Blockbuster, having fallen even farther behind than the Post Office, has filed for bankruptcy and is expected to close at least 1,000 of its video-rental stoes.
Blockbuster was slow to adapt to changing conditions and lost ground to both digital outlets such as Netflix and Amazon and to Redbox and other vending machines conveniently located in supermarkets, convenience stores and other high-traffic areas.
The company sought to put a good face on its situation, issuing a statement that said it was "making good progress in our recapitalization process."
All of Blockbuster's U.S. operations, including its stores, DVD vending kiosks, by-mail and digital businesses, are open and serving customers in the normal course, the company saidin a statement. Blockbuster is fulfilling all orders as usual, including continuing to provide access to new releases the first day they become available. Blockbuster intends to continue honoring its Rewards program, valid coupons, gift cards and other customer programs.
It would be diplomatic to say that consumers will mourn the company's demise or, at best, shrinkage, but it wouldn't be true, at least among the countless consumers who have felt ripped off by late fees, missing items and unauthorized charges.
Many customers, like Robert of New Bern, N.C., have complained that they were charged for movies or games that were, in fact, returned to a Blockbuster drop box.
"The very first time a female rep said one game had been returned, next time I called they changed it to none," Robert said.
Gretchen of Erie, Pa., was angered when Blockbuster charged a late fee to a debit card that she had never registered on her Blockbuster account. The store manager told her the store's system stored all cards used at the check-out counter, not just those the customer provided at sign-up.
"Watch out for Blockbuster and their unauthorized transactions on your bank account, as they store bank account information if you use a debit card when you rent a movie!! GOODBYE BLOCKBUSTER and HELLO NETFIX!" Gretchen concluded.
Nor has Blockbuster's history been entirely unspeckled by run-ins with the law. In 2005, 48 states and the District of Columbia sued the company, alleging that its "No Late Fees" program was misleading because it did not disclose that customers would be charged for the selling price of any video they did not return within seven days of its due date. The company settled the suit and agreed to provide refunds, credits and coupons to affected customers.
Blockbuster quietly reinstated late fees in 2010, claiming it was simply changing its policy to make it consistent with its competitors.
Also in 2005, Blockbuster closed a store in New York City and left behind a gift for enterprising identity thieves -- boxes and boxes of customer membership applications, containing valuable personal information, all sitting on the sidewalk in plain sight.
The store manager blamed New York City's Sanitation Department for not promptly picking up the boxes.