What if video stores vanished.

[Lord_Stewie]

one take on the Late Fees issue:And this shows how late fees is a bad business idea:

BLOCKBUSTER CEO RESPONDS TO THE NO LATE FEES PROGRAM



CEO James Keyes believes that starting that policy which eliminated movie rental late fees, which was implemented about three years ago, is one of the root causes of Blockbuster dropping in sales year after year since 2004. Yes, this means that sales have dropped since implementing that policy. On Blockbuster’s point-of-view, they loved late fees because they accounted for almost one-fifth of all revenue. Of course, in the customer’s point-of-view, late fees stink. Big time. So Blockbuster dropped them, in order to appease customers. But, what has it do for Blockbuster? After all, in business, the goal is to be profitable, not just make some people happy that used to be upset before. It’s a nice bonus, but rule number one in business is to always turn a profit.

The problem that the elimination of late fees has caused is that now Blockbuster customers, knowing they won’t have to pay the late fee if they bring the movie in late, return the movie very late. This means major problems for the new releases section of Blockbuster stores, since the store shelves are often stripped of new movie releases.

One idea I have for the new CEO is why not combine the no late fee policy with an early return bonus? For example, a standard movie rental at Blockbuster costs $4.49 (plus tax). If a customer brings back the movie the same day before closing, why not refund the customer $3? Everyone’s happy: the customer got a movie rental for $1.49 and Blockbuster still rented a movie but now has that movie available for other customers the next day. It’s a good compromise: James Keyes if you’re listening, take note!

will continue to find a better article than this but its something.