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Blockbuster Settles No Late Fee Suit
fistfullast33l writes "In a followup to a previous Slashdot story, Blockbuster has settled a lawsuit with 47 states and the District of Columbia over its No Late Fees advertising campaign. The New York State Attorney General's Office released the following: 'The Attorneys General alleged that the advertising campaign launched in late December 2004 was misleading because it failed to clearly disclose that, seven days after a movie or game's return due date, the consumer would be charged its selling price if the item were not yet returned. The Attorneys General also alleged there was insufficient disclosure that not all Blockbuster franchise stores were participating, leaving customers of those stores wrongly believing that they, too, would not have to pay late fees.' Blockbuster will be refunding customers as part of the deal." Additional commenary available on MSNBC.
Guess that's some serious late fees for Blockbuster!
Physicist, consultant, science communicator
And this is important to Slashdot readers who probably download their entertainment because...
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
I keep looking in my mailbox, but there are no Blockbuster DVDs there. The ad shows random people pulling DVDs out of their mailboxes; this is clearly a case of false advertising!
I Am My Own Worst Enemy
Wow. Am I the only one that said "there's got to be a catch to this" when this thing started and went to their website to check it out. I knew that they would charge you for the movie because I looked it up. Did you think they were just going to let you keep the movie?
Coder's Stone: The programming language quick ref for iPad
Truth makes lousy advertising slogans, dunnit?
You can't talk about Wikipedia's flaws on Wikipedia
I used to work at GameCrazy (a part of the Hollywood Video chain,) and we had a lot of customers who would come in, and basically say, why should we be renting from you anymore? Blockbuster has no late fees. When we informed them that if they didn't return the movie within a week of the due date they would be charged the full price for the item, not a single customer told us they were made aware of that fact.
I went to Blockbuster myself a couple months ago and the man who checked me out, the manager, said to me "And don't forget, we no longer have any late fees!" Certainly a misleading comment.
... what 3 states were not involved, and why?
loganavatar.com
That is what the ads strongly implied.
Don't blame Durga. I voted for Centauri.
And the problem is that when people get hit by this fee, they don't do anything about it - they just roll over and pay. So good to see some action being taken!
Physicist, consultant, science communicator
The idea is that when you return it, you get a refund, but you still have to pay a "restocking fee"
Scenario: Consumer "Bob" rents movie "Incredibles" from Blockbuster.
2 weeks later, 1 week after due date. Blockbuster charges "Bob's" account $17.95 for "Incredibles"
1 week after that: "Bob" brings movie back. Blockbuster credits "Bob's" account for 17.95 minus a "restocking" fee for putting the movie back on the shelf.
Not "late fees" per se, but still extra clams to shell out.
I have this really funny quote that I like to put here. Unfortunately, there's this really annoying thing called a char
Anyone care to evaluate the slogan in the topic?
Don't blame Durga. I voted for Centauri.
Anybody actually been in a Blockbuster since they instituted the No Late Fees? The only thing this promotion did was make it so there are no movies in stock.
I went to a blockbuster a couple days ago, and they have a big sign on their door that explains the details.
Yes, they will charge you full price for the item after 7 days. However, if you bring the movie back after 7 days you will not be charged full price. You will be charged a "restocking fee" instead of a "late fee". Granted, it wasn't that bad at $1.50, but I still laughed after reading about the "restocking fee."
Perhaps my cynicism has got the best of me, but I have a question to ask the crowd. How unlikely is it that Blockbuster is going to suffer in the court of public opinion as a result of this fiasco?
...from the truth-in-advertising dept...
It is rather hard to find news reports of organizations that have crumbled due to such odious behavior.
Hear, hear!!
Their slogan was honest. I remember the commercials:
"The end of late fees. The beginning of more."
I jokingly said to myself that they meant the beginning of more fees, but I guess they weren't joking and instead were being honest.
This sickens me. How could we let the government do this?
Clearly, this should have been left to the people. (By people I mean a huge class action suit where lawyers get millions and each customer would get a free rental or some other nominal compensation. That is how the system is supposed to work.)
Stupid government. THEY TOOK OUR JOBS!!!
The worst part is the stores that don't participate. I wanted to test out the no late fee policy, I returned 3 movies 3 days late. What do you know, I get a late fee notice in the mail. I go in all cocky... "but you don't have late fees anymore!" Ah, but they don't participate in that.
I'm so glad this happened, I was about to switch my Netflix account over to Blockbuster even though I knew deep down they were still evil. Same on me, fooled my twice.
What surprises me the most is that the program is optional to franchises. I think autonomy of franchises in promotions is probably one of the worst moves a business can make. If McDonalds advertises the Big Macs for 10 cents but the local McD's isn't doing that sale, I'm less likely to go to any McD's anywhere because if a company can't maintain consistincy is their sales and promotions, how can I assume there will be consistency in quality? How can I assume walking into a particular branch of of a store will be worth my time and money.
Free MacMini
I've been driving by these Blockbusters for a while now. They all have giant round signs that say "No late fees!". There is no fine print on the signs.
Don't blame Durga. I voted for Centauri.
Here in Canada, all members of BlockBuster recieved a brochure outlining the terms of this, and it really isn't all that surprising. Does anyone really expect a video store to allow you to keep a video for as long as you want?
I tried the monthly takeout subscription with Albertsons about a year ago. After one month, they had no more movies that interested me. Blockbuster has a much larger video library, but not all locations are created equal. There is a blockbuster in the Albertson's complex near my home and it is one of the "less equal" locations. Their library is not much better than that of Albertsons.
I'd choose netflix if I didn't have Dish Network now. Oh, and if that weren't enough, I play WoW. I haven't rented a movie since December 20th.
The fine print you speak of was when they originally signed the membership contract. Those terms changed with this promotion. The reason Blockbuster got into trouble because they told the people on the sales floor not to tell the customers about the "you just bought the movie" part of the new terms.
This is precisely what the Netflix model is. They send you a movie, you keep it as long as you want. Along with the 2 movies we received recently I've got a DVD next to the TV we've been meaning to watch for 3 months. Netflix doesn't care. You send it back when you're done, you get another DVD. The only thing sending the movie back does is refresh the choices you have next to your TV.
Buried underneath those somewhere are a couple of DVDs we had when we closed one of our Netflix accounts to change the name it was under. That was over a year ago. Netflix doesn't care.
Blockbuster introduced "no late fees" as a direct answer to the Netflix model.. at least, that's what people apparently thought. They only wanted to create the impression that they were like Netflix, obviously, without actually doing any of the work.
It's rare that you're presented with a knob whose only two positions are Make History and Flee Your Glorious Destiny.
Blockbuster: No late fees.
McDonalds: Our fried lard-balls are fat free!
NBC: Must-see TV
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Napster 14 day trial: Download a million songs for FREE
Nigeria: Give us $14,000 and we'll give you millions.
Slashdot: Our moderation system is fair and balanced.
Fox: Our news is fair and balanced.
On the other side, you have one of the most true ad campaigns in history, for the Eagle car company: "Eagle: Not intended for the general public". The general public wholeheartedly agreed.
Don't blame Durga. I voted for Centauri.
Up to 20% of stores are franchises and many revolted against the "No More Late Fees" program, causing customers to be totally confused. "No More Late Fees" commercials running on all channels and yet my local Blockbuster still charges late fees?
I've been covering this story and more at: http://www.hackingnetflix.com/
- MikeK @ HackingNetflix.com
Yeah, it's like the DSL or Cable advertising that says "up to 15 bazillion gizomegobytes per second" with the ultra fine print written in molecular-sized inked that says "Under laboratory conditions with cables no longer than 5cm in length and with fifty seven inches of lead shielding and a witchdoctor chanting 'Telco-welco-cable-wable, make this tiny connection ultra-stable!'. Individual user results may vary, and it probably won't work at all in the state of New Jersey."
The world's burning. Moped Jesus spotted on I50. Details at 11.
In defense to Blockbuster...but not to troll, the restocking fee is a set fee. It is not dependent on how late the movie is and so if you keep it for months on end and then choose to return it, you will only be out the fixed $1.25 (that's the fee in AZ). That would hardly be considered a "late fee".
If you look at it that way, you could consider renting the movie for $4, allow them to charge you the additional $17 (sale price is based on the DVD's "used" value), and then own it.....one day you can choose to "sell" it back to Blockbuster, and it will have only costed you $1.25. Not a bad ROI in my book. Try getting that much on eBay!
"If you don't like the system...make it work for you."
Looks like we agree that the ads are rather deceptive. I hate frivolous lawsuits as much as the next guy, but it is not frivolous to sue over late-free harassment when you respond to a "no late fees" ad. What part of "no" do you not understand?
Don't blame Durga. I voted for Centauri.
Overall I think that the system is fair. In fact, it is something that I was saying should happen for a long time. I would get really pissed when I returned a movie two days late and the late fees combined with the original rental fee were enough to purchase the movie. My issue with this is if they clearly mark what they will charge you for the movie. Blockbuster regularly sells previously viewed movies at or below 10 dollars. I would hate to be charged the retail price of 20 dollars for a movie that they are selling in the store for 10 dollars.
It's the same thing as advertising made to look like invoices. At the bottom there's fine print saying this is only a sales offer, but plenty of incautious people have been very silly and sent off money. Yes, it's true that in either case the consumer ought to be more cautious, but the fact is that people are often too busy to sit there and read the paragraphs of fine print that comes along with these various offers and promotions. With consumer laws, the government is doing its part by allowing recourse for those who have been taken advantage of by dishonest marketing ploys. Blockbuster should not only be forced to refund money, but also to, at its own expense, run a 30 second spot on TV explaining that what it did was dishonest and unethical, and run it for as long as the original scam advertising campaign was on.
The world's burning. Moped Jesus spotted on I50. Details at 11.
The US says that pennies are acceptible forms of payment. I went to a block buster and a big sign said "5 day rentals". Turns out they really meant 4 1/2 so I had to pay a late fee. They have a history of deception, so they deserve to pay. Why print a big sign or a big ad, when reality is slightly different. So I paid in pennies and counted very slowly and very loudly and never went back. When interrupted, I started the count over. End of relationship with these slimeballs.
I used to wonder what was so holy about a silent night, now I have a child.
Look closer. Lots of those are not taxes on *you*, but taxes on parts of the Cell business that aren't directly related to the consumer.
If you read the fine print, you'll notice that many of the charges have names like "Tax on gasoline for cell-tower maintenance workers transportation fee". Ok, so most aren't quite that bad, but some are close.
They try to make it sound like the Gov is taxing you directly, but the cell companies are really just itemizing the costs that they incur paying *their own fucking taxes* on your bill, then not including those itemized parts in the quoted "price" of the service. Given how high these fees can get, and that they're mostly *not* taxes (directly) on consumers, this is very misleading.
It would be like a Brick and Mortar book store telling someone that a book costs $5, but then tacking on not only sales tax, but a $2 fee for the property tax on the store itself. Actual cost at register: $7 + sales tax.
So, in fact, this is even *worse* than what you described.
No = None, Zero, Zilch
Late = After the due date, Not on schedule
Fees = Monetary charges, money, currency
They were charging late fees. It's not idiot consumers, it's idiot marketers who thought they could bend the consumers over.
It is merely a delayed mandatory financial assessment. How dare you assume it to be anything like a "late fee" !!!
Don't blame Durga. I voted for Centauri.
"No late fees" means no fees, period. No matter how long you keep the rental. Right? Even if I decide to keep the rental for 4 years! Right?!?
...for the rest of your life!
Next up: a class action suit against restaurants that advertise "All you can eat buffet for $X.XX". Nothing on the sign indicates that you aren't purchasing all the food you can eat
Seriously, you have to be incredibly naive or stupid to not know that there are sure to be conditions to the offer. Anyone with any common sense would naturally inquire about the stipulations.
I had been saying from the beginning that the American public would be too stupid for a system like this, and it looks like I was right. Hey I know, I'll rent a movie under the new no late fee program and return it 3 years later with no extra charge, wow what a store, those Blockbuster folks are so nice!
If I said "Brand New Dodge Vipers for $15" it might be obvious to you that this sale is impossible and there is a catch, but I still made that promise, I can't just show up at a buyer's house a week later and say "all right, here are $50 000 of mandatory fees you must now pay". Even if the $50 000 surcharge was in the contract, false advertising laws are going to get me to protect consumers.
Meanwhile, "All you can eat buffets" have
- Been firmly established, everyone knows what it means
- Have an actual purpose by giving the consumer a new method of purchase
Since "No Late Fees" has no real purpose above confusing people into going to BlockBuster, they should be nailed on it. "Reduced Late Fees" would have saved them a world of hurt. I'm sure any competent analyst would've have seen this coming."When the atomic bomb goes off there's devastation...but when the atomic bong goes off there's celebraaaaation!"
You have to admire the chutzpah of their PR guys. From today's press release:
I doubt they're too worried about the $630,000 settlement. This is a company that took in almost $6 Billion in the last twelve months. As an AP story puts it:
So even after putting out nearly a million bucks to pay off the states and put up new signs, they will still make money. Just consider it a cost of doing business.
Soylent Green is peoplicious!
BB used to charge the full rental price even if the rental was a few hours late. This pissed a lot of people off of they had to pay another $4.38 for being 3 hours late.
/ 05/01/638 70251.shtml
My franchise (Southern Stores, INC) came out with a per/day late fee. For a 5 day rental - they are all 5 days now at my store - then it is $.90/day late fee charged to the account. This is the entire late fee divided up into 5 days. People complain a LOT less about a $.90 late fee than a $4.50 late fee. We also changed our due date to midnight instead of noon on the second day.
We started this program and tested it beginning in January 2004 with a few stores and eventually all of our stores adopted it (the franchise covers Tennessee). Our customers were much more happy than previously.
Then BB Corporate, all of the national stores, came out with this "no-late fees program" and began to advertise it via national advertising outlets. Well, people in Tennessee watch network and satellite programming and thus saw these advertisements. You want to see confusion in the market place?
Our franchise decided to NOT participate in the corporate program because we think our customers like the current program not to mention it is much simpler. Almost every day people will walk into my store and when I tell them they have late fees they immediately start to mention that BB has no more late fees. Then I have to be the bad guy and sit there and explain to them that we are a franchise store and don't participate in that corporate program; yeah - it really tends to upset some of the customers. If they still complain then I hand them a memo from our franchise office which explains all of this in writing and even offer to give them the number. I remember a few months ago I saw a posting on the Net that mentioned an exec from the franchise slamming the corporate policy in the memo we hand out and that his remarks could potentially be used in court against the national corporation. I cannot find that article now however. I've been told that only 5% of all BB stores are not participating.
Also something worth noting is that we seem to be getting less and less copies of titles in on their respective release dates. For example if we would normally get 50 copies of this week's new relases last year, we might only be getting 30 or so. From what I can tell it is deliberate and accomplishes several things:
1) Less inventory to purchase
2) More likely to be 100% out of stock for a longer period of time
3) Keeps the customer coming back to the store more often because their chances of getting a new title the first week are slimmer and slimmer
4) Creates more space in the store for sell-thru items
5) We are told to suggest to customers that they purchase the movie from our shelves instead of rent it.
Compare our prices to Wal-Marts!!! WOW we are sometimes as much as $10 higher than Wal-Mart! I think that their model is to have less and less to rent and then try and get the customer to keep coming back so that they spend more often, or that they actually purchase it where there is a greater profit margin (or at least it gets the customer in the mindset of purchaseing, not just renting, from Blockbuster)
Here is an article from our local paper in Nashville which mentiones these issues:
http://www.tennessean.com/local/archives
I apologize for the poor grammer, spelling, and incoherence but I've spent the better part of 40 something in the studio working on a project for school.
The opinions and thoughts of this posting are in no way official commentary of Blockbuster or Southern Stores, INC no do they reflect or represent either entities. Any official comments or news releases will come from proper and official channels. (besides, I graduate from college in a month and will be quitting then)
Libertas in infinitum
- They advertised "No late fees", but did not sufficiently disclose their "restocking fees".
- They advertised on national TV this "no late fees" scheme, yet not all Blockbuster franchise stores participated, leading to customer confusion.
- Some Blockbuster franchises, who were not participating in the "no late fees" scheme, still used the "no late fees" marketing materials (banners, etc) despite not participating in the "no late fees" program!
Now, I know that you are really smart and all, but wouldn't you, upon entering a blockbuster store displaying the "no late fees" banner, have reasonable cause to believe that that store was participating in the "no late fees" program? Well, some stores that weren't participating still proudly displayed the "no late fees" banner. Don't you think that's just a bit deceptive and confusing?The problem isn't just that the American poublic was having trouble grasping the new program. The problem was the Blockbuster really was being deceptive.
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