h a l f b a k e r yThe phrase 'crumpled heap' comes to mind.
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Video rental stores charge late fees for videos not returned on time. When the customer returns to the video store the next time, they are required to pay fees before conducting their next rental.
Often, consumers will not return to the video store for some time after accruing late fees. They know
that the next video they rent will cost them the rental price plus the late fees, and often times this is enough to cause them to skip renting, or choose another store.
Video rental stores should, on a one week interval, grant amnesty to some of the customers with late fees. The video store would make a list of all persons with late fees, biasing it towards customers with late fees who have not returned recently. It would then randomly select a percentage of these customers, and mail them postcards telling them they've been granted amnesty, and inviting them back to rent again.
To prevent abuse by customers, the selection must be random, and true abusers (fail to return video, etc) should not be granted amnesty. The main idea is to bring back customers who are putting off paying 2-10 dollar late fees.
The economics of the idea are simple; as an example, if a customer owes 8 dollars and does not return for two months, it is in the best interest of the video store to grant them amnesty and return them to normal customer status (in that two months, if they rent ten videos at 4/each, we see clearly why this idea benefits business).
Finally, I believe this will increase customer loyalty for video stores, who, in the age of Netflix, must struggle to stay alive. I imagine a customer will be very excited to find out he or she has received amnesty, no questions asked. In fact, they might even return to the video store that very day.
(?) Consumer Alerts - Blockbuster Late Fees
http://www.wrgb.com...ction=article_29086
Their new ads claim "no more late fees" — but New Jersey's Attorney General says read the fine print if you're renting at Blockbuster. The AG is suing Blockbuster. [fstutzman, Jan 16 2006]
[link]
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Video rental is soooo last century. Subscribe to Netflix. |
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I don't believe in monopoly in any industry, nor do I believe that Netflix is the right choice for all customer. Plenty of folks have cancelled their Netflix accounts, not because Netflix isn't great, but simply because it doesn't fit everyone's lives. Regardless, the idea has nothing to do with wether or not video stores should exist, it is simply a suggestion for their managment. |
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Additionally, it is important to remember that there is a very significant portion of the population without access to a computer and internet connection, from which they could conduct Netflix rentals. Video stores are still very much a part of this population segment's life. This idea serves that vast population, which is often overlooked by those with access to technology. |
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Doesn't blockbuster already forgive late fees? |
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Blockbuster doesn't charge late fees, but it will charge you the full price of the movie if you keep it for a week. Late fees are an incentive to return movies, and for the mom and pop store, who has a wider variety of titles (thereby, less stock, and certainly not 400 copies of the latest blockbuster), eliminating late fees isn't an option. |
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My videoplace has a good system: they
keep a record of how many films you rent,
and rate people according to that. If you
rent a lot, and occasionally return it too
late, they don't charge anything. |
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I certainly like the "points" idea - and agree that people should be treated better for renting more. The beauty of the random sample is that it also stands to reward infrequent customers, who may feel little attachment to the video store. For the price of an amnesty, the video store stands to make a very strong impression with the customer. Of course, the frequent customer who recieves an amnesty will also experience this positive effect, so it is a win for both classes of renter. |
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Make sure you don't tell customers about this plan except by notifying them when they recieve amnesty. Otherwise people will know that they'll get picked eventually and just not come back until then. |
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Netflix is sooo last century. Subscribe to video-on-demand. |
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//Make sure you don't tell customers about this plan except by notifying them when they recieve amnesty. Otherwise people will know that they'll get picked eventually and just not come back until then.// |
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(Yes, I know that post was Jan2006 but the I just saw this idea) |
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Amnesties in general are a very dangerous idea, because even "one time" amnesties create the expectation of future ones. |
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I think something like a 'points' system would be better, though I might work things a little differently: late fees, once paid, go into an coupon account, where they can be used to discount future rentals. The discounts wouldn't totally offset the fees, but would encourage people to rent more movies so they could get some of their money back. |
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