me, instead of the other way around, makes NetFlix hugely superior. Also, NetFlix all but eliminates Video Store Alzheimer's. (In the dim and distant past, when I was still tied down to a bricks-and-mortar video rental store, I resorted to keeping a list in my wallet. NetFlix' queue is a much better solution.)

Posted by: Tom Hilton at January 13, 2005 05:16 PM

Hmm, Blockbuster Online has all the movies I search for, maybe I am not obscure enough?

Posted by: WesB at January 13, 2005 11:30 PM

BlockBuster's latest pitch to its 'respected customers' is simply Orwellian NewSpeak, commercial sector variety. This crap has been going on for years. It used to be called snake oil, now it's modern marketing.

It's still simple commercial sophistry, and I'm really sick of it.

It's time to start prosecuting people for lying, misleading, shading the truth, and just plain bullshitting in commercial and political speech.

Or put them up against the wall...

Posted by: Jon Koppenhoefer at January 13, 2005 11:39 PM

I don't think I've EVER had a late fee on the one week rentals - it's always being a couple of days late on the 2 day rentals. If you can't get organized to watch and return a video in a whole week, you deserve to pay a fee, if for no other reason than you're denying it to someone else who wants to rent it. So quit yer whining, the "no more late fees" policy is a good deal!

Posted by: Lugo at January 15, 2005 08:34 PM

Well...there is always Gameznflix.
Annual plan is $222 for 14 months, and 8 Movies or Games out at a time. Works great for me.

Posted by: Darrin at January 19, 2005 03:32 PM

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