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Several times annually I must order a batch of RFID tags from DVDNow. The RFID tags are what we DVD Kiosks owners stick on the DVDs to make sure we get them back, instead of an empty DVD jewel case. What happens when you are sent a bad batch of RFID tags? Well, unfortunately I can tell you.
The last batch of RFID tags I received looked like pretty normal. As I was sticking the RFID tags on the DVDs I did not notice anything out of the ordinary. My first clue that something was wrong happened as I was sticking the first DVD in my machine for the week. The DVD was spit back out at me with an RFID security tag error. After three or four tries to get the machine to accept my DVD I gave up and tried the second movie. I was surprised to get the same error. Of the six movies I was going to put in the machine only two went in without a problem. I replaced the tags on the other four movies and after going through several third, fourth, and fifth tries I finally got all six movies in the kiosk.
The next day went no better. I was called at 7:30 in the morning with a customer wanting one of the movies. The movie would not come out of the machine. The store employee told me the kiosk was returning a security tag error. I had no choice but to give the customer a coupon code so she could watch another movie for free but she would have to wait a day before I could get her the movie she wanted.
I also had a customer return a movie after a full night’s rental that the kiosk refused as invalid or missing security tag. Oh my, another new release movie that I could not rent for a day or two.
DVDNow was very quick to send me a new batch of RFID tags. This batch seems to be working flawlessly, however the lost rentals and frustrated customers and employees have already occurred.
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5 responses so far ↓
1 Rod // Aug 6, 2008 at 5:44 pm
Bummer, what do you recommend to prevent this from happening again. And thanks for the last post (Update). We have a really big customer that is interested in hosting our machines, but I’m not sure if we should take on that many machines. Like I mentioned we have 3 and believe that they would want them in at least half of their stores which is about 20. Thanks in advance!
2 Rod // Aug 6, 2008 at 5:46 pm
Oh ya, another question… would any of you invest over 300K for over 20 machines to lock in a big contract with a very busy location?
3 Shawn // Aug 6, 2008 at 8:50 pm
Rod,
I think Redbox is making their profit off pure volume. If one machine is netting $500 a month that is not all that impressive. However, if you have 30 machines netting 500 then you are talking a lot bigger number. Not having to finance the 300K would help a lot too.
My advice would be to pray, talk with kiosk owners that own several machines, and pray some more.
4 Rod // Aug 6, 2008 at 9:21 pm
Thanks Shawn,
You the Man! Really appreciate your help. I will let you know how we do.
5 Mike // Sep 14, 2008 at 11:29 am
My partners and I are considering the DVDNOW business model. We are trying to determine if this is a good business. What have you found to be the average net rental per month? Have you had much success with getting advertsing dollars?
Thanks
Mke
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