Gamefly Asks PRC To Speed Up Decision In USPS Preferential Treatment To Netflix Case

In April 2009 Gamefly filed a complaint with the Postal Regulatory Commission stating that Netflix & Blockbuster envelopes were getting preferential treatment from USPS.

Larry J. Belair, USPS senior plant manager in San Diego said in a 2010 filing to PRC:

Both Blockbuster and GameFly utilize Business Reply Mail for their return mail pieces, which requires an accounting step to assess postage due fees; while Netflix utilizes Permit Reply mail where return postage is prepaid and the postage due assessment step is not required..

Gamefly claimed that this problem cost them a lot of money as their discs are breaking at a higher rate than Netflix and Blockbuster mailers, and Gamefly games are being stolen.

Gamefly’s letter to the Postal Regulatory Commission:

Dear Chairman Goldway and Presiding Officer Blair:

I am writing to you to request that the Commission do what it can to expedite its
decision in the GameFly complaint proceeding. GameFly filed this complaint nearly two
years ago. Before that, GameFly spent 18 months working with the Postal Service in an
attempt to resolve informally the issues on which the complaint was based.

I understand that the Commission has competing demands on its resources. Delay
in resolving the case, however, is costly to GameFly. At the company’s current volume of
approximately 1.2 million shipments per month, the difference between the two-ounce flats
rate of $1.05 that GameFly must pay to avoid automated letter processing for most of its
DVD mailers, and the one-ounce letter rate of $0.44 that Netflix pays to avoid automated
letter processing of return mailers, amounts to about $730,000. This amount represents
more than 100% of GameFly’s monthly net income in 2011.

Gamefly Letter To PRC