"Why Blockbuster Will Never Survive"

Reader and commenter Salviati writes in to share his personal experience with Blockbuster and his theory for why they will never survive fierce competition from Netflix and the new Apple video rentals.

I am writing to explain why I am no longer a Blockbuster Total Access subscriber and never will be again. Service wasn’t always so deplorable at Blockbuster, but in the last several months I have had three very negative experiences with the chain that has caused me to turn from a Blockbuster evangelist, who persuaded my parents and friends to join the Total Access plan, to a disgruntled consumer who won’t step into a Blockbuster until they’ve reformed their customer service attitude.

Keep in mind, I was an easy customer. I auto-paid my monthly bill. I held my movies for weeks and months on end without mailing them back or taking them back to the store for exchanges. I even went for a period of 6.5 months without exchanging my movies (While being charged $17.99 all the while). In the past year I was with Blockbuster, I exchanged only 11 movies in-store. I was as profitable as they could get. But between August and today, I have had three incidences which have convinced me that Blockbuster managers are (1)Incompetent (2)Powerless and (3)Apathetic.

Incident 1: I had exchanged out a set of 3 movies in-store in August. After keeping them out past their initial due date I was billed the price of the movies which is in-line with their policy. As long as they are returned within 30 days, Blockbuster is supposed to refund the charge minus a $1.25 processing fee. However, I got called out-of-town on a business trip, and I left before being able to return the movies. Once I realized the situation, I called my local store and asked if it was necessary to have my wife return the movies while I was gone, or if I could wait a week and return them myself. His answer was that it wouldn’t be a problem for me to return the movies after 30 days, but I would be charged the $1.25 fee per movie. Great, I thought, until I got back home. When I tried to return the movies (32 days past their due date), I was told that it was impossible to return the movies, and that I’d have to pay the ridiculously marked-up used price of $40 for the three (the price at Target for all three new was $21). The manager simply wouldn’t acknowledge that one of their employees had mis-informed me about my ability to return the movies. I tried to call their corporate customer service, who could only refer me to the district manager. To cut this long story short, I spent 3 weeks calling between the store manager and district manager trying to simply refund the movies, which they still sold on their Used racks. I was repeatedly told it was “Impossible” and “the computer won’t allow it”. I know the time I spent trying to return the movies was worth more than $40, but I felt like I was being wronged, and didn’t want to let the issue go. I finally caved when I received a threatening Credit Agency letter. I thought about writing this letter to The Consumerist back then, but I figured it was partially my fault, even though I thought Blockbuster did a terrible Customer Service job.

Incident 2: This one was much shorter. Me, my wife, and her friend walking into a Blockbuster with three return envelopes to exchange. My wife, who had never exchanged movies before, didn’t know to hold onto the envelopes until checkout and sat them on top of the counter as she walked in (thinking that she wasn’t allowed to walk around the store with them). About two minutes later, I realized she wasn’t holding them any longer and walked back to the counter to pick them up. Too late. The clerk had already checked them in without pausing even for a second to see if someone was planning to use them. Again, the clerk and manager claimed that they were powerless slaves to the computer and wouldn’t be unable to let us use the credit towards any new movies since they were already checked-in. Still sore after the treatment I had received a month earlier, I didn’t want to let this go, but they wouldn’t budge. I explained that I was a long-term customer who rarely redeemed my credits, but they stood firm. We ended up paying for two movies and left.

Incident 3: Today. I tightly clutched my return envelopes as I slowly browsed the shelves for three new movies to exchange. Finally, I settle on two movies and a Wii game. Last year, I was able to use a return envelope to pick-up a Wii game without a problem. Well apparently things have now changed. After scanning my three envelopes, they scanned the three items I had brought up. $5.34. “Excuse me, this should be an even exchange.” Apparently not. Now the returned movie only counts as $4 off a $9 game rental. Oh well, I thought, “Just take it off and I’ll grab another movie”. Nope – Apparently each credit gets automatically applied to a specific item and can’t be re-transfered to another item. On top of that, they wouldn’t remove the game from my checkout and insisted that I HAD to pay for the game, even though I hadn’t payed yet and the transaction was unfinished. They insisted that the transaction WAS finished and now I had to pay for it (Which doesn’t make any sense. How can the transaction be over before I am even told what the cost will be). After much debate with the manager, they agreed to take the game off the transaction (as a “Favor”), but they couldn’t do anything about applying the credit to another movie. By this time I had already decided that I would be writing this letter when I got home, and canceling my year-long subscription to Blockbuster Total Access.

It no longer surprises me that Blockbuster is failing as a company. They are closing many stores and hemorrhaging cash. Many analysts don’t even expect them to survive more than a few years. They may not be able to compete with the price and selection of Netflix or the new Apple video rentals, but they had one thing strongly going for them – availability. I knew that if I really needed to, I could go down the street and pick up a physical movie and talk to a real person if I needed to. Now my mindset has changed. Clearly, Blockbuster has decided that their employees and even managers are too incompetent to run their own stores and must be treated like trained monkeys. Even when I found a sympathetic ear, they were simply powerless to over-ride the computer for even simple tasks. Oh well, now that Netflix has unlimited downloads at less than half of the price I was paying at Blockbuster, maybe this is exactly the incentive I needed to make the change.

What do you Netflix customers think? How’s the water in your end of the pool?

Should he switch?

(Photo:medalian1)