Plus interest
replyPlus interest makes no sense and is unnessary. Adjusting for inflation is so the person can buy the same movie at today's prices. At that point, the person is made more than whole already because they got to see the movie for free and they can chose to get it again.
replyIf they are able to prove it somehow transparently that movie was watched at least once, reduce the amount of renting it based on the time when it was bought. Is that fair? Return the rest with inflation adjustments.
replyNo it’s not fair.
replyThey've stolen the property. It’s not “fair” if you replace it, let alone only replace it as “it was second hand”.
The interest and inflation are the time value of money, which you pay, for the time value of access.
replyOriginal-price refund is both simple, and (by linking the time-value of money for both parties) fair.