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GameFly and USPS are at odds, and could go to court

Video game rental service GameFly and the United States Postal Service (USPS) could be headed to court over accusations that USPS breaks thousands of game discs each year, and offers preferential treatment to Netflix and Blockbuster.

GameFly claims it sends 590,000 games to its subscribers each month and receives 510,000 of the games back.  Around one or two percent of the total games sent each month are reportedly broken by USPS.

Ars Technica estimates that GameFly could be losing up to $295,000 per month in broken video games, if each game costs $50 to replace and one percent of all games each month are broken.

The video game rental service filed an official complaint with the Postal Regulatory Commission, accusing USPS of discriminating against the company.

To help reduce the number of games damaged, GameFly wants USPS to manually sort all of the games -- rather than use the automated sorting system -- which inadvertently damages CDs.

GameFly also believes USPS favors Netflix and Blockbuster over its service, as both companies send out a larger amount of discs.

"Until recently, none of the larger-volume DVD rental companies offered video games," said GameFly in the complaint.  "On February 11, 2009, however, Blockbuster, which hitherto had offered only movie DVDs (which GameFly does not offer), announced that Blockbuster was expanding its DVD rental service to include video games in the second quarter of 2009. 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.”

The Postal Regulatory Commission has given USPS 30 days to file a response, and the PRC will decide whether to have a hearing or dismiss the case within 90 days.

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RE: Hmm...
By jimbojimbo on 4/27/2009 3:09:00 AM , Rating: 4
There is no separating out of discs. I worked for the USPS for a few years from the main processing centers to the local post office and these days a machine reads the address and sorts them in order of delivery for the carrier. When the carrier receives his mail, most of it is automatically sorted and ready to be delivered. There was and never would be deliberate manual processing by picking them out as you may think.

If you're a Netflix customer like I am, take a look at your envelope. If you see any markings midway down that appears like a scratch or pressure applied horizontally, that means a machine processed it. Why the hell do you think they put barcodes on them? So a person could read that and sort it?

RE: Hmm...
By TomZ on 4/27/2009 3:52:56 PM , Rating: 2
No, I think you're wrong. Actually, USPS has set up a parallel set of high quality machines across its entire automated network for Netflix, and another for Blockbuster. And in addition, they set up another set of low-quality machines leftover from the 1970's that routes Gamefly discs.

Just kidding. Not poking fun at you personally or your post; just pointing out the absurdity of Gamefly's claims.

Probably this is just a ploy for better negotiating power when it comes time for Gamefly to sign a new contract with USPS.

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