Blockbuster Sued for “No Late Fee” Fibs
Blockbuster found itself in a position to make a major change in the video rental market, and proved that execution is everything in business. In announcing the end of late fees for videos, the company could have made a change as big as the end of membership fees that were charged in the 1980s. Instead, it finds itself on the wrong end of a lawsuit in New Jersey for deceiving the public about its policy.
To keep the record straight, this is what Blockbuster has on its website regarding the new policy:
Q: What if I forget to bring back a movie or game? Won't you charge me something at some point?
A: If you still have a movie or game seven (7) days after the due date shown on your receipt, we will convert your rental to a sale. The movie or game will be sold to you at the selling price in effect at the time of rental, which is either the retail price, or, when available, at the previously-rented selling price, less the initial rental fee you paid
Q: What if I return an in-store movie or game rental seven days or more past the due date?
A: We will gladly let you return the movie or game within 30 days of the sale. If the selling price has been charged to your credit card, we will credit the amount charged to your credit card when you instruct us to do so in person (otherwise we will place this amount on your BLOCKBUSTER membership account). If this amount has been charged to your membership account, we will remove the balance. However, in both instances you will be charged a restocking fee plus applicable taxes
Blockbuster maintains this does not constitute a late fee. New Jersey State Attorney General Peter Harvey disagrees, and for those who speak plain English, his case is virtually air-tight. No late fees, means no money will be charged if the video or game comes back late. A seven-day grace period followed by an automatic billing for purchase is a fee charged because the thing didn’t come back on time. And a restocking fee up to 30-days later is a late fee by another name. Blockbuster should have been more transparent to say the least.
Yet, the company did identify the biggest pain its customers have in patronizing the video chain. It came up with a popular-sounding solution. It just didn’t turn out to be a solution at all. With competition from Netflicks, Blockbuster has branched out into rentals by mail, and its toying with a takeover of Hollywood Video is a rational solution to the problems both chains have. But customer goodwill took a beating because it looks like the company plain lied. And the hardest thing in business is winning back a former customer. Blockbuster is going to need more than a good legal team; it’s going to need luck.
© Copyright 2005 by
The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without
written consent.
Home
|
|
|
