Gamefly files postal discrimination complaint

Share this article:

Online video game rental company Gamefly has filed a complaint against the US Postal Service claiming discriminatory practices against it.

The complaint, filed with the Postal Regulatory Commission, alleges that the Postal Service unduly discriminated against Gamefly.

According to the complaint, Gamefly video game DVDs break or become damaged at about a 2% rate when going through the postal system.

In an effort to stem this, the company asked the USPS to manually sort the discs instead of using an automated sorting system that has a tendency to damage discs.

Gamefly contends that the USPS provides this manual sorting for larger mailers of DVDs, such as Netflix and Blockbuster, but refused to do so for Gamefly.

“Until recently, none of the larger-volume DVD rental companies offered video games,” reads a portion of 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 USPS declined to comment on the matter.

PRC spokesman Norm Scherstrom said the USPS has 30 days to file a response. The PRC then has 90 days to review the case and determine whether to dismiss or hold a hearing.

GameFly said it currently mails approximately 590,000 DVDs to its subscribers per month, and receives approximately 510,000 DVDs in return mail from its subscribers per month.


Share this article:

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Direct Mail

Ricoh Strikes a Blow for Multichannel on a Small Scale

Ricoh Strikes a Blow for Multichannel on a ...

The company introduces a creative service to help print shops augment direct mail with email and pURL landing pages.

Delivered: Insurance Mailers

Delivered: Insurance Mailers

What's in our mailbox this month: Insurance mailers. See which ones cover all their bases—and which ones, not so much.

Marketing Challenge: Defending Direct

Marketing Challenge: Defending Direct

The new CEO wants to cut direct mail because of postal increases—even though DM is great for ROI. What would you do? Email your answers to ginger.conlon@dmnews.com by June 30 ...