A few weeks ago we reported that Redbox was the subject of a class action lawsuit claiming that it has illegally collected $100 million in fees. According to the filing:
“While it boasts ‘easy $1 a night DVD rentals’ ‘with no late fees…ever,’ that is not the truth. . . Instead, Redbox charges its customers who return a movie even one minute late a late fee in the form of an illegal penalty.”
Brent Coon & Associates, the lawyers behind the suit, have now created a website promoting their cause. Among the sections on the site is an “Interactive Redbox Legal Fees Resource” that assists visitors in determining their eligibility to join the class action suit.
Also featured is the unfortunately written “Other Legal Troubles for Redbox” section, which reads as follows:
“Redbox, with its aggressive, take-no-prisoners approach to business, is in deep disputes with nearly all of the major Hollywood studios. Coming at a time when threatening to raise prices while simultaneously showing record profits, Redbox legal department is working overtime in a sue or be sued mentality. Needless to say, many people are calling for an end to the insanity and a return to accountability.”
As discussed in the commentary on the original post, does this suit have any merit? If so, is this purple propaganda going to help bring an “end to the insanity” we’ve all been suffering? Perhaps most importantly, do you feel sorry for “Redbox legal department” and its brutal workload?
[via Video Business]
Redbox’s business model *includes* generating added revenues from “late fees”.
When Blockbuster modified its return policy, it reported a directly related 30% drop in revenues.
Between the “late fee” and “anti-trust” issues, I can’t see Redbox growing its way out of this mess!
Schu, please shill somewhere else, and a little less obviously for your own good. These kinds of lawsuits are ridiculous. No one can deny that the eventual settlement will likely be a free $1 one-night’s rental for millions of redbox users, while the law firm racks up tens of millions of dollars in fees. It will be hailed as a “victory for the consumer.” It would be no surprise if lawsuits contributed more to our GDP than manufacturing or other “real” industries; moreso everyday with these kinds of predatory actions.
But wait! There’s more!
“$1 Movie Rental Costs Customers Hundreds”
copy and paste the link….from Nashville
http://www.wsmv.com/news/21532159/detail.html
Redbox fully admits in every one of their quarterly reports that they expect the majority of their customers to keep a movie more than one day.
Whether you call it an extra day rental or a late fee it all adds up to the same thing.
Redbox should have known that when they proclaimed, “NO LATE FEES”.
Learn from the mistakes of others or be doomed to repeat them.
I think maybe it is time for Mr. Lowe to step down as CEO. He has made a number of very amateurish misteps and is costing Coinstar investors money.
(please note: I do not have a stake in Coinstar, either short or long)
This is what I don’t understand… If you go to a Rent-to-own place and take out a dvd player at $1 per day TO RENT daily with the understanding after 6 months (180 days) you own it (at a cost of $180 total), your daily rental fee for each of those 180 days is not considered late fees but rental fees. This is the same for Redbox–no late fees just daily rental fees and after a certain number of rental days (25 days) you own the dvd. As with the Rent-to-own place, if you decide you don’t like the dvd player and bring back the dvd player in say 60 days, you’ve paid $60 in RENTAL fees, not $60 in LATE FEES. Maybe Redbox should fight this lawsuit with vigor AND WIN (unlike Blockbuster, etc)to claim victory for all us consumers who are responsible consumers and don’t file lawsuits as a way to try to justify our own irresponsible action of not returning items as agreed upon–like Laurie P.
I agree. The terms are clearly stated and simply to understand. What’s the problem? I’m surprised people don’t try to sue the sky for cloudy days.
I totally agree. What’s the bid deal? So far, I’d had many issues with Redbox liek machine not responding when I went to pick up my reserved dvd. I called them,they refunded my money and offered two other promo codes for free DVDs. Once the machine wasn’t taking my dvd back. I called customer service, they did some stuff and mahcine took my dvd back. I am a very happy human customer. I believe I have the responsibility to return DVDs.
I could not agree more with rb. Due to a bunch of irresponsible idiots filing these use less lawsuit, companies like Redbox are forced to raise their “late fees” eventually. In the end consumers lose. How many times do you have to return late to realize that it is $1 per day rental, no matter what the marketing slogan says. How stupid do you have to be to have not realized it and go to the extent of suing Redbox. This is such a bogus thing. If you are so pissed of at Redbox’s marketing, don’t rent. Go else where pay $5 for a week. Be happy…….
The only people who win r the scumbag lawyers
You are trying to compare apples to oranges, it just doesn’t work that way.
Let’s go to your example and change it to the terms that Redbox describes.
You rent a DVD player which is due back the following night by 9pm. The Rent-To-Own place proudly advertises that there are No Late Fees if you bring it back late. They advertise this on their website as well as in store.
You bring it back 4 days later and you are charged a late fee of $1 a day for the DVD player because in the contract , it has the wording that you are responsible for additional rental days if you do not bring it back by the due date.
Wait a minute you say, that sign right there says “No Late Fees”, oh those aren’t late fees says the clerk, those are additional rental fees.
You can call it by any other name you want, however those are late fees you are paying for not bringing the DVD player back on the due date. Since you clearly are advertising that you don’t charge late fees, this goes directly against what you have in the contract. Courts are not big fans of misleading and deceptive advertising and will side with the consumer when a company has gone out of it’s way to be misleading. There is case precedence with this issue already.
Redbox had a great idea, had the $1 a day plus $1 each additional day in their contract and if they had just left it at that, there wouldn’t be a court in the country that would agree with the plaintiff in this case.
However, someone at Redbox, decided to try and market this as “No Late Fees”. Those 3 words are coming back to haunt Redbox and it could be to the tune of $100+ million dollars. I bet whoever made that decision has been terminated or will be terminated after they lose the court case.
Ideally, Redbox is going to want to try and settle this out of court in order to minimize the possible financial impact on the company. As someone posted, likely it is going to be in the form of free rentals to their customers.
With $100+ million on the line, they are going to have to offer up some serious number of free rentals though in order to settle the suit. These free rentals, while not directly causing them an actual cash payout,is going to be a huge potential loss in rental revenue. Redbox is running on razor thin margins as it is and this is not going to help them out at all.
no people are just idiots. Redbox has a right to word it however they want. If you clearly look it says a dollar a day for each day that you have it. I figured it out and if people are to slow to figure it out then they shouldn’t own a credit card to begin with. If its your own fault you got charged your money they need to stop being a baby and get over it. If its redbox technical error then thats a different issue entirely. But sueing over the wording is a childish move.
Perhaps you are assuming there is a DUE DATE like a library book or Blockbuster. RB does not have nightly due dates. Users rent a movie for $1 a day. Keep it 1 night or several. You get charged $1 each day. Why is that so hard to understand? If you assume that the movie is due back by 9pm the next night maybe you can be confused. But THERE IS NO DUE DATE, so a movie can’t possibly be returned “LATE”, hence there can’t possibly be a “LATE FEE”.
You and I might no that, deep down inside, it’s a late fee to you and me even if you return it one second after 9 pm. But, come on, they gotta start the clock on the next day’s worth of “rental” fees sometime, don’t they? How else could they do it then? Charge you thirty bucks up front for the month and say “no late fees for the whole month!” Yeah, that would fly with consumers…not!
And, come on, it’s friggin’ ONE DOLLAR for f’s sake. It shouldn’t take a consumer more than one time to figure out how it works. A bazillion dollar lawsuit over this is ridiculous and should be thrown out.
What’s next? Sue the library for “draconian” late fees on late books?
Sounds to me like redbox competitors are just trying to find a sleazy way to take them out.
John Small and WingTipSchu are prosthelytizing the same message.
It’s just a matter of time before Redbox’s nightly rental fees double or triple for it to survive.
Hey, normal people, just don’t pay attention to the trolls and, hopefully, they’ll go away.
Kudos to Shane Smith for posting this item!
It reinforces that insideredbox.com is balanced, informative and independent of Coinstar.
A lot of people claim that they returned a movie but redbox never got it.
i wounder how many people insert a DVD into the machine backwards
and then they jump in their cars and drive off, then the redbox machine
pushes out the DVD and the DVD is up for grabs by anyone that passes by.
Peoples memories are very short. Rental stores absolutely used to charge additional penalty fees for returning their movies late. They didn’t just automatically re-rent you the movie. I remember the first time I heard about it, I was in a video store and asked about their late fees and she explained to me “What we actually do now is re-rent you the movie for five more days. So if you keep it past the due date you may as well keep it for four more days. We don’t charge fees per day anymore.” To me that was a cool thing. They used to rent you the movie for five days or whatever, then charge you money per day for every extra day you kept it. That IS a penalty. Just because pretty much every place has stopped doing that now doesn’t meant it never existed.
Those rental stores used to charge you like $80 or $90 if you lost a movie too, remember that? For VHS tapes! Redbox and their policies, even the $25 charge if you keep a movie, seem very fair and practical to me.
Well retail on a tape was $95 and cost was $68, so not a good comparison. The point that you like redbox is cool but, They don’t have 5 day rentals or 2 day rentals – they have 1 day rentals – so unfortunately bad comparison again. Point has been argued 100 times, it’s not the literal meaning it’s the implied meaning, and I’m pretty sure your not foolish enough to think red box gives a #$@# about being good guy’s, they are concrened with getting every penny they can from you. There is nothing wrong with that it’s a business, but I assure you they do not have a halo or wings. They have a great deal at $1 a day, if they keep it there. Finally I would be interested to see how low video stores could go on price if they were able to get paid as soon as customers owed them money, but I’m quite sure if they charged your card everytime you dropped off a late movie without paying you would quickly be in the store raising hell and closing your account.
You have to be really primitive (or have an agenda) to keep claiming that RedBox has late fees. A “fee” is something you pay that has no relation to keeping the DVD further – it is a penalty for breaking a contract. The contract with RedBox is simple: you keep it, you pay $1 a day. How much simpler can it get?!
Redbox is going to have eliminate the phrase “no late fee”.
The court can not pre-determine the *intention* of the renter and asks:
What happens…
if the kiosk is defective?
if there is a long line preceding the intention to return prior to the rental deadline?
what if the kiosk host closes before the rental deadline?
All that is really at question is the remedy. How much and to whom.
Will Redbox have to offer x number of promo codes for y duration?
Pay settlements to plaintiffs?
I experienced my first “long redbox line” on Christmas eve. There was only one kiosk available in the city that day because most were inside stores that closed already. Fortunately, this one was outside a Circle K.
The line was huge! I ended up waiting about 15 or 20 minutes to return mine before the 9pm deadline. Fortunately I had the sense to get there early enough.
I didn’t ask for it, but Redbox gave me a promo code or something because they made an error due to holiday hours (or something like that). Sounds reasonable to me, especially considering I returned them all early anyway so I didn’t even get charged an extra day.
Redbox isn’t any different than anything else you must do before a deadline (pay a bill, file your taxes, etc.)
I don’t know what date you’re reffering to, but whle I grew up in the late 80s and 90s, tapes never costed anywhere near $68 or $98. I was making no comparisons, just stating a point that rental stores used to charge extra fees beyond rental cost if you kept things late.
P.S. You have to have a credit card to get a membership at blockbuster or hollywood video and they DO charge your card immediately if you keep a movie too long, it happened to me quite a few times and I never complained because I knew the terms clearly, so I don’t know what you’re talking about.
I payed $80+ for Star Wars in the early 80s. The box opened from the side like a drawer.
I still don’t understand this. Redbox charges a dollar a day rental – easy to understand. Redbox’s “day” ends at 9:00, due simply to the fact that their kiosks are in stores and these stores maintain their own hours. Some stay open 24 hours, some close at 10 or 9. Also not a difficult thing to grasp, and it’s spelled out during the checkout process. A late fee implies a cost above and beyond the agreed-upon-when-rented dollar a day. Redbox does not charge anything above the dollar a day. So what’s the problem – people don’t take the time to read the terms of the agreement? How is that Redbox’s fault?
ITS A DOLLAR A DAY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Meaning every day you have a movie you will be charged a dollar, how hard is that to understand? ITS A DOLLAR A DAY!!!
Maybe I should be a lawyer (NOPE, not worth it.). You would think with all of this money on the line (sad that many lawyers out there are out to try to sue and make millions), that they would hire a great person to proofread their site.
Go to: http://www.redboxlatefees.com/featured_case
It says, “…single mother of 3 who lives in Southern Illinois.”
Go to the “Media Center” and “Redbox Fees Overview”:
http://www.redboxlatefees.com/etc/redbox/files/site/Case%20Overview.pdf
This Media prepared PDF says, “a single mother of 4 who lives in
Southern Illinois.”
So, who is the mystery mother who has 3 OR 4 children? Let’s get the court facts clear from the beginning– Does she have 3 or 4 children?
=)
maybe she doesn’t even know…
OK OK Ok, Today I will start advertising at my Video Stores “No Late Fees” because of the above listed reasons – I’ll get back to all of you on your portion of how much I get sued for. You people have no grasp on working with the public!!!
no i have a grasp on it and i work in retail and when they are being this completely retarded i politely tell them to grow up and get over it. People need to learn to read and stop being so childish. If an advertiser uses fancy wording to trick you well then learn for the next time its not their fault they were smarter than you.
I find it hilarious that Illinois business law is being disputed by a Texas law firm. So much for local expertise.
I’m pretty sure the case won’t drag out because the terms and well-documented on or within the kiosks. You agree to the rental terms by simply using the machine. The same way you would be committing fraud if you’re under 18 and using a Redbox because that is spelled out on and within the kiosk.
But the judge might suggest alternatives for Redbox. I’m pretty sure it would be easy to introduce a prorated system that just charges you for however many extra hours you happen to keep it. So if the movie’s due by 9:00 PM and you return it at 9:03 PM, you’d only be charged $0.04 more (basically $1/24 for keeping it into the next hour).
Man, I really don’t get it. The Redbox clearly says rentals $1 per day. Period. Hmm okay, I rent a movie, swipe my card. Return it before 9pm the next day. I’m charged only $1+tax. Cool. So…I keep the movie 2 days $2+tax. okay so i keep the movie for 25days $25+tax and I keep the movie. Whats the problem again?
I don’t see why anyone is surprised by this. Our country is out of control with sue happy people. In the end, we all lose because of idiots like this!
I hope Redbox wins on the a “common sense” platform.
Yea what garbage is this suit. They clearly state:
“Media Rentals.
When you rent media from our Kiosks (an “Item”), you will be charged the applicable rate per Item (the “Rental Charge”) plus tax, if applicable, for the initial Rental Period (as defined below). Subject to the terms below, you can keep the Item as long as you like and return it to any of our Kiosks. You will not be charged any additional Rental Charge if you return the Item to any of our Kiosks prior to 9:00 p.m. (local time), except as otherwise provided at certain Kiosk locations, on the day following your date of rental (each such period is referred to as a “Rental Period”). If you return the Item at any time after the 1st Rental Period, you will be charged the Rental Charge plus tax, if applicable, for each additional Rental Period that you keep the Item. If however, you do not return an Item within the maximum rental period (which varies from item to Item) you will be charged the “Maximum Charge” (which varies from item to item), from which we will deduct your first night’s rental but will charge you any applicable taxes. In such an event the Item is yours to keep. In the event you use a valid and unexpired promotional code provided by us when renting an Item from our Kiosks, the specific terms of the promotion associated with such promotional code will govern your rental.”
“For example, if you rent an Item prior to 9:00 p.m. on Monday, you will be charged the Rental Charge plus tax, if applicable, at the time of the rental. If you return the Item prior to 9:00 p.m. on Tuesday, you will not be charged any additional Rental Charges. If you return the Item after 9:00 p.m. on Tuesday, but before 9:00 p.m. on Wednesday, you will be charged an additional Rental Charge plus tax, if applicable, for the one additional Rental Period that you kept the Item. If instead you return the Item after 9:00 p.m. on Wednesday, but before 9:00 p.m. on Thursday, you will be charged an additional 2 Rental Charges plus tax, if applicable, for the two additional Rental Periods that you kept the Item.”
The above terms if I’m not mistaken were presented when you rent and can be brought up at each machine. I believe my box stated that if you keep the movie longer than 25 days just keep it you’ll never be charged more than $25.
How can you agree to these then sue. Besides $25 for the movies she lost isn’t 3 times the purchase price haven’t you check walmart lately? Shoot if I could go and rent a movie that comes out today and just keep it for $7 I would, but I can’t I have to wait for the movie to get the desired income. It’s nothing different then my local rental store does. After about 3 weeks of being a rental they sell used copies for $10 they aren’t going to let me take a new movie off their rental shelf and pay $10 and walk out the door to never return the movie, they have to get their desired use out of the movie or I’ll have to pay full retail for it and it’s usually $20-30.
This lawsuit has no merit. Redbox’s terms clearly state $1 dollar a night rental. Not $1 dollar rental. You pay one dollar for every day you have the DVD, up to 25 days. At which point you own it and they bill your credit card 25 dollars. The people that don’t read the terms before entering into the rental contract with the company are idiots.
Keep it up Redbox! I love your service for being so convenient, cheap, and simple.