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Saturday, January 08, 2005
No Late Fees..well, unless you live in Tennessee that is.
If you've turned on your TV in the past week, you've probably seen the latest ad campaign for BlockBuster Video that triumphantly proclaims there are no more late fees.

That is, of course, unless you live in Tennessee.

Apparently the BlockBusters in Tenenssee have decided to not go along with this new program and are still charging lates fees. There's an article about this in this morning's Tenenssean.

The ''no late fee'' policy applies at Blockbuster's more than 4,500 company-owned stores nationwide and at about half of its 1,100 franchised locations, stores operated by local merchants. But Nashville's 31 area stores are owned by a franchisee that has opted to continue charging late fees, a move that's allowed under franchising deals with Blockbuster.

But Blockbuster's corporate brain trust is loudly touting its no-late-fee policy in a national ad campaign, and the commercials can't be taken off the air here.

The no-late-fee policy is in force in about 95% of the nation, just not in Nashville, Memphis and a few other holdout markets.

The article goes onto to say...

Barzizza said Southern Stores had no plans to change its late fee policy in Nashville. The rules that local stores have been using are fair, he said.

Last spring, the local franchisee rolled out a ''Day Late, Day Rate'' system that prorates late fees by the number of days a customer is tardy. For example, if a customer rents a video for $3.89 and returns it a day late, he's charged only 78 cents for the extra day. Nationally, Blockbuster had been charging a $3.89 late fee in that scenario.

''People understand (the) system,'' said Barzizza, who said Southern Stores copied rules used by other rental businesses. ''If they go rent a car, or check out a library book, they know they'll be charged extra per day. There's complete control of how much money they're spending and how.''

From what I understand of the new system that 95% of the country is now using, you rent a movie and you just return in whenever...you keep it a week after the due date and they charge you the full price of the movie to your account. If you bring it back, then the charge is taken off and you pay a "restocking fee" (gee, that doesn't sound like conviently re-named "late fee" does it?). My question on the new policy is--what's the incentive to return the movies in a timely fashion. I think we can assume there's a small portion of people out there who will watch the movie and return in a timely fashion. But there will be some who not return it and keep it as long as possible because now there's no incentive to return it promptly. I begin to wonder if the local BlockBuster shelves are going to become like a ghost town with lots of empty slots where people haven't returned their movies because there are no more late fees.

That is unless you live in Tennessee. Then you've got late fees piling up...


posted by Michael Hickerson at 1/08/2005 02:08:00 PM | |
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