Applescript giving error 1728 when checking if file exists
Try:

set dest_folder to POSIX path of dest_folder
set newFilepathPOSIX to dest_folder &amp; "video.mp4"

tell application "System Events" to exists file newFilepathPOSIX
if the result then
    display dialog "There is already a file named \"video.mp4\". Do you want to replace the file?" buttons {"Quit", "No", "Yes"} cancel button 1
    if button returned of the result = "No" then
        beep
        --Insert your code here
    end if
end if


EDIT

 set handPath to "/Volumes/Flash Drive/HandBrakeCLI"
set dest_folder to POSIX path of dest_folder
if text -1 of dest_folder ≠ "/" then set dest_folder to dest_folder &amp; "/"
set newFilepathPOSIX to dest_folder &amp; "video.mp4"

tell application "System Events" to exists newFilepathPOSIX
if the result then
    display dialog "There is already a file named \"video.mp4\". Do you want to replace the file?" buttons {"Quit", "No", "Yes"} cancel button 1
    if button returned of the result = "No" then set newFilepathPOSIX to dest_folder &amp; "video" &amp; getDateAsString(current date) &amp; ".mp4"
end if

set shellCommand to quoted form of handPath &amp; " -i " &amp; quoted form of origFilepathPOSIX &amp; " -o " &amp; quoted form of newFilepathPOSIX &amp; " --preset=\"Classic\""
do shell script shellCommand

on getDateAsString(myDate)
    set creationDateString to year of myDate as string
    set creationDateString to creationDateString &amp; text -2 thru -1 of ("0" &amp; (month of myDate as integer) as text)
    set creationDateString to creationDateString &amp; text -2 thru -1 of ("0" &amp; day of myDate as text)
    set creationDateString to creationDateString &amp; text -2 thru -1 of ("0" &amp; hours of myDate as text)
    set creationDateString to creationDateString &amp; text -2 thru -1 of ("0" &amp; minutes of myDate as text)
    set creationDateString to creationDateString &amp; text -2 thru -1 of ("0" &amp; seconds of myDate as text)
end getDateAsString