Redbox Raises Rates

Blames debit-card swipe-fee regulation

BELLEVUE, Wash. -- Starting Monday, Redbox customers will have to dig a little deeper into their pockets for a movie rental.

Bellevue, Wash.-based Coinstar, which owns the Redbox business, said Thursday it's boosting the price of a standard-definition DVD to $1.20 from $1 because of an increase in operating expenses, according to a report in the Seattle Times.

Chief executive Paul Davis said a change in debit-card interchange fees was partly to blame. In a conference call with analysts, he specifically mentioned the so-called Durbin Amendment, a proposal by Illinois Sen. Dick Durbin that became law Oct. 1.

The new law reduced the average amount that retailers pay for debit-card transactions, so banks are making up for the payment shortfall elsewhere; now Coinstar is passing that increased cost on to its Redbox customers.

The Redbox price increase, announced in Coinstar's quarterly-earnings report, comes after "several months of testing" and is meant to strike "the right balance between keeping prices lower while addressing rising operating costs," Davis said.

He also noted it was Redbox's first price increase in eight years.