FREE MOVIES LURE CONSUMERS TO RENTAL DEPARTMENTS

STEPHANIE LOUGHRAN / Additional reporting: Mark Hamstra

Some retailers said they have found the best price for movie rentals: $0.

Offering free-movie rewards for using loyalty cards and other frequent-shopper programs encourages consumers to spend more money in stores, according to some retailers who offer the incentive promotions.

"If they can get something for free, people always like that," said Michael Filice, an employee at Quality Market and Video, Salinas, Calif.

Quality, a small independent grocer offering video rental, said the store has long offered a stamp-card program in which customers get every seventh rental free.

Hy-Vee, West Des Moines, Iowa, uses a punch card allowing customers to get every 10th rental free after nine rentals at regular price, which is $1.99

K-VA-T Food Stores, Abingdon, Va., allows customers who rent 10 videos to get the 11th for free, a promotion the chain has long had in place. New releases cost $3 at K-VA-T.

Some retailers are tying in the free-movie offers with grocery purchases.

One Southeastern supermarket chain is offering customers the opportunity to redeem S&H Greenpoints, the modern reincarnation of the S&H Green Stamps loyalty program, to gain free rentals in the retailer's stores that are equipped with video-rental departments.

The video manager for the regional retailer, who asked not to be identified, said customers earn one free rental on a 99-cent, $1.99 or $2.99 movie every time they accumulate 1,500 S&H Greenpoints through the entire month of April.

Customers receive 10 Greenpoints for every $1 they spend at the supermarket.

"We wanted to try it and see what it would do," the video manager said. "You have to do some things to differentiate yourself."

After the first two weeks of the promotion, 884 coupons were redeemed out of 9,000 video rentals, the video manager told SN.

The stores have touted the promotion with in-store signage. In addition, customers who collect 3,000 points receive "teaser" fliers at the checkout, located before they pass the video rental area on the way out.

"People have really liked it because they're always looking for redemption opportunities. What's better than a free rental?" he said.

Not all retailers agree, however.

"Our prices are lower than everyone in the area, so we never need to do those kinds of things," said Laura Fisher, video-rental supervisor, Martin's, South Bend, Ind.

Others said they prefer to offer incentives to drive business on certain days.

Several Dierberg's supermarkets, for example, which normally charge $3.49 for new releases, offer customers rent-one, get-one-free promotions to drive business on Tuesdays and Wednesdays.