A quarter here, a million there...

These days it is difficult to buy anything worthwhile for a quarter. But if you believe your local video store, you can purchase some "piece of mind" for this price. \nInstead of having to sell a body part to pay the fine in the event of a damaged rental return, you can spend 25 cents and keep that kidney for a later date.\nSeem like a good deal?\nIt's a scam.\nLet us mull over some figures, and we will see how much of a con it really is.\nWhen I asked at my local store, I was surprised to hear that they could easily rent out 1,000 videos on any given Saturday night. Let us say they rent out 2,000 items for the entire week. In reality, I suspect it is likely to be more than double that, but for this initial exercise, we will be conservative.\nSuppose 50 percent of people take out this optional 25-cent insurance. From observing the number of people in the line in front of me as I waited to check out my DVD, it is probably closer to 80 percent (out of five, I was the only person who declined).\nIn one week, the store therefore takes in $250 in rental insurance. Say 1 percent of these videos are indeed returned damaged. Since the advent of DVD technology, this number is likely to be minute. For those people who are behind the times either through design, neglect or poverty, reflect on how often your VCR eats a videocassette. It happens, but so does dying in your sleep. In short, as small as 1 percent seems, it's still likely to be an over estimate.\nIf we assume a replacement cost of $15 the retail price of a DVD (this ignores the fact that video stores buy their stock wholesale and also over estimates replacing a VHS tape) -- our weekly figure drops to $100. Over a year this will accumulate to $5,200.\nHow many video stores offering this type of rental insurance are there nationwide? Let us pretend there are 10 stores per state belonging to the same chain as my local video store (there are two in Bloomington alone). The scam would contribute $2.6 million in additional earnings to this company. \nIf we increase our estimates to more realistic figures (4,000 rentals, 80 percent taking insurance, one percent damaged per month, a replacement cost of $8 and 1,000 stores) we find a scam that is probably netting $38.3 million annually.\nSurely if damaged video/DVDs were such a detrimental cost to the rental industry it would be included in the rental price?\nI suppose, when it comes down to it, a quarter is a minuscule expense for most movie enthusiasts. If you are particularly prone to anxiety over rented videos, then it might make sense purely from a mental health perspective.\nBut, for those of you who rent DVDs and fail to use them as Frisbees or beer coasters, put the quarter aside each week and go to the movies for Christmas. For people renting VHS tapes, it may depend on the appetite of your VCR, but I also encourage you to refrain from the impulse.