Thank you for your interesting question. What could the best advice be
for a DVD rental shop? Here are some tips:
In order to keep DVDs in stock for other customers, you are going to
want to set up a certain amount of time (possibly one or two days for
new releases and three or four days for older movies) that a renter
can keep the movie for, and after that charge them late fees in order
to encourage them to give the movie back. You should set up a
predetermined late fee amount, and a period of time over which the
late fee will be charged, such as daily or weekly after it goes into
effect. Some stores set two days for new releases and give back a
dollar if the item is returned the next day, one day early. You will
want to let the renter know the exact day and time that they will need
to have the movie back, and it would be a good idea to print it on the
Most video stores have an outside drop box in case people want to
return movies late at night or early in the morning.
Late fees should be charged on a per item, per day basis, in order to
maximize the effect. Some shops might put a limit on late fees to
prevent them from compounding forever. Some jurisdictions might allow
for the prosecution of those who do not return DVDs as theft. Some
companies encourage the payment of late fees by suspending a renter's
renting privileges until after the product in question is returned and
late fees are paid. Recently, Blockbuster Video announced that it
would consider a video not returned after seven days as sold to the
renter and would charge the person's credit card for it as if it were
a sale. Blockbuster than allows the customer 30 days to return the
video to the store and get their money back, minus a "restocking fee."
This is a new policy, but it could be successful-- it would prevent
the loss of a DVD on the rental shop's part, while allowing for
recovery of damages, and not allowing late fees to compound forever
and not be paid if the item is never returned.
In order to do this, you would have to make sure to have a person's
credit card on file in order to charge it in case of an unreturned
item. Some shops take a person's credit card information when the
renter signs up to rent. This is a good policy which allows for
charges to be made in case an item of yours is not returned. Hollywood
Video has a policy in place allowing that if an item hasn't been
returned after 50 days, a person's credit card will be charged for it.
For Hollywood Video, if a customer does not have a debit or credit
card, proof of their address such as a utility bill or proof of auto
registration with the same address as their photo ID can be used to
One thing that you will certainly need, as far as renting DVDs, is
customer loyalty. One way you can build this is by compiling either an
email list or a mailing list to send to customers. You could have
customers sign up for either monthly or weekly emails or mailings, and
include the newest available movies and special deals in the mailings
you send to them.
Repeat renters could be awarded by creating a "frequent renters'
club." Under this idea, you could give renters punch cards to be
punched for each rental they make, with the 10th or 20th rental being
free as a reward for their custom.
Another version of this could be seen in video blocks. For example,
let's say that a regular DVD rental costs $4. You could sell "blocks"
of rentals in packages containing 25, 50 and 100 rentals, all for less
than what it would cost to rent separately. For instance, you could
sell 25 rentals for $75.00. Rentals would only be $3.00 each then. For
50 rental blocks, you could charge $100 (the movies would be $2 each)
and for 100 rental blocks, you could charge $150 (the movies are 1.50
Here is an example of a renter block policy:
An alternate idea would be to have a "movie club" in which members
would pay a certain monthly fee and be able to get either unlimited or
a certain number of movies included in their membership over the
course of that month.
Another idea, which I have taken advantage of at many American rental
shops, is to have a deal for older movies in which renters can get "5
Movies for 5 Days for 5 Dollars" or something similar. (This would not
be for new releases, but for older movies.) Another version I have
seen is "4 Movies for 4 Days for $4.99."
Innovative ideas like this will serve to build a customer base and
help your shop be successful relative to other people's.
Another example of a rewards program is Blockbuster Rewards. For $9.95
a year, Blockbuster Rewards members can enjoy certain benefits. For
instance, on Mondays through Wednesdays, for every paid rental, they
can rent a non-new release movie for free. If someone pays for three
new releases, they're allowed to rent three old releases for free.
There are no limits set to the Rent 1, Get 1 Free promotion. Upon a
purchase once a month, a coupon is printed out for one free non-new
release movie per month. In addition, for every five paid rentals
within one calendar month, the customer gets one movie for free, up to
two rentals a month. If a customer has 125 paid rentals in one year,
they are upgraded to Gold Rewards status and don't have to pay the
yearly fee, and can get the Buy 1, Get 1 Free promotion Sundays
through Thursdays rather than Mondays to Wednesdays.
You will need policies set in place for how to go about registering
people to rent. First of all, you should require one ID and one credit
card (if you plan on using a person's credit card as backup to charge
if they don't return the rental) or two forms of ID, with one being a
photo ID. Examples of acceptable forms of ID would be a driver's
license, passport, military ID, credit card, student ID. You want to
make sure that the person is who they say they are, so that they don't
take movies out in someone else's name and then not return them. Most
rental shops require government-issued photo ID.
You should have a policy in place that any time anyone wants to use
their account, to rent or to change something on the account, that
they must show you photo ID again, to prevent fraud. Many stores
require ID to be shown each time a person rents a movie. You could
also issue membership cards-- even paper ones-- that are small enough
to fit in people's wallets and that they could present when they rent
It would probably be a good idea to only rent to those who are 18
years of age or older, as children in many countries cannot agree to
contracts and might not be held liable for movies not returned.
Here are some examples of rates that you can charge to customers for DVDs:
That's Rentertainment of Champaign, Illinois
DVD rental rates
"? New DVDs $2.50/overnight
? Old DVDs $2.50/three nights
? Rent any 3 DVDs for only $6.00
? each additional night $1.00 per movie"
Here are some examples of rental block prices from That's Rentertainment:
"Pre-pay and save big!! (and keep your movies longer)
? Value-Meal-Renter-Blocks (15 rentals)
? Big Grab-Renter-Blocks (40 rentals)
? Super-Size-Renter-Blocks (100 rentals)
(Note: If you own a Block -- all rentals are for 3 days and are due at 9:00pm)"
That's Rentertainment also has daily specials, in which movies from
certain genres are less expensive than other nights.
"? Monday Foreign/Sci-Fi/Classic Sci-Fi .....$1.00
? Tuesday Classics/Hitchcock/Westerns .....$1.00
? Wednesday Independent/GLBT .....$1.00
? Thursday Horror .....$1.00
? Friday Rent any 3 dvds for .....$6.00
? Saturday Rent any 3 dvds for .....$6.00
? Sunday Animated stuff (includes all Anime) .....$1.00"
Some other ideas come from Hollywood Video. Hollywood Video has a
"movie value pass" which allows unlimited movie rental for a monthly
rate. The pass allows passholders to have up to three movies rented
out for free at any time. However, the movies are not new releases and
there is as much as eight weeks after its release on DVD that a new
release is added to the list of movies good on the Movie Value Pass.
Customers still can keep the videos for only a limited time and will
owe late fees if they're not returned in a timely manner.
Hollywood Video also has a new program in which users can pay a 25
cent insurance fee on their DVD. If it is broken while they have it,
they won't have to pay for it. The program is called Insurance Guard.
Otherwise, the person is liable for the DVD's full cost.
You could add other aspects to your shop to gain more profit,
including renting video games. Many video chains such as Hollywood
Video do exactly this very successfully.
You should have a policy in place in case a renter breaks a movie or
does not return it in acceptable condition. If you take their credit
card at registration, it could be wise to charge the credit card for
Blockbuster Video has a "Guaranteed In Stock" policy, in which certain
new releases are guaranteed to be in stock and if they're not, the
customer receives a rain check for another time to rent that video
free. This might not be feasible for a small DVD outlet, however.
You will probably want to have more new releases in stock than older
ones, and sell off the new releases as they get older and have less
You should also take care to examine the DVDs when they are returned
to you-- unlike VHS, DVDs are fragile and can be easily damaged or
If a customer says a DVD is damaged, you might want to compensate them
for the damaged DVD as Netflix does:
" Still on the topic of Damage: What is your policy on damaged dvds?
what do you define as a 'damaged dvd'? ie. if i return something with
a few scratches, but they still play okay is that considered damaged?
Marc Randolph [Netflix]: Every time a customer reports something
damaged, we put it aside to test it on several of our test machines.
If it plays well on all of them, we'll leave it in circulation. We
also randomly check discs.
Laurence Master [DVDOvernight]: If it plays it really is not damaged,
however we always test discs that customers say gave them a problem
and credit them if there is one.
Chris Watanabe [XrentDVD]: We'll test any discs that are in question
and as Marc has said, we randomly check titles to verify workability"
dvd rental shop
dvd damage rental shop
video store policies
If you need any additional help or clarification, let me know and I'll
be glad to help you out!