The genius that is Red Box
Recently, I discovered the wonderful awesomeness that is Red Box. I noticed the machines at the Wal-Mart in my neighborhood some time ago, but didn’t really pay them much attention until I found myself with nothing to watch one night. Usually when that happens, I’ll tap into the Video on Demand stuff on Uverse. They’re pretty good about having the latest DVD releases available, but they’re a bit expensive. Then I remembered the Red Boxes. By this time, there was one at the 7-11 6 blocks from my house.
If you haven’t heard of or embraced the concept yourself, I highly recommend it. What I really like is that you can register on their website and then find and reserve a movie at any Red Box location.
It got me thinking though. Their payment model is based on credit card transactions. So, whether you’ve registered or not, you get a movie by swiping a credit card. You get charged a buck per night that you have the movie. If you keep the movie longer than 25 days, it stops charging you and you now own the movie. Pretty straight forward.
But there’s a flaw in their model. They don’t verify maximum available funds prior to distributing the DVD. In other words, they don’t make sure your credit card has at least 25 dollars on it. They only authorize and capture the amount for the single transaction at a time. So basically, an unscrupulous person could buy a $25 Visa gift card that can be registered online to associate it to a physical location (some address / zip code… real or fake), spend $24 on other stuff (leaving a buck on the card), then go rent a movie and never take it back. That would basically let a person buy a DVD for the the price of one night’s rental, leaving Red Box no avenue for collecting on the rest of the balance.
I wonder if this ever happens to them. I’m sure I’m not the only one who’s figured this out. I dunno. Maybe they have cameras built into the machines like ATMs or something.