New Jersey Says Blockbuster Is Lying About No Late Fees

from the false-advertising dept

Whoops. It appears not everyone is happy about Blockbuster’s claims of no more late fees. The New Jersey Attorney General seems to think that since there really are late fees (well, if you don’t return it by a certain date, they charge you for the whole movie), Blockbuster has violated anti-fraud laws. Blockbuster has responded by saying that they still don’t think they’re charging late fees and they’re surprised that no one from New Jersey contacted them first to clarify the details. It may come down to an argument over semantics. Technically, Blockbuster might be right. There are no “late fees.” However, there is an automatic fee to “buy the movie.” A late fee is more like a punishment fee, whereas Blockbuster can claim that in charging people for the movie, they’re getting something return. Whether or not a court agrees is a different story.

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Comments on “New Jersey Says Blockbuster Is Lying About No Late Fees”

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Akira says:

Blockbuster is OK!

This is ridiculous. Blockbuster is NOT charging any late fees, therefore they are not involved in any sort of fraud. If consumers were allowed to keep movies without any sort of cost to them whatsoever, what would prevent them from keeping movies indefinitly, and therefore causing Blockbuster to lose tons of money.

What I think people don’t realize, is that the charge they enact to “buy” the movie, is the cost of the item (movie/game) at full retail value, MINUS the rental charge. So in effect, consumers are not able to try out a movie, and buy it if they like it without having paid more than the retail value.

I myself have done this already 3 or 4 times. But then again, when I heard about the lack of late fees, I made sure I asked about all possibilities involved in the deal to make sure that I wasn’t getting screwed. But then again, I guess a smart consumer is hard to come by nowadays, and people are just getting lazy and complacent.

Anonymous Coward says:

Re: Blockbuster is OK!

?If consumers were allowed to keep movies without any sort of cost to them whatsoever, what would prevent them from keeping movies indefinitely, and therefore causing Blockbuster to lose tons of money.?

1) That is Blockbusters problem. They made the deal? their profits are their problem, not mine.

2) Saying that there are no late fees, and than charging what amounts to a HUGE late fee, is, without question, misleading. They need to realize that being less than completely transparent with their customers is just going to drive more of them to Net flicks? and that, long term, is not going to benefit them too much? Besides, who has ever heard of paying retail price for a used item? And you call yourself a smart consumer?

3) Net flicks seems to have no problem with the ?keep it for a s long as you want? with no late fees issue. In fact, Net flicks has so little trouble with it that Blockbuster is doing everything it can to launch a lame ?me too? offering.

4) Blockbuster IS ok, but Netflicks rules.

Anonymous Coward says:

Re: Re: Blockbuster is OK!

Netflix puts a limit on how many you can rent and charges you monthly regardless of how long you keep the movie. If you keep the same 3 movies for a year how much will you have paid netflix? If you keep the same 3 movies for a year from blockbuster how much will they have from you?

Netflix is only cost effective if you are swapping out movies as fast as you get them. Blockbuster’s new late fee policy has me renting from them rather than hollywood video or any local chain.

And yes I was smart enough to read the fine print before I signed!

Anonymous Coward says:

Re: Re: Re: Blockbuster is OK!

?Netflix puts a limit on how many you can rent and charges you monthly regardless of how long you keep the movie. If you keep the same 3 movies for a year how much will you have paid netflix? If you keep the same 3 movies for a year from blockbuster how much will they have from you??

Blockbuster would have about $90.00 from me if I only purchased those 3 used movies from them at retail price. And you will pay the FULL retail price? you should not expect to get the ?Amazon Retail Price,? and certainly not the ?ebay used price?

On the other hand, at $4.00 a rental at Blockbuster, how much are you going to have paid for the 250 or so rentals I can get from NetFlicks in that same year?

Obviously if you are only going to rent 3 movies a year, Blockbuster is your solution, but if you are going to rent some movies? more than about one a week, Netflicks cleans up. Of course, if you are only going to buy 3 used movies a year, you can?t beat Ebay with a stick.

Of course the killer application, the advantage Netflicks has over Blockbuster that Blockbuster can never equal is selection. 35,000 titles to what? Less than 1500? How many times have you asked the pimply faced kid at Blockbuster to help find a movie you have heard / read about, only to be told that they don?t have it?

To say nothing about availability. How often is the movie you want to see out of stock in the video store? I have over 100 titles in my Netflicks queue, and they are all available right now? Of course? I couldn?t even rent a third of the movies from my queue in a Blockbuster – they simply don?t carry them.

The reason why Netflicks doesn?t have the late fee issue that Blockbuster has is simple? Netflicks encourages you to return your movies, to get more for free? to take full advantage. Blockbuster encourages you to keep your movies longer, in order to take full advantage? There is no benefit for you in returning your Blockbuster movies? in fact you have to get off the couch and drive down there? it costs you something? But there is a total benefit in returning your Netflicks sooner? you get more free movies. Which business model do YOU think is going to be more customer friendly?

Yah? they only let you have 3 movies out at a time? and that is fine? that is 1 at home, 1 on it?s way to me, and 1 on it?s way back? no sweat. Honestly, since I started using netflicks, I have been watching WAY more movies, WAY less TV? and couldn?t be happier about it? AND I am still spending less than I did at Blockbuster? Blockbuster is going to have to do a LOT to get me back into one of their stores again.

dan (user link) says:

Re: Re: Re:2 Blockbuster is OK!


Why not grow some brains and realize that both
of the companies have their advantages and dis-

Blockbuster is nice because it is a retail outlet.
Netflix is nice because you can order movies in
your stained boxer shorts at 3 AM and get them a
few days later.

Financially, they both make sense. Blockbuster
is effectivly offering “trials” for movies. You
can rent them for a few bucks, if you like it,
keep it. They charge you for the full price of
the movie but take the four bucks or whatever off.

Netflix will let you keep it forever too, but will
charge you $20/mo until all your movies are returned
and your account closed.

They both make sense. Why not find something worth
arguing about before running your mouths? I hear that
people are dying in Iraq, how’s that?

Anonymous Coward says:

Re: Re: Blockbuster is OK!

I disagree with statement #4. Let me say netflix “USED TO” rule, but they are lame now. I have heard this from many people. My movies from netflix started to take longer and longer to arrive. I was getting more and more ‘short wait, long wait’ movies from netflix lately, yes usually new releases, but never had the problem before. When I asked them about this why the sudden inundation of waiting for movies, all Customer Service did was paste a faq entry explaining what short wait meant. I already knew this, i replied again explainign what i wanted to know, and that they hadnt’ read my first email, the same faq was copied. They just have gone downhill recently.

nonuser says:

I might get flamed for this, but...

maybe the original Circuit City Divx idea had some merit after all. Disposable discs sold at retail stores, with built in DRM to prevent copying and to self destruct after a certain number of viewings. The hitch is that it requires specially equipped players, which means the manufacturers have to be on board.

Of course, the hacker community would probably come up with a device that produced a clean copy. But one could easily make illegal copies of a standard DVD, so that’s not a big deal.

Anonymous Coward says:

Re: LackLuster loses 19% of profits

Blockbuster is aa dead business model so who cares ?
Do any of you really think places like Blockbuster & Hollywood video are going to make it in the next few years ?

Already I can rent movies @ my local Hollywood Video for 5 days for 99 cents a piece.

Netflix offers home delievery & there is a whole bunch of ” mee too ” companies offering the same thing.

Places like ” Lackluster ” will soon seem as archaic as going to the post office to pick up your mail.

I for one will enjoy the demise of ” LackLuster ” & their shitty business model.
Prior to dropping the ” late fee ” Blockbuster accquired 19% of their profits from late fees alone !

If they are giving up 1/5 of their profit margin you KNOW they are hurtin’ … and hurtin’ bad !

BTW, I’ve now signed up three different times to Blockbusters home service under different names & credit cards ( although I still have the movies sent to the same address ) and have now enjoyed about 45 movies @ Blockbuster’s expense … I figure it helps to equal out all those bogus late fees I was charged in the past.

Sign up for two weeks … get movies … cancel.
Lather, rinse, repeat.

netflix slows your delivery to up their profits says:

Re: Re: No Subject Given

netflix slows your delivery to up their profits. Once they determine you are a heavy user they slow your turnaround time so now instead of two days, it is two day plus one processing day, and then some more delays until it is almost a week turnaround time.
blockbuster now has a 14.99 2 out at a time model that allows you to swap out as often as you like, without the mail delay. So you can watch 8 a day every day if you want. And with the ubiquity of stores, it is just a couple minute drive to swap.
I used to be a big fan of netflix, with the 5 out program until they started purposely delaying the shipments and mysteriously losing about one a month and nicely saying I can pay for the one “i didnt return”. Nice subtle way to call the customer a liar and a thief and charge them full price for a loss in the mail. I await the netflix crash and burn with glee.

netflix slows your delivery to up their profits says:

Re: Re: Re:2 No Subject Given

if you follow the netflix stock discussion groups, it is a common practice nationwide. And why wouldnt netflix do this to increase their revenue? It is not like they respect their customers. Just read some of the trade mag interviews with the CEO of netflix and you will see what he is about.

Add to that the long wait for popular and hard to find titles, and there does not seem to be a compelling reason to wait for the mail to deliver something you can get from a 10 minute round trip drive to the vid store.

netflix slows your delivery to up their profits says:

Re: Re: Re:4 No Subject Given

Do you really need proof that it is intentional? They make more money when they delay shipment, they are interested in more money and they dont care whether their customers get pissed and quit because they can easily be replaced.

Netflix make their money on the people that hardly use it. If you use it a lot, the profit gets eaten by shipping, handling, processing, so it is in their best interest to scare away heavy users and just go for the low hanging fruit of people that sign up and forget about it, or are too busy to use it.

When there are a lot of complaints from the heavy users after a long time of happy service as light users, it is pretty obvious to most.

Most investor dweebs would claim that netflix has a fiduciary responsibility to their shareholders to screw over the heavy users.

Anonymous Coward says:

Re: Re: Re:5 No Subject Given

?Most investor dweebs would claim that netflix has a fiduciary responsibility to their shareholders to screw over the heavy users.?

That may be, but Net Flicks (or any service provider) has an ethical, to say nothing of legal responsibility to provide the service they charge for. If Net Flicks wants to cancel the accounts of ?heavy users? and refuse them service all together, that is one thing, but if, instead, they simply, covertly, offer a lower level of service to ?heavy users? than they do to ?regular? users whilst charging the same rate – they are on shaky ground.

Many investor dweebs would claim that net flicks has a fiduciary responsibility to their shareholders to not get sued by their customers.

Besides, there are only a finite number of customers that they are fighting for? Many investor dweebs would claim that net flicks has a fiduciary responsibility to their shareholders to not piss off, and thus drive to other service providers, their customers.

The Hawk says:

There is a late fee

Yes, BlockBuster does charge you for the movie if you don’t return it by a certain date and if you return it within 30 days of the charge, they credit you back for the charge. However, what doesn’t come to the forefront is that they then charge you a service charge or whatever they call it of somewhere around $1.50. As such, isn’t this technically a late fee?

One could argue that the policy really is that there is no late fee for the first 8 days after the due date and then a flat late fee of $1.50 (or so) for up to 30 days after the due date after which you buy the movie (without the original box, literature, etc).

Eric Jul says:

Late fees Blockbuster

It’s a late fee because they charge money for exceeding the rental deadline. Period.

The counter argument of them SELLING you the DVD if it is returned late:
This is equivalent to calling it a SALE, so a RENTAL turns into an irrevocable SALE for the customer.
But that means that the customer actually commits to this sale AT THE TIME OF THE RENTAL.
This makes the RENTAL into a tentative sale – NOT A RENTAL.
So, if this scheme is called a RENTAL, well then the EXTRA MONEY that must be paid after the return deadline is a late fee.

Summary: IF you call it a RENTAL – then extra PAYMENT that follows is a LATE FEE – even if you get to keep the DVD.

Big Dong says:

Re: Late fees Blockbuster

I’ll play the game and use Netflix until they get slow. Then I’ll quit them, and rejoin under a new account. If they can screw with customers, then customers can play the same game. Try it if you deliveries get slow. Take them for as much as they take you for. Anyway, my service has not got slow, so I’m happy with Netflix (for now). Netflix, watch out if you piss me off! I’ll use you like a wet rag!

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