This is how that policy at Blockbuster works:
(please note that "Past Due" is not the expression Blockbuster uses, but I think it helps explain things better)
A customer returns movies (or games) that are more than XX days overdue (the number depends on which region your in... my Blockbuster in NY was a month, but the ones in MD and NC are 2 weeks).
- If the movie is late (returned after the due date), but not Past Due (the point at which the account gets charged for the movie)
1. The customer should receive an automated phone message about the late movie (via the phone # on the account... make sure it's up to date!) 2-3 days before it becomes Past Due.
2. If the movie is returned late but is not Past Due, the customer is charged a late fee (which depends on what region you live in... the late fee should never exceed $10).
NOTE: Depending on your region, you may have a grace period of X days to return the movie late without actually getting charged a late fee.
Past Due rules:
- If the movie is automatically charged to the Credit/Debit/Check card posted on the account,
1. If the customer has returned the movies, inform them of the Past Due and payment and let them know they can pick up their movies that they now own. They have 6 month to claim them. Otherwise, they go back into circulation in one form or another.
2. If the customer has not returned the movies, nothing is done since they paid for the movies and have possession of them.
- If the movies cannot be charged to the card on the account, or if there is no card on the account,
1. The customer is informed that the movie is Past Due and the charge must be paid for the customer to rent again. The movies are then held for one month. If the movie is not claimed, it goes back into circulation. If the customer comes back after this point and pays the fees, the movie (or a copy) is taken out of circulation and given to them.
2. If the customer refuses to pay, the charge is left on the account and the customer cannot use the account (on most occasions). Eventually (about 3 months after the charge), the issue is sent to collections. The amount sent for collections can be almost anything.
Blockbuster's reasoning:
When you make a membership, you agree to the rental and return policies, such as what is explained above. When you rent a movie and keep it for an extended (see: much longer than needed) time, you have taken that rental out of circulation. The longer the rental stays out of circulation, the less money Blockbuster makes. Nearly half of Blockbuster's total revenue comes from rentals. You have stopped Blockbuster from making money in the worst way possible by holding onto the movie, since they cannot rent it out to other people. As such, if you keep the movie for too long, Blockbuster will charge you the used price of the movie so that they can guarantee to turn a profit on the rental. That also may, in turn, give Blockbuster the ability to get another copy of the movie into the store to replace the one you have kept without having to pay "out-of-pocket" for a new rental.
Also, Blockbuster will not charge you more than the movie's retail value (+tax), no matter how late it is. The only exception is on individual TV show discs that are less than two months from the release date. That is one big advantage over a place like Hollywood Video, which could charge you up to $40 in late fees and THEN stick you with the cost of the movie.
...
Not that I'm fully supporting Blockbuster... they have a lot of practices that are outdated and/or need to be changed drastically. The only reason I still go to Blockbuster is because I know how to get the best bang for my buck when it comes to rentals and other stuff. I'd rather pay $5 for two movies that I get to keep for 5 days than go to the theater and pay $10 for one movie.
Sorry for the long post
I hope it clears things up, even if you still refuse to give them $80. Say hello to Collections for me.
PROTIP: If you speak to the manager and complain that it's too much, most managers are willing to cut the fees of this size in half. That way they can still get $40 of the $80 instead of $0 and they (might) get you back as a customer. Please note that this should definitely be done before it goes to Collections, or you'll be stuck with the full fee.
EDIT:
And yes, a store will typically have 30-40 movies caught in limbo just like yours are. If Blockbuster just puts them back into circulation without charging you anything for the extended period you kept the movies, then there's no reason to have due dates or late fees at all!
Also, you think Blockbuster's business is bad? How about their main in-store competitor, Movie Gallery (who owns Hollywood Video)?
They're at 0.0025 dollars per share. It's not Blockbuster's policies that are fully responsible for tanking the company. Most of the blame lies on how the rental business and modern media in general is shifting away from the previously-stead-fast system of old (see: Actual stores. circa: 5-25 years ago).
When you are running a single HDD and it is failing, there is nothing much you can do except getting a new one 
