BLOCKBUSTER TO END LATE FEES
It's a blockbuster announcement from Dallas-based Blockbuster, the nation's largest video and game rental business: no more late fees.
Late fees are a thing of the past," said Blockbuster Chairman and CEO John Antioco in a statement released this morning, calling this the "biggest and most important customer benefit we've ever offered."
The policy change will go into effect on Jan. 1.
There's still a one-week deadline for returning rented games; the due date remains two days to one week for rented movies. But Blockbuster will now give users a one-week grace period with no additional fees.
After that, however, the rental will end and the product will be considered "sold" to the customer.
The company said its decision to change its rental policy was based on testing in markets across the U.S.
Blockbuster has been facing increased competition from rental store alternatives, including rent-by-mail offerings by Netflix and Wal-Mart, pay-per-view options from cable and satellite providers and even downloadable video from Movielink.
Blockbuster said it anticipates that lower revenues from the elimination of late fees will be offset by a higher volume of rentals.
The company's stock closed at $8.80 in trading on Monday.
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