James Delahunty
26 Apr 2009 13:00
Gamefly, a Netflix-like rent-by-mail service specifically for video games, has filed a complaint with the Postal Regulatory Commission which accuses the United States Postal Service (USPS) of improper sorting, resulting in goods being damaged in transit. The service is useful for those who don't want to pay top dollar for new game titles. Like Netflix, subscribers choose a number of games to rent each month, keep them for as long as they like and then mail them back.
Gamefly calculated that it sends out 590,000 games and receives 510,000 games back from subscribers a month. It estimated that between 1% and 2% of the discs end up broken. "Testing by GameFly and Postal Service personnel has revealed that breakage occurs during the processing of DVD mailers on Postal Service automated mail processing equipment," Gamefly states.
While some discs can expected to be broken in transit, and some stolen (19 Postal Service employees have been arrested to date for stealing games), Gamefly goes on to accuse the USPS of providing a better service to other rent-by-mail services, including Netflix and Blockbuster. "On routine visits to multiple Postal Service facilities, GameFly's employees have observed that a large percentage of mail pieces from Netflix and Blockbuster are culled from the automated letter processing stream," the complaint states.
It continues: "GameFly has asked the Postal Service to give GameFly's DVD mailers processing on terms and conditions comparable to the terms and conditions offered to two larger DVD mailers, Blockbuster and Netflix. The Postal Service has not done so." Gamefly claims all attempts to solve the problems have failed, including using a protective insert in the standard-sized mailer, doubling the shipping cost.
Considering that Blockbuster is beginning to offer videogames in its own service, Gamefly says its preferential treatment from the postal service is damaging to fair competition. "As a result of this initiative, GameFly now faces direct competition from a rival that is larger and longer established and which, because of the preferential treatment given by the Postal Service, enjoys a substantial cost advantage in the distribution of its DVDs to consumers."