In another example of a company attempting to compete with a competitors superior business model, Blockbuster has been caught with its pants down regarding its new “No More Late Fees” ad campaign. Unbeknownst to most, the video rental company’s largest campaign to date amounts to a lie. New Jersey Attorney General Peter Harvey filed a lawsuit last Friday claiming Blockbuster did not disclose the reality of its new program.
While it’s all in the fine print, Blockbuster’s program does not do away with late fees. It simply recategorizes them into a “sale” on the eighth day. If, after 30 days, the video is returned, the charge is credited but then the company imposes the well known, “we’ll do anything for a buck” trick and charges a restocking fee. Even if all is disclosed, this has to be one of the sleeziest marketing stunts in recent memory. “Blockbuster boldly announced its ‘No More Late Fees’ policy, but has not told customers about the big fees they are charged if they keep videos or games for more than a week after they are due,” Harvey said. “Blockbuster’s ads are fraudulent and deceptive. They lead people to believe that an overdue rental will cost them absolutely nothing when, in fact, customers are being ambushed with (a) late fees in some stores, (b) so-called ‘restock fees,’ and (c) credit card or membership account charges equal to the purchase price of the video.”
Blockbuster, of course, in a desperate attempt to cover its ass, issued a statement claiming they were very thorough in explaining to customers how the program works. Even if Blockbuster bought all the time on the Super Bowl to announce this service, it’s still a lie. The company not done away with late fees. It’s just converted them into something else using deception and creative accounting. NetFlix all the way, baby.
