How Does Redbox Make Money?

Posted by Mrs Money on February 11th, 2010

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Creative Commons License photo credit: evelynishere

Have you ever wondered how Redbox makes money? I’ll tell you how.  A few weeks ago, we were at the grocery store and had picked up The Hangover movie to buy. As I was standing in line to check out, I realized I should check the Redbox first.  Sure enough, they had a copy, and while I was in line, a store employee gave me a free Redbox code.  It totally made my day.  Not only did I save over $20 from not purchasing the movie, but I also saved the $1 rental fee.

We watched the movie (it was hilarious!), and then the next night at 9:30PM Mr. Money remembered we hadn’t returned the movie.  Since we had already been charged for the night, we decided we’d keep the movie and just return it the next day.  When Mr. Money ran some errands the next night, he stopped by the Redbox to return the movie.  It was full and not accepting any returns.  A little irritated, he tried another machine that was not even 100 feet away at McDonald’s.  It was full too.  He decided that he would drive the 4 miles to the next nearest Redbox to return it.  Guess what?  That one was full too.

Frustrated, Mr. Money came home.  We decided it wasn’t worth the aggravation of going to another Redbox.  The next day, he tried another machine and it finally accepted his return.  We only ended up paying a little over $2 for the movie, but I was more concerned about the frustration and inconvenience of having to go from Redbox to Redbox. Everyone wonders how Redbox makes money.  Now you know. ;)

Do you rent movies from Redbox or somewhere else?

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25 Responses to “How Does Redbox Make Money?”


  1. Steve says:

    Did you contact their customer service and explain the inconvenience?

    I have had two interactions with their customer service. First, I reserve a redbox movie online so I could pick it up on my walk home from work. When I arrived, the machine was not working. I called the number on the screen and the customer service rep apologized, cancelled the reservation, and gave me two free promo codes for my hassle (I still paid the $1 so it was like one free movie).

    In the second situation, redbox sent an email to a large group of folks in my area apologizing for full boxes and other inconveniences. They said they were working on the issue and gave us all free promo codes.

    You may say that free promo codes does not compensate for the inconvenience, but it might be worth a shot at contacting their customer service and explaining the hassle you had to go though.

    In that case, redbox would be making money by ensuring their customers are satisfied and willing to continue to use their product despite the inconvenience.

    [Reply]

    Mrs Money Reply:

    Steve- My hubby called. He said that he couldn’t get a live rep. I should try calling myself, especially if you had great service from them. Thanks for sharing!

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  2. Evan says:

    I LOVE REDBOX! Actually picked up 3 movies from it yesterday during the NY snow storm. Watched 2 yesterday (will be returned today) and will watch one today or tomorrow.

    Even if I watch it tomorrow that will be less than 6 dollars for 3 movies! Which is great considering blockbuster by me is in the $5s for one movie for a couple nights.

    [Reply]

    Mrs Money Reply:

    I normally love Redbox too. :) I went into Blockbuster one night and was SHOCKED it’s $5 for a rental! Crazy!

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  3. Huh. Never thought about a Redbox getting full. We have a Redbox (just one) in our little town, and it’s very popular, but I can’t imagine it ever getting full. Thanks for this observation.

    P.S. – The Hangover was better than I expected when we rented it.

    [Reply]

    Mrs Money Reply:

    Saving Her Life- It was annoying. But I would continue to rent movies I guess. Hopefully it was a one time thing.

    The Hangover was hilarious!! I loved it. :)

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  4. Megan says:

    I haven’t had that problem (yet) but I remember reading on their FAQ – if your redbox is full call their toll-free number.

    [Reply]

    Mrs Money Reply:

    Megan- My hubby called and said he couldn’t get a rep. I should try calling again. Surely they have a record of when we returned the movies. :)

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  5. I haven’t used RedBox in a while (none close to my house) but I don’t remember any of them being full. I wonder if it’s because they’ve become so much more popular in the last couple of years or an easy way for them to boost their profits? Sounds a little suspicious that the machines would be full – are that many people really renting in one place and returning them in another? I use a similar vendor at my local Krogers and have never run into the problem of the machine being full, but then again I don’t know how many machines are in my area. I would be curious to hear what the customer reps have to say, they should at least give you and your husband a credit for a free movie for your troubles.

    [Reply]

    Mrs Money Reply:

    David- We have tried the one at Kroger’s, the gas station, and McDonald’s. My hubby said he tried to call but couldn’t get someone. I probably should have followed up. :)

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  6. Lisa says:

    Hi, first time here, found your blog from Domestic Cents. Funny that you posted this, because the same thing happened to my husband yesterday. He tried to return our movie and the machine wouldn’t take it. He was able to call the customer service number and they sent a signal to the machine that allowed the movie to be accepted. Guess we are lucky he was able to get through to someone, I would have been very angry if we had to pay a late fee, because the machine wouldn’t take the movie.

    [Reply]

    Mrs Money Reply:

    Hi Lisa! :)

    Sorry to hear you had the same problem. That’s crazy that they can do something like that. I am glad it worked out for you! We were a little miffed about it too. :)

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  7. Vee says:

    So funny, because just the other day someone was talking about the Redbox, saying that the one in town was out of order when he tried to return his movie! We live in a really rural area, so there is only one in town – the next one is 15 miles and 3 towns over (and it’s new, so many people don’t know about it). Sneaky, Redbox… very sneaky!

    [Reply]

    Mrs Money Reply:

    Vee- WOW!! That would really suck. I guess at least we have a few around to try. I noticed that they are adding another one to the Kroger. Hopefully that will help!

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  8. Tina Klein says:

    I have lost so much money to redbox..even had to buy a few..so everytime my kids ask to rent one..I firmly stand by my NO!

    I am sure it is a good bargain for some though

    [Reply]

    Mrs Money Reply:

    Tina- That stinks! I have always wondered how they know if you’ve made the movie not work, you know?

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  9. Bucksome says:

    We love Redbox! The full issue has happened once to us, but the next box is about 2 miles away so we just returned it there.

    Frankly, we rarely even pay the $1 fee because of all the promo codes. Sure beats the $5 fee charged elsewhere.

    [Reply]

    Mrs Money Reply:

    Bucksome- I will have to do some searching for more promo codes. That does beat the $5 elsewhere! We have thought about doing Netflix, and when they have it where you can get it on the Wii we’ll probably do that. :)

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    Zachary Reply:

    Netflix now has a programming disc for the Wii. It has actually been out for almost 2 years. I love it. You should definitely try Netflix soon.

    [Reply]

  10. There used to be 3 Redboxes within a 2 mile radius of where I live. One has since been replaced with a blue box…or whatever Blockbuster is calling there version.

    Soon as I read the title…I knew the answer was late fees!

    I’ve had this happen a couple times as well (machines out of order) and they were able to remedy the problem.

    The cost to reproduce a DVD is very cheap…I wouldn’t be surprised if the case & DVD are less than a $1….so once the installation of the actual machine is paid for…its churning profit. Besides maintenance, I don’t see any overhead on the individual machines.

    [Reply]

    Mrs Money Reply:

    Lakita- It’s amazing, isn’t it? I don’t mind the late fees if I forget, but not if it’s their fault the machines are full! :)

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  11. Kim says:

    We don’t use redbox because there aren’t any convenient locations since we kind of live out of the way. We use Netflix and enjoy internet streaming. We have it hooked up to our TV and we really get our money’s worth!

    [Reply]

    Mrs Money Reply:

    Kim- I have heard they are going to incorporate it where you can watch through your Wii. If that happens, we’ll probably do that. Much more convenient and cheaper! :)

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  12. gymstone says:

    Theres 20, redbox’s within 3.7 miles of me. Still never tried it, =/ love the up to date statistics on the iphone app, i think i will make the jump soon.

    Hollywood, Ca

    [Reply]

  13. damian says:

    well if that ever happends to you again or anyone else. redbox is more than happy to take your call and wont charge u if their boxes were full. the way they make moneys … is by a major investment. which ends up giving you way more than you invested.

    [Reply]



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