Redbox to Increase DVD Rental Prices to $1.20 per Day

Redbox is raising DVD rental prices to $1.20 per day due to increased operating expenses, including debit card fees with could be up to 21 cents per transaction due to new legislation.

Here's the text of the email Redbox sent out to customers:

Redbox is making an announcement about its prices today, and we want to make sure that you hear it from us first. 

Starting on Monday, October 31, the daily rental charge for DVDs will change to $1.20 a day.* The price change is due to rising operating expenses, including new increases in debit card fees. Daily rental charges for Blu-ray™ Discs and video games won't change.** Additional-day charges for DVDs rented before 10/31 won't be affected, either. 

In order to make the transition easier, Redbox will discount the first day of all online DVD rentals to $1.00 from 10/31 through 11/30. Additional rental days will be $1.20.*** 

If you have any questions, please visit redbox.com/pricechange. There, we've provided additional information. 

This marks our first price change in more than eight years as we work hard to keep prices low for our customers. 

Thanks to Brian, Bast, Carrie, Marc, TxGowan, Bob, Walt, Eric, Nancy, and everyone else for sending this in.

Comments

[Lethargicj]

THIS OUTRAGEOUS!!!! REED HASTINGS SHOULD RETIRE!!! NOW HE'S DRIVING REDBOX OUT OF BUSINESS TOO!!! BOOOOOOOO!!!!

[JohnnyO]

Interesting. How do debit card fees enter into this? I thought the whole idea behind the legislation was to lower cost to merchants. This is the reason some big banks are starting to charge users debit card fees. [Of course, in the last two days, a number of banks are backing off, since not all banks went along with the idea -- similar to the way airlines start to raise fees, and fall back if most don't go along.]

[Jack]

I believe the debit card fees are one of the reasons that Redbox is giving for the increase.

I don't think they should do it for every night, though. They'd look much better to the consumer if, for example, they charged the extra 20 cents just for the first three or four nights, to cover that cost.

They only charge you once anyway, regardless of how long you keep the DVD.

[frank22]

I read somewhere that Redbox had negotiated a .06 swipe fee but with the new rules Visa and Mastercard enforced the amount allowed -.21.

This new debit law was only a partial fix. Redbox isn't allowed to charge more for debits. Credit cards usually charge a percentage, so the low cost means they only pay around .05 or so for CCs.

I use a credit card and basically am being forced to pay subsidize the debit fee users. Debit card use is not the best way to pay for things anyway. You are giving up many protections, and fraud or mistakes can mean money coming out of your account directly. If I were Redbox, I would have looked into not accepting debit, at least as a negotiating tactic. However, I don't know the percentage of customers who use debit, so admit it might not be the best move. It just pisses me off that a transaction costs that really cost almost nothing should cost someone 20% of a transaction, and the person incurring the costs can't be asked to pay.

In general though paying $1.20 a night to watch a movie is fine. I don't use Redbox much because I don't like the selection. Right now I don't watch enough movies to justify a monthly membership. I wish I had one of those old fashioned video stores so I could spur of the moment go and rent a movie every once in a while.

[rjm]

6 cents a swipe is a deal. I wondered how they kept their costs down. 20-30 cents plus 1-2% would be lots more.

No way to take debit without credit.

I can use debit at one place that wont take credit. Credit costs MORE 99% of the time.

For me, the increase is not suprising. Cant expect RB to have the same prices 7+ years straight.

I would have probably went to $1.19 but I would have had 99 cent rentals to start with.

A 20% increase corresponds to the increase that those of us on the 3+streaming are now paying.

RB & NF will always have pricing similarities. But for me, redbox is not a deal because special trips to pickup and/or return them kill it for me.

Plus the waits.

Its ok for an extra movie now and again though.

Im probably going to switch down to the 1 or 2+ streaming because there isnt much on DVD lately and I have a lot of things I could watch on streaming.

Clearly though, streaming only is the best value.

[Walt D in LV]

I think one of the major items being overlooked is that they say until November 30th, if you go online to reserve a rental, you still get the old price. I am quite surprised how many people do NOT use the online service part of Redbox, and this (although it’s only 20 cents) will get a lot of people using the online service.

I think it's a great move for that fact alone. A very smart move. Getting people on to register at your website gives you their e-mail address to which you can use to send advertising, and the consumer can reserve movies, so no wondering if Redbox has it or not.

Though the increase will turn off some, it will be better for Redbox in the long run.

[Jack of All Tirades]

A 20% increase - oh, the humanity, this will bankrupt the masses, this will... wait, is this less than a $.25 increase overall to rent a movie? Nevermind, I'm sure all those who suffered psychological trauma at Netflix's price increase to will weigh in. Maybe even a tie-in with the Occupy Wall Street movement on how this is another sign the man is sticking it to us.

[Scott of Detroit]

This is a huge misstep on behalf of RedBox. The Netflix debacle is their opportunity to steal customers. A 20% price hike doesn't accomplish the stealing of Netflix customers.

Now if they raised prices slowly, by let's say 5 or 6% a year and called them "inflationary" increases it would be less painful and noticeable.

When will companies learn that you shouldn't hike your prices up by 20% overnight (or in Netflix's case 60%).

[byteme]

Redbox test marketed a price increase (to $1.15 per night, I believe) in a few key cities. I'm guessing they didn't see a substantial decrease in rentals in those markets due to the change. That is likely what prompted this national price increase.

[someguy335]

No change for Blurays? That's fine, I never rent standard DVDs from Redbox anymore.

I wonder what this will do for the coupon codes. Will they be worth $1.20 now? Meaning my Blurays will only cost 30 cents now?

[Kevin]

This isn't that big of deal. I live in one of the test areas for $1.15 per night and it hasn't deterred my friends and family from using the rental kiosks. There's no way Redbox can continue operating at $1.00 per night. Correct me if I'm wrong, but weren't they operating at a loss?

$1.20 is a small price to pay for a DVD rental. I cancelled the DVD side of Netflix and haven't looked back. If I must have a newer release DVD I just walk to the Redbox.

[Marcus]

Not surprising. Netflix waits until Blockbuster goes under to drop their price hike, Redbox waits until a slew of people drop Netflix to do theirs. I'm still saving money.

[bigqueue]

For me, the user, credit is cheaper at the time of purchase. I pay nothing extra, and GET CASH BACK. Plus, the laws give me protections that debit cards don't have (as mentioned by others). I pay no interest since I pay in full (automatically) every month.

I understand that theoretically, we are all paying 'more' due to having to pay the credit/debit fees, but I, as a customer, am paying exactly the same at time of purchase with cash or credit.. and less over time due to cash back as I said... Plus, I don't have to go to the ATM. So credit wins for me.

[James T.]

I miss Hollywood Video! LOL...But seriously, when a business needs to get more cash, the people foot the bill. Whether it's the banks, cable, cell phones, whatever...Pay more, get less is business moto these days. GRRRRR!