Campus Textbook Rentals Fill Student Demand for Less Expensive Options

Even though colleges continue to explore eTextbooks, student demand hasn't caught up with the hype.   

At both Chaffey College in California and Auburn University in Alabama, eTextbooks make up less than one percent of sales. 

The technology is still clunky. Students don't have devices to read the eTextbooks and they aren't as cost-effective as many students would like. And students prefer to read on paper, said Jared Ceja, director of auxiliary services at Chaffey College Bookstore. 

"That traditional book is still meaningful to many people, especially at the community college level given the wide range of age groups we deal with." 

On top of that, eTextbook titles aren't widely available. Out of the 2,500 textbook titles that professors will use this semester at Auburn University, only 50 were available in digital format, said Rusty Weldon, assistant director of the Auburn University Bookstore.

While these two institutions will continue to pursue eTextbooks, they're trying different ways to make textbooks more affordable for students. And they're following a pattern that Eastern Illinois University has been using since 1899: renting textbooks.

The Eastern Illinois University model

Unlike other universities that rent textbooks through bookstores, Eastern Illinois created a Textbook Rental Service department that rents textbooks in-house. Every student pays $9.95 per credit hour each semester to rent books. 

If students take 15 units, they'll pay $149.25 for all their books. Considering that purchasing books can run upwards of $300 a semester, that's a good deal. 

"We literally have a book for every student so they don't have to worry that they have paid a rental fee and are going to be without a textbook," said Carole Miller, director of Textbook Rental Service. 

The textbooks depreciate 10 percent each time they're used until they hit 50 percent. Each semester, the department starts a sales period where students can purchase their rented books. 

Because of the depreciation, they may buy a book at half price. If graduate students want to purchase a book, they receive a renting fee refund. 

Last year, the department moved to a new building that students voted for. $1 of their per-unit fee goes to the new building, and the rest goes toward operational costs. In this facility, the university started using radio frequency technology identification. Each of the over 200,000 volumes have a tag in them. 

When students come in, they go to a self-service station and enter their campus ID or personal number. The system knows what books they need and gives them a list.

Students pick up their books from the shelves, place them on a scanner and check them in or out. They receive their receipt after they've paid the fees with their campus ID or personal number. The whole process of getting the list, picking up books and checking them out takes 10 to 15 minutes. 

The department used to have quite a few students who didn't return books. But since Miller increased the rate of late fines, less than 5 percent of students don't return their books. She has an automatic billing system in place that charges students late fines on their student bill. 

In the old building, the department used a paper and pencil system, so moving to radio frequency was quite challenging. But they learned along the way.   

And the move to the new system has students excited. In fall 2010 and 2011, the department sent out 3,000 surveys to students. After the system debuted in summer 2010, 146 students completed responses in fall 2010 and said they were 98 percent satisfied with it. This fall, a much higher number of students responded — 399 — and 92.8 percent were satisfied. 

The department has an inventory of just over $8 million worth of books now. Because of the cost of textbooks, building a full-scale textbook rental with an inventory for every course is probably cost-prohibitive for universities, Miller said. 

"But I think that with the high rate of satisfaction that we have and just the students' overall opinion, it is worth looking into, and I really believe that there are ways that it can be done, even if you start on a small scale and work your way up."

Chaffey College meets student demand for lower prices

Chaffey College did start on a small scale and worked its way up three years ago. The college owns Chaffey College Bookstore, though the bookstore operates semi-independently as a separate 501c3 non-profit organization, Ceja said. 

The Associated Students of Chaffey College subsidized a textbook rental program in 2009 that succeeded. But the bookstore hit the limits of its own resources. So it started working with wholesalers. It reached the limit of the wholesalers' resources. So Ceja's team spent six months in serious discussions with different vendors. 

Many of the companies they considered at the time had a lot of up-front costs and didn't have an information rental program. And many of them didn't give stores the option of having an in-store rental program alongside the online one. 

Chaffey College students made it clear that they wanted to come into the store. They didn't want to have to wait a week and hope they get the right book after ordering online, Ceja said. 

BookRenter, which they ultimately chose, was interested in collaborating with the bookstore, did have an information rental program and did provide the option of both in-store and online rentals. 

The college continued doing the Associated Students program and phased out the wholesale program after partnering with BookRenter in summer 2010. The company makes revenue share payments to the bookstore based on rental transactions. 

That was a scary move for Ceja, his team and the bookstore employees because they had so many delivery platforms to deal with. But they wanted to respond to the needs of their students. 

"We're not going to get anywhere by sitting on our hands and not making these options available," Ceja said. "We're not serving our students if we don't pursue these types of things and have them out there."
 

2 ways Auburn University Bookstore cuts costs for students

The 25,000 students at Auburn University have seen textbook prices increase by 10 percent each year for the past few years, Weldon said. And the bookstore wasn't comfortable with how fast prices were escalating. 

Part of that escalation came from the bookstore's used book practices. Typically, bookstores offer to buy back books from students at a flat 50 percent of the new cost. That flat rate didn't take into account the age of the book. 

When they sell the books, they base the prices on publisher price increases, which consistently go up. So a book published in 1978 may be falling apart, but might cost $176 used. 

That model didn't make sense to Weldon or students. 

"We were almost, by our complacency, contributing to the way that book prices were going up on campus," Weldon said. "So we broke our pricing model with traditional college bookstore pricing two years ago and started buying everything that we bought back from our students at a fair value." 

The bookstore took into account the age of the book and what students would receive on Amazon if they sold their used books to other students. Instead of pricing used books at $100 or more, the bookstore sells them for $30. 

Along with the pricing campaign, the bookstore started renting textbooks through BookRenter. Until a few years ago, textbook rental was a good idea, but untouchable based on the way campuses were set up, Weldon said. 

In order for the financial model to work, bookstores would have to ask faculty to use the book for at least two years. And market factors also played a role in the viability of the model. 

Rental options became more doable about the time that the bookstore started its pricing campaign. It was a big deal for the bookstore to put its name on a service and let someone else's customer service establish the standard, Weldon said. But students really like renting books that are 50 to 80 percent less expensive than purchasing new books. 

Part of the challenge it's faced is getting the message about the textbook rental service out to students. Because books are so expensive, students hesitate. And they don't understand that they can write and highlight in the books just as they would if they bought them.

Another traditional barrier is the reluctance to adopt new technology on campus. Through BookRenter's marketing and the bookstore's sister campaign to talk to students about how rentals work, they're fighting through these barriers with accurate information.

Rental market grows at two colleges

Now textbook rentals make up about 6 percent of units sold at the Auburn University Bookstore. 

"Even though that number is still a little bit low here, it's growing like wildfire," Weldon said. "You could not put anything else in that category that would even come close to what's growing in textbooks and where the interest is." 

This fall, the numbers have grown even more at Chaffey College. From fall 2010 to 2011, rental unit sales went from 9 percent to 23 percent. At the same time, new and used book unit sales dropped from 91 percent to 76 percent. And eBook sales made up less than one percent of sales in both years. 

In-store rentals have proved more popular for Chaffey students. So far this fall, the bookstore has 4,476 in-store rentals compared to 2,504 online rentals, Ceja said. 

"It's really helped us capture students that otherwise may not have bought the book or would have tried to just use the one in the library on reserve or would have possibly gone to a online source like Amazon." 

With BookRenter's help, Auburn University Bookstore has turned rental into the greatest opportunity it's had in the last two years. No matter what size store colleges have, they need to become competitive with rental, Weldon advised. 

"The business is being challenged in a lot of different ways, and to view rental as a challenge or a threat is exactly the wrong way to go about it." 

Instead, it complements the bookstore's mission and goals, as well as provides opportunities to provide students with lower cost alternatives to high-priced textbooks. 

"If you don't have a rental component in your business, you're going to miss out on a lot of what your students are wanting."