GameFly Files Complaint Against USPS

Rent-by-mail video game company Gamefly has filed a complaint against the United States Postal Service alleging improper handling of mail and preferential treatment of larger competitors Netflix and Blockbuster.

According to the complaint, filed with the Postal Regulatory Commission, Gamefly mails 590,000 video games monthly, and between one and two percent of those games is broken in transit or stolen along the way. If you’re keeping score, at $50 per game that could be upwards of $600,000 lost in a month. (That’s assuming it’s two percent and game prices are $50 wholesale, which is doubtful.)
Gamefly
Upon realizing so many of its games weren’t making it through the delivery process, Gamefly and the Postal Service tested to see what was happening. Even after changing to sturdier mailers with special handling instructions with specific mail machines listed, Gamefly games were still broken in the process. Nineteen USPS employees were also arrested for theft.

According to the complaint, the investigation also found that competitors Blockbuster and Netflix DVDs were manually removed from bulk mail and not processed through machines. This led to the company’s allegations of discriminatory treatment. Gamefly says working to resolve the problem with the USPS has not been successful.

The rental by mail industry has boosted revenue for the USPS significantly in the age of email. One wonders for how long, though, considering the near future includes a shift to digital delivery and storage. In that respect, Gamefly’s, Netflix’, and Blockbuster’s business models are all in jeopardy unless they enter into the download market, which may well be dominated before their arrivals.

Regardless, the shift to digital delivery and service will eventually take care of the problem of discs broken in transit.

There are 13 Comments. Add Yours.

Ent Services
May 28, 2009 at 10:25 am

They have absolutely the right to feel that way. There seems to be favouritism in the way things has gone against them.
Neck Pain
May 28, 2009 at 11:27 am

Yes, they ought to do that. There’s no reason for USPS to be providing differential treatment of all companies.
Hotel Consultants
May 28, 2009 at 2:07 pm

I’m surprised that USPS is giving different level of support to different companies. Maybe they ought to have proper service level agreements.
Luxury Bali Villas
May 28, 2009 at 2:14 pm

I’m interested to see how this saga develops. I think GameFly probably has a strong case over here.
Massage Singapore
May 28, 2009 at 2:19 pm

The investigation is much needed in this scenario. The USPS cannot carry on doing the things they do in this manner.
SEO Singapore
June 2, 2009 at 12:57 pm

I am hopeful that Gamefly will get a fair trial. Hopefully there’s no lobbyist involved.
Shop Fittings
June 2, 2009 at 1:57 pm

It’s about time someone stood up to USPS.
Garment Racks
June 7, 2009 at 9:57 am

I am eager to see what prove Gamefly could present in court. Looks exciting. Eager anticipating either company spilling beans on their operations.
SlimQuick
June 9, 2009 at 3:51 pm

I hate it when I hear about bigger companies getting better treatement than smaller one. It’s not fair competition and make it hard for small businesses to grow or even survive. I hope Gamefly will be succesful in this case.
Home Options Trading
June 10, 2009 at 1:03 am

This is getting interesting by the minute. Regardless the outcome I think both the companies would not be working with each other again.
orthopaedicclinic.com.sg
February 17, 2010 at 5:20 am

Agreed.
????? ????
March 21, 2010 at 6:11 am

Very bad, this is a great loss to the games company, and a disappointment to the customers, gamefly is a big company, they must solve this issue ASAP with USPS.
Avenger9
April 11, 2011 at 9:56 pm

Mailed an overnight letter by USPS on Sunday to be delivered on Monday on a Business, 4 hours round trip from my home. USPS tried to deliver on Monday at 5 AM, didn’t find anybody, kidnapped my letter at theirs post office giving me 5 days to make 4 hours round trip to get back the letter or send back to me after 5 days. The letter was time sensitive and destination was a business, and BUSINESS HOURS ARE 0800 to 1630 or 0900 to 1700. What kind of dead brain sheep morons are USPS employee, going out of business hours, to make deliveries at Business at 1AM, 2AM, 3AM, 4AM 5AM and tell you that there was nobody. I do not care for $13.25 I paid. The damage they inflicted to me is much bigger. Government is doing nothing, they are looking other way. Next time I will drive 4 hours and deliver my letter by myself.