GameFly Files USPS Complaint over Broken Discs, Claims Preferential Treatment for Competitor

Online game rental service and Shacknews parent company GameFly today filed a formal complaint against the United States Postal Service, alleging that the USPS provides competitor Blockbuster with preferential treatment to cut down on broken discs.

"GameFly is not the only mailer to experience significant DVD breakage rates on automated mail processing equipment," reads the filing. "In response...the Postal Service has adopted a practice of manually culling out the DVD mailers of two high-volume shippers of DVDs, Netflix and Blockbuster, for special processing."

The company said its request for manual processing "comparable" to that of the movie rental services was denied, which puts GameFly at a disadvantage as its "larger and longer established" rival Blockbuster plans to rent games by mail.

"Because of the preferential treatment given by the Postal Service, [Blockbuster] enjoys a substantial cost advantage in the distribution of its DVDs," added GameFly.

The company noted its numerous efforts to reduce in-transit disc breakage, including standard protectors and tests with larger mailers, but said that breakage still occurred, even though the Postal Service charged higher rates for First-Class Mail.

GameFly claims it currently experiences a "breakage rate" of approximately 1%.

Another issue, GameFly explained, are the "substantial rates" of discs lost in transit. However, the company added that the USPS has "made vigorous efforts to control the problem," including the arrests of 19 USPS employees alleged of theft.

GameFly had no comment about the complaint when contacted by Shacknews, with the United States Postal Service yet to respond to our inquiry.

From The Chatty
  • reply
    April 24, 2009 10:02 AM

    haha no comment

    how long till they pull the article :P

    • reply
      April 24, 2009 10:09 AM

      Why would they pull the article? It seems reasonable to me that if blockbuster and netflix get special sorting, then gamefly should have the same opportunity.

      • reply
        April 24, 2009 10:19 AM

        Agreed, this is their primary method of business; if the USPS has better methods of dealing with stuff like DVDs and discs, they should get the same treatment as Blockbuster and Netflix. If everything works out, the USPS will move Gamefly to that list, Gamefly will be appreciative of the service, and everyone else continues on their merry way.

        • reply
          April 24, 2009 2:30 PM

          And it seems GF is willing to pay more for the special handling. I don't see why it's a problem moving it over to that service.

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