Blockbuster Enhances Communications Regarding Popular No Late Fees Program; Program Is Favored By Customers for Flexibility, Convenience and Value

"Our customers will be glad to know that we are not changing our No Late Fees program, but we are adding some additional communications pieces to support the program," said Nick Shepherd, president of US store operations. "More people are renting from us more often, so customers clearly like No Late Fees. They like the flexibility, the convenience and the value that No Late Fees offers."

When the company launched the No Late Fees program January 1, Blockbuster explained the key terms of the program in a number of ways, including:

* terms and conditions were posted in participating stores;

* store employees were instructed to clearly notify customers of due dates, which still appeared on transaction receipts;

* End of Late Fees brochures with "frequently asked questions";

* phone calls and postcards were used to remind customers who had not returned product by the due date of their options under the No Late Fees program;

* www.blockbuster.com offered detailed information about the terms and conditions; and

* print and broadcast advertising announced the campaign, emphasizing that customers could take an extra day or two with their movies and games.

By March 31, Blockbuster will use additional communications elements in corporate and participating franchise stores in the U.S. to include:

* more in-store signage, including door decals, counter signs, and checkout line signs displaying the End of Late Fees brochures;

* No Late Fees Info Centers, complete with the End of Late Fees brochures and terms and conditions, that explain the entire program;

* redesigned receipts that include program details and the sales price and date on which the customer will purchase the movie or game if the item is not returned;

* highlighting of key program details on Blockbuster's website to make the information even easier to access;

* reinforced employee training, including specific reminders for effectively communicating the program to customers;

* an offer to refund/credit customers of corporate and participating franchise stores for prior restocking fees and/or charges for non returned product; and

* an offer to provide free rental coupons for customers of non participating franchise stores who did not understand whether the program applied to them at the time of the transaction.

The No Late Fee program is currently offered in more than 5,000 Blockbuster stores in the U.S., including all corporate locations and more than half of the franchised stores. The company introduced No Late Fees in its 425-plus Canadian stores earlier this year as well.

"Customer behavior indicates that most of our members understand the No Late Fees program," added Shepherd. "However, we want to do all we can to make sure everyone understands the program because the more they do, the more we believe they'll rent at Blockbuster. We want there to be no doubt in anyone's mind that there are no late fees at Blockbuster, and we are happy to provide extra materials to enable customers to use the program for their maximum benefit."

How the Program Works

Under the No Late Fees program, Blockbuster has eliminated late fees but still has due dates -- one week for games and two days or one week for movies. However, if customers need to keep the product an extra day or two, they can, stress-free because Blockbuster now gives customers an extra one-week goodwill period at no additional charge. If customers choose to keep their rentals past by the end of the seventh day after the due date per the posted rental terms, Blockbuster converts the rental to a sale and charges customers for the movie or game, minus the original rental fee. Then, if customers later decide they don't want to own the movie or game, they can return the product within 30 days, and Blockbuster will reverse the sale and only charge a minimal restocking fee of $1.25. The restocking fee may vary between corporate and franchise stores.

"We established No Late Fees so that customers would be able to enjoy the movies and games that they rent from Blockbuster without the stress of worrying about getting them back at a precise time," explained Shepherd. "If they need a little extra time, even an extra day or two, they can go ahead and take it. If they decide they want to own the movies and games, they can with the added benefit of being able to 'try before they buy.' Blockbuster's goal is to give customers more freedom, more choices and more fun with their home entertainment."

About Blockbuster Inc.
Blockbuster Inc. (NYSE:BBI) (NYSE:BBI.B) is a leading global provider of in-home movies and game entertainment with more than 9,000 stores throughout the Americas, Europe, Asia and Australia. The company may be accessed worldwide at www.blockbuster.com

DALLAS, March 29, 2005 /PRNewswire-FirstCall/ --
Source: Blockbuster Inc.