In a poor economy, Blockbuster resorts to defrauding customers
Filed under: Buyer Beware
It's a wonder that Blockbuster still exists. Between Netflix and free online movies, the store has become obsolete. I have one on my block that I haven't set foot inside of in years. I was fed up with their poor selection, $5 rental fees and outrageous late fees. Even now, whenever I walk by the store it is always empty.
Blockbuster, we know you've been hurting. But really, did you have to start defrauding customers? The video rental chain agreed yesterday to pay $300,000 in a lawsuit brought by the district attorneys of Los Angeles and San Diego counties. "The judgment is an important step toward pricing accuracy and fairness in the marketplace," said District Attorney Steve Cooley in a statement. "Consumers should be able to rely on the accuracy of the prices charged at the check stand."
It took a five-year investigation to fault Blockbuster with unfair business practices in both counties. Blockbuster was found guilty of charging customers higher than the advertised prices on scanned items. Blockbuster owes $237,750 in penalties, and $62,250 in costs, and is further prohibited from charging amounts greater than the advertised prices.
It's clear that Blockbuster has been hurt by customer's easy access to quality movies. But they've done little to update their model. Meanwhile they still pay billions in real estate while the money flows out of their stores. Last year alone, they lost $374 million on revenue of $5.3 billion.
Here are a few more reasons why Blockbuster doesn't have long to live.
Their selection is lackluster. While they claim to have over 90,000, Netflix has 100,000 titles. While that 10,000 may not seem like a whole lot in the scheme of things, it certainly makes a difference when you're looking for special interest films, a rare documentary, or a singular foreign flick. Plus, Netflix has 12,000 movies you can watch instantly.
Having been hit hard, Blockbuster completely copied Netflix's model, but poorly. They copy their renting models and price structures. Netflix even sued Blockbuster in 2006, for going too far in mimicking their patented queue which priorities which films customers want to watch first. But customers aren't buying it. In the first quarter, Blockbuster stock was down 28% to $0.82, meanwhile Netflix, with 10.3 million subscribers and growing, was up 4.8% to $38.86.
Around the same time Blockbuster announced they were doing away with late fees, a multi-million dollar business for them, in order to compete with Netflix. And then they silently reintroduced them. Called "restocking fees" Blockbuster gives you a seven day grace period for your film, and after a week they charge fees deducted from the cost of the film. After 30 days you have to pay the full price of the film.
It's unclear whether the defrauding practice was specific to blockbusters in Los Angeles and San Diego, or if chains nationwide were in the habit of marking up movie prices. Have you ever been overcharged by Blockbuster? Let us know below. In the meantime, don't forget to double-check your receipt.



Reader Comments (Page 1 of 11)
5-19-2009 @ 2:28PM
Sara said...
Blockbuster is terrible, I have returned movies to them for them to turn around and send me a bill for the price of the movie stating that I didn't return it. The first time it happened I second guessed myself and paid the fee. Six months later the same thing happened and I knew without a doubt I returned it. When I spoke with the teenager behind the counter he said they were having problems with the employees taking the movies and then charging the customer for it. I'm a proud netflixer now, I haven't set foot in that store since. And yes I still get a notice now and then stating I owe them 30 bucks...
Reply
5-19-2009 @ 4:58PM
Stacy said...
Both of our local Blockbuster stores closed recently. Shortly after that I had a message on my answering machine from "someone" who never left their name or location, but only said I had returned a movie too late & since it was after 30 days I owned it. They then said I could pay for the movie & pick it up at my convenience. I have no idea where I am supposed to pick up this movie from or even a phone number to call them back to ask. I think I understand now why they are closing..............
5-19-2009 @ 5:23PM
anthony said...
I hear you on that one they told me I owe them 48 dollars for movies I turned in befor the 7 days were up. I haven't been back since that was 6 months ago.
5-19-2009 @ 5:51PM
Holly said...
I have to say that also happened to me as well. They always called me saying they were charging me for movies that I already returned weeks before. After many times of calling and going in they "magically" found it, but they say it was "just" returned.
5-19-2009 @ 7:16PM
MAGGIE said...
I was 3 hours late returning my rentals. I was billed $19.00 late fee.
I was mad as hel* So mad I paid them In PENNIES,
Needless to say they have never gotten another "penny" from me since then. Nor will they.
5-20-2009 @ 2:43AM
Robert said...
Wow! I thought that only happen to me. Just reacently I returned movies and the very next week, they caimed that I didn't return them. I refused to pay for movies that I knew that I returned. So the manager excused the charges. Now when I return movies, I make sure they give me a recept. The guy didn't like it, but who cares.
5-19-2009 @ 2:18PM
non ya business said...
Blockbuster sucks as it is.... I hope this little stunt puts them out of business..... greedy pricks!
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5-19-2009 @ 11:42PM
Lisa said...
Blockbuster does suck! I was signed up with them for years. Then they started to change everything. In 18 months the monthly rate went from approx. $19/month to $40/month. By the way they don't tell you they are raising the rates. You find out on your statement. The clincher for me was when they changed the terms of the rental agreement, by not allowing trade ins at the store and then getting new rentals in the mail at the same time. They said you could get only one or the other which defeated getting them in the mail. I could just go to the store and pay a fourth of the monthly price. They deserve everything they get...We haven't rented from them since.
5-20-2009 @ 1:28AM
Penelope Wells said...
I totally agree. I needed to help my elderly neighbors rent a film they wanted to see. Nobody would rent to them unless they had a computer. I compared Netflix and Blockbuster. Both had a "free" trial period. I chose Blockbuster because I felt sorry for the "little guy" possibly bellying up financially. Well, I received the film, passed it to my neighbors, they saw it, and I returned it in the mail. To my shock, I received a charge on my credit card for $4.30! I called, but they refused to refund my money. So much for "free trial offer."
5-19-2009 @ 2:28PM
nic said...
When wil Comcast be looked into,for defrauding customers?
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5-19-2009 @ 3:09PM
heather said...
lol you are absolutely right.
5-19-2009 @ 3:53PM
formyson said...
Nic.... I hear ya. After yrs of bad service, billing rates that didn't make sense even after I called to get an explaination, poor customer care, the list goes on, I finally turned in my boxes and signed up with a satelite company.
After doing so, I got a call from Comcast asking me to come back, that they'd give me a 'great deal' that would last until I decided to end my service but I KNEW BETTER. After trying to say "No thanks", the lady on the other end of the phone DIDN'T hear me to well so I had no choice but to GO OFF. Oh, it felt GOOOODDD....LOL After that, I never got a phone call from them again. And now, I'm very happy with the service I get from my provider.
One yr when I had Comcast, my bill for 1 month landed out being just over $5. Why? Every time my cable went out, I called to get a credit. When I was told.... We're "updating" our system so I'm sorry, we can't credit you this time, I told them "I've heard this line to many times to count and so has many family members and friends so you better credit my account or else" Well, it was credited and that's what my bill was!!! Once I learned of that crediting, I spread the word out like wildfire. Every person I knew who had Comcast called every time their cable went out and they too benefitted.
While I'm sure Comcast wasn't to happy with people asking for "credits" or for cancelling their service, the one thing I'm sure they learned was.... WE, the consumers have the POWER. Either you take it or you end it.... Get smart people, end it because it seems that Comcast doesn't plan on changing any time soon!!!
Peace
5-19-2009 @ 4:25PM
Jen said...
I agree include time warner please too!
5-19-2009 @ 5:46PM
LORA said...
I agree with you Nic. When will Comcast be brought down for overcharging outrageous prices for basic cable no movies. Last time I paid for premium basic with a little taken off becuse I am a senior. I still paid $48 per month. Mind you this is NO MOVIES! I didnt need a box, my tv was cable ready.
Comcast better lower prices as they are way too high.
5-19-2009 @ 5:50PM
mark said...
I agree...Comcast should have the shadow of investigation cast upon them!
5-19-2009 @ 7:15PM
Rockosdyk said...
Ever notice only a douche will write "LOL?" It's a fact. Study them and you will see the merit.
5-19-2009 @ 7:36PM
Katie said...
You are so right Comcast is such a rip. They keep jacking up my bill every month so one sue comcast!
5-19-2009 @ 7:54PM
jessewooding said...
We have the power as consumers. Vote with your wallet! If it is too expensive, let them know by cutting the cable out. I love cable as much as the next guy, but with internet and the new digital receivers, I can do without cable. $50+ per month for basic garbage . . . who needs it?
5-19-2009 @ 8:05PM
Stephanie said...
Thank you for mentioning Comcast, I could write a book on how much I hate them. I cancelled my service when I had to move from my apartment at the last minute and they kept billing me. I told me I had cancelled it a month before the next bill came out and they turned me over to a collection agency who kept harassing me. After many phone calls to Comcast and after hearing them say they made a mistake, it still didn't stop until one person told me to send a letter saying from my landlord I had moved when I said I did. What does that have to do with anything?? I cancelled my service and it should have been cancelled regardless of whether or not I moved. I will never, ever sign up for their services again.
5-22-2009 @ 10:31PM
Joanna said...
Hear...hear Nic! It's a crime they way their services are set up and charged. Personally, I think the extended cable package (without the premium channels) should be set up/priced by the number of channels included & that you should be able to pick those you want. It really doesn't seem right that people have to pay for channels that they have no desire to watch, yet are not able to watch a non-premium channel that may not be in their package. Its like going to a restaurant, ordering a meal (say....a chicken dinner) and then paying for both that AND another steak dinner that you never ordered or received. A bit crazy huh!