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Thursday, August 04, 2005

The Absurdity of Meaningless Rules

Blockbuster has announced a new policy called "The End of Late Fees."  The terms of the program are a bit convoluted, but most of them make some sense.  However, one term in particular is so bizarre that I have no choice but to comment:

Rentals are due back at the date and time stated on the transaction receipt. There is no additional rental charge if a member keeps a rental item up to 7 days beyond the pre-paid rental period.

What does it mean that rentals are due back on a particular day, but that there is no fee or penalty for keeping them seven more days?

I found myself at Blockbuster a couple of days ago (first time in a long time) and picked up a DVD.  The cashier told me it was due back on Thursday.  I asked him whether there would be a late fee if I returned it on Sunday instead.  He told me that there wouldn't be, in keeping with the new policy.  But he adamantly insisted that it would be due back on Thursday.  I didn't want to pick a fight with the guy or get into a philosophical discussion about the meaning of the rule; after all, he didn't make the rule.  I could only shake my head and walk away.

So I ask again:

What does it mean that rentals are due back on a particular day, but that there is no fee or penalty for keeping them seven more days?

Posted by Hillel Levin on August 4, 2005 at 09:34 AM in Odd World | Permalink


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In an effort to add another twist to Bruce's mention of lease agreements and late fee clauses, I would point out that some landlords now use a rent structure as follows: "Rent is $750 and is payable monthly on the 5th day of the month; any payment made by the Tenant prior to the 5th day of the month may be at a the reduced rate of $725."

[And, yes...if provided for in the lease agreement, a breach of the lease which results in an acceleration of the rent would be calculated on the basis of the $750 in the example above]

Posted by: CDB | Aug 5, 2005 4:36:22 PM

Some people are rule followers.
Some people calculate financial incentives.
Some people are suspicious that blockbuster will report late returns, and tthat it wil become an issue next time they are nominated to the supreme court or something. Today is the 4th. I expect my reliable tenant will pay the rent tomorrow, and my unreliable tenant won't, but might come up with another $20 or something so it's not a total loss.
Blockbuster's business model is based on knowing some of its customers will return the item shortly after it's viewed, while others wait till they get around to it.

Posted by: arbitraryaardvark | Aug 4, 2005 5:37:49 PM

Hillel, I brought up speed limits only because they have been puzzling me for a long time (when everyone goes 65 mph in a 55 mph zone, and there is considerable informal shame sanctioning of 55 mph drivers, what's the real "speed limit"?), but you are right that there are isolated examples of 1-mph-over enforcement -- so isolated it usually makes the papers -- so they are not the best example. However, there's also my lease example -- my last apartment had a 5-day grace period. So when was the rent due? It felt like it was due by the 1st of the month, not the 5th. But, contractually, they could not enforce any sort of penalty until the 6th. There's a number of cases like this -- I'll bet there are libraries out there that won't charge a fine until the book is X days overdue.

I think what makes the Blockbuster case different from the lease and library cases is that Blockbuster isn't even applying a shame sanction to late movies. Their ad campaign is designed to meet the pressure exerted by Netflix, which allows you to keep movies as long as you want -- because they are charging you a monthly fee, so they don't care. I think it is the discordance between the ad campaign and the insistence that a movie is due on a certain date that is giving rise to your questions, not the mere existence of a rule without a financial penalty for violations.

Posted by: Bruce | Aug 4, 2005 2:36:17 PM


Is the claim that Blockbuster expects its customers to be honorable gentlemen and -women? And is it reasonable to expect that renters of American Pie and the like are honorable gentlemen and -women?

Personally, I feel uncompelled to return my video on this Thursday rather than next. If that makes me dishonorable and a non-gentlemen, oh well.

Posted by: Hillel Levin | Aug 4, 2005 2:01:26 PM

Minor point of fact: Blockbuster can (and does) estimate when rentals will be returned. Some people return rentals early, others wait until the "due" date (or even later). The best predictor is the return profile of similar movies in the past. Thelength of the rental cycle is used to determine how many copies to stock. (Over and understocking generally result not from changes in the length of the average rental cycle but from poor predictions of rental popularity.)

Posted by: Antony | Aug 4, 2005 1:58:55 PM

Returning in accordance with the the unpenalized due date is a point of honour sirs, that any gentleman or gentlewoman would understand.

Posted by: TomH | Aug 4, 2005 1:51:58 PM

on, not with. yeesh.

Posted by: Paul Gowder | Aug 4, 2005 1:45:17 PM

Finally, Hillel, we agree with something! :-) Cf. this post on Balkinization as well as my lengthy debate in a comments section here with Simon. A law that does not compel someone to do something is no law at all.

Posted by: Paul Gowder | Aug 4, 2005 1:44:45 PM


There is a difference between speed limits and the Blockbuster policy. A rational person may see a speed limit as a signal from the state as to what the safe speed is, even if the state does not enforce it. Second, the state *may* enforce it; even if you are one mile/hr over, you could get a ticket. Third, one reason that the state may not enforce it is that it is not technologically feasible. It may be that our speed guages aren't precise enough; or radars aren't good enough--and therefore there may be a real dispute as to whether someone caught going 1 mile over actually violated the limit.

With Blockbuster, however, they could easily enforce a real "due date" rule. In fact, they did for decades. They don't have to accept sorry-ass excuses. It is an easily-enforced bright line rule. Giving you an extra seven days really means that they don't care whether you bring it back until that period has elapsed.

Indeed, it is a bad policy for another reason as well. Under the old bright-line standard, they could reasonably estimate when the video would be returned, a service to other customers. Now, they can't reasonably estimate--unless they assume you aren't returning it until the end of the "grace period." If that is what they assume, then that should be the rule in the first place. And if you don't return it, you bought it.

Posted by: Hillel Levin | Aug 4, 2005 1:22:11 PM

This policy has been going for awhile. After 8 days they charge your credit card for the price of the video. If you bring it back, then you get that refunded, minus a restocking fee. When Blockbuster first started the promotion, they were unclear about that, and some states went after them -- New Jersey comes to mind. Here was a post on that issue from February: http://www.theconglomerate.org/2005/02/blockbuster_a_f_1.html. I am sort of obsessed with video rental fees.

Posted by: Christine | Aug 4, 2005 11:18:29 AM

You're right that the policy makes no sense if "due" means "or else we'll charge you." But there are lots of other contexts where something may be due, but you aren't penalized for lateness. A lot of landlords give a 5-day grace period on when the rent is "due". Sometimes the difference between the rule threshold and the penalty threshold is to make enforcement of the penalty threshold easier, e.g. enforcement of speed limits. If you're 8 days late in returning your video, there's no way you can complain about the reasonableness of imposing the charge. ("I had it out on the counter and was going to bring it back, but the phone rang and I forgot -- 7 days in a row!")

Posted by: Bruce | Aug 4, 2005 9:46:19 AM

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