It seemed amazing at first. Video rental titan Blockbuster (NYSE:BBI) is axing late fees? Considering that the company had projected $250 million to $300 million in late fees next year -- or an average of just more than $50,000 monthly at each of its 4,500 stateside stores -- it seemed like a massive salvo in the suddenly cutthroat video renting war.

The stock gained ground on the news, then ticked even higher last night when billionaire investor Carl Icahn revealed that he had grown his stake in Blockbuster and was now the largest investor in both Blockbuster and rival buyout fodder Hollywood Entertainment (NASDAQ:HLYW).

I get it. Someone far wealthier than I will ever be thinks that I was wrong with my October prediction that Blockbuster's stock will be a dud.

But has anyone tried to heave a looking glass toward January to see how Blockbuster's new policy will play itself out? Because if you read through the company's new terms it isn't killing off late fees so much as extending its rental period. Given the new one-week grace period, that two-night new release rental is now a nine-day loaner.

But what happens after nine days? Don't worry, keep it. Blockbuster will just bill you the retail price minus your initial rental fee. What was that again? Will Judy, the friendly Time-Life operator, be standing by? Does this sound fishy to anyone here but me? Folks will be buying pre-played flicks with incomplete packaging at new prices -- still curious as to why Viacom (NYSE:VIA) wanted out of this messy situation?

Oh, right. The forgetful slacker who couldn't tell eight days from 10 will still have 30 days to return the rental. Yet rather than being provided a full cash refund, yesterday's press release indicates that the tardy reneging renter will be provided account credit instead. Oh, and be hit with a "minimal" restocking fee.

So shouldn't the headlines read that Blockbuster is replacing its late fees with minimal restocking fees and overpriced used flick charges? And how upset will that renter be when he realizes that instead of getting his money back for that copy of Ishtar, he is now shackled to more inconvenient and awkwardly incomprehensible rentals?

I hear you. You're saying that a retail shopper needs to take some degree of responsibility. If you're the person who forgot to mail in a rebate form or let a clipped coupon expire, it's the price you pay for admission into the lapsed judgment carnival. Fine. However, pitching an end to late fees is going to lead to some real disillusioned customers at the store come late January, and you're the one who's going to be stuck behind them in line. You're the one who's going to pay the price behind the hemming and hawing and "can I see the manager" hollering. No one said that obfuscation was free.

If the same public that couldn't grasp McDonald's (NYSE:MCD) value meal grid is now expected to understand the underhanded litany of new fees, charges, and penalties at Blockbuster there will be no grace in this grace period.

I have nothing but respect for Icahn. I hope he makes a mint here. Yet investors buying into Blockbuster today better not come crying to me when they want out as this public fiasco unfolds next year -- only to be hit by their broker's "minimal restocking fee" on the way out.

So if you plan on taking Blockbuster up on its new rental fees, which films are you looking forward to rent come 2005? Is your favorite flick of all time even out on DVD yet? All this and more -- in the Great Movies discussion board. Only on

Longtime Fool contributor Rick Munarriz can't remember the last time that he's had to pay a late fee on a movie rental. He does not own shares in any of the companies mentioned in this story. He is a member of the Rule Breakers analytical team, seeking out tomorrow's great growth stocks today.