I'd have to assume they make a nice kicker from it. They add an identical rental fee each day. So if you roll it over past the return time, they re-rent it to you basically.
I know someone that owned a rental chain (the old style physical stores) in the 1980s and early 1990s. At any given time 15-20% of their sales came from late fees. Also interesting is that VHS tapes once cost $70-$100 ($40-$60 wholesale; $55 in 1984 is $140 today), so there was a serious investment and risk in renting them out to customers at the time. Stores typically purchased the tapes outright from the studios back then (so you can imagine the VHS tape inventory costs); more recently many independent stores switched to a shared revenue model, where they didn't have to front cash for inventory.
I know someone that owned a rental chain (the old style physical stores) in the 1980s and early 1990s. At any given time 15-20% of their sales came from late fees. Also interesting is that VHS tapes once cost $70-$100 ($40-$60 wholesale; $55 in 1984 is $140 today), so there was a serious investment and risk in renting them out to customers at the time. Stores typically purchased the tapes outright from the studios back then (so you can imagine the VHS tape inventory costs); more recently many independent stores switched to a shared revenue model, where they didn't have to front cash for inventory.