Now Playing: Late Fees at Blockbuster
By George Anderson
The experiment with no late fees is over for some Blockbuster franchisees. Stores in Arkansas, Alabama, Mississippi and Tennessee have reinstated late fees on movie rentals when the stores found out they were running higher rates of out-of-stocks on popular titles.
Tom Barzizza, vice president of Flicks Management Inc., which owns 30 Blockbuster franchises, told The Associated Press, “Our business is all about availability. If somebody keeps a new release that’s in high demand out for two weeks, that means it’s not there for someone else to rent.
“With the lack of any kind of late-fee structure, the movies weren’t coming back. Customers would come in and there wouldn’t be any movies for them to rent,” he said.
Some customers at Flicks Management stores contend they were not notified about the policy change.
Randy Hargrove, a spokesperson for Blockbuster Inc., said many other franchised stores and all the corporately owned locations will continue to keep the no late fees policy in place.
“What we have said is that the ‘no late fees’ program requires an initial loss of revenue because people are keeping the product out longer,” he said. “Some of our franchisees can’t afford this investment. It’s an expensive program.”
Flicks Management’s Barzizza said the stores run by his company are being flexible with customers when it comes to imposing late fees.
Moderator’s Comment: What impact, if any, does the decision by some franchisees to not participate in the ‘no late fee’ program have on Blockbuster as
a whole? Are late fees a competitive disadvantage in the current movie/game rental marketplace? –
George Anderson – Moderator