One Year Later, USPS Looks Into Gamefly Complaint
Last April, we discussed news that video game rental service GameFly had complained to the USPS that a large quantity of their game discs were broken in transit, accusing the postal service of giving preferential treatment to more traditional DVD rental companies like Netflix. Now, just over a year later, an anonymous reader sends word that the USPS has responded with a detailed inquiry into GameFly's situation (PDF). The inquiry's 46 questions (many of which are multi-part) cover just about everything you could imagine concerning GameFly's distribution methods. Most of them are simple, yet painstaking, in a way only government agencies can manage. Here are a few of them:
"What threshold does GameFly consider to be an acceptable loss/theft rate? Please provide the research that determined this rate. ... What is the transportation cost incurred by GameFly to transport its mail from each GameFly distribution center to the postal facility used by that distribution center? ... Please describe the total cost that GameFly would incur if it expanded its distribution network to sixty or one hundred twenty locations. In your answer, please itemize costs separately. ... Does the age of a gaming DVD or the number of times played have more effect on the average life cycle of a gaming DVD?"
Am I the only one that's seeing the PDF crash Foxit Reader somehow?
Is it me, or is GameFly being dicked around?
Some of the questions look valid, but others are completely obtuse and look like they are designed to waste GameFly's time and resources, not resolve the problem.
funny since gamefly's disks are wrapped in rigid cardboard and much more secure than netflix...
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Welcome to the world of lawyers, where it doesn't matter who is right and who is wrong, but who is in a position to be a bigger pain in the neck. This is a discovery document for the defense of USPS, not a response to an inquiry. They probably won't be issuing a response.
The USPS lawyers (in the odd world of legal ethics) probably concluded that the "right" thing to do is to pressure Gamefly to settle and admit no wrongdoing by USPS. I'm sure there are good reasons for USPS to not actually put out a public report detailing what their definition of acceptable mail handling is or how poor mail handling happens, but those are good reasons only for people who work for USPS.
Alot of the questions go to what effort did GameFly invest into research, planning and execution, of the shipping and return process.
Things from the material the mailer is produced from to simply how the dvd is secured inside the envelope to prevent shifting through the sorting process.
And the really big question, are you sure they really were "stolen" and not just kept.
I think pretty much all of the questions are valid and while written in legaleze, quite understandable given the severity of the complaint. If GameFly worked with the USPS in planning the mailing portion of their service and co-operated in tracking down these "thefts" before filing this case, then they should have no problems answering every one of them honestly and fully.
The original complaint by gamefly seems kind of bizarre though. Why on earth would the USPS care who's sending the packages, much less "preferentially" treat "traditional DVD distribution companies"?
It sounds like if there is any issue, it's a technical one (since the problem seems to be with the interaction between the DVD packages and the USPS sorting machines), and thus detailed questions about how gamefly packages their DVDs, etc, are quite apropos.
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I am amazed at the sheer skill displayed by postal services in breaking CDROMs. Australia Post has broken the last couple I have mailed. The disc is in a paper sleeve glued to the inside of a 10mm thick A4 paper manual inside a heavy paper "Toughbag" envelope. The envelopes and manual arrive with no outward signs of distress but the CDROM has been broken cleanly in two. One went to the far side of the country, but the other only a few suburbs away.
You can grab a bare CD and bend it in half without physically breaking it... it takes compressive force on the fold before the CD shatters. How this happens in transit without damaging the containing envelopes beats me.
Patent litigation: A doctrine of Mutually Assured Destruction... in which everyone seems willing to push the button
As was pointed out in the older, related Slashdot article, the value of the game disks is most likely the primary reason Gamefly is experiencing so many "losses".
In regards to the USPS being "private", that's only partially true. I don't recall the USPS paying property tax, income tax, etc. Or do they?
On a related topic, UPS and FedEx delivery vehicles get ticketed all the time. Can USPS delivery vehicles be ticketed? -some people have told me that they can't, since they're exempt.
In regards to mail theft - that's an issue at all the major services, including USPS despite strict federal laws. Supposedly, some companies are so concerned theft by postal workers, they will purposely send much of their mail in such a way to avoid "problematic" USPS sorting centers.
Ron
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From the original complaint, the USPS apparently does treat them differently as far as machine handling... it would be interesting to see what happens.
The issue here is why does GameFly have to jump through hoops and spend alot more on packaging to survive automation even when the class of service they used allows for non-machine sorts, while the other companies get separated for special treatment.
I can't provide a citation, but I thought that Netflix had various special arrangements with the USPS due to their huge mail volume. Yes, I'm being vague because I don't remember specifics, but things like discounted rates and even possibly specialized delivery/pickup schedules from the Netflix distribution centers.
Dont worry, USPS is already on top of that
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...and start looking into what UPS/FedEx/DHL can offer.
"Careful! We don't want to learn from this!" -Calvin & Hobbes
I looked into the transfer route after the first few are missing.. Gamefly center -> receiving office -> transfer location 1 -> transfer location 2 -> local post office
The post office tried to tell me that is was AFTER the mail was delivered that the thefts happened. I had a PO Box... so that still tells me it is within the system they went missing.
When gamefly went to the current packaging, the missing disk numbers did drop back to 1 in 10 or so. but when they did go missing, I would not even get an envelope in the mail.
...is a word now?
I also enjoyed this gem:
I unconsciously started humming the theme from 'Brazil' as I was reading this little masterpiece.
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With something as high quality as this sort of thing, I simply can't imagine why FedEx, UPS, and a ton of other delivery service are pounding the USPS into the ground.
I can't provide a citation, but I thought that Netflix had various special arrangements with the USPS due to their huge mail volume. Yes, I'm being vague because I don't remember specifics, but things like discounted rates and even possibly specialized delivery/pickup schedules from the Netflix distribution centers.
Any business can get arrangement that if they have a high enough volume and meet certain addressing criteria on the envelopes. Unfortunately I can't find it on their website, but I know it's there somewhere.
INAL, but I think it could be a start of a legal issue in that, when the USPS is accepting a package to deliver and fails to do so in a magnitude of millions in "lost" mail and offering an extremely slow response. Beyond that, I would bet that if/when the question list is answered, no change will occur. Another point I hope either UPS or Fedex see is that there is a market for cheap "it-gets-there-when-it-gets-there" delivery which only the post office really offers now. I believe that if the people could send little packages like dvds/games for 2 bucks using fedex or UPS, the post office would go under since it's already so far in the red.
IIRC netflix doesn't get a volume discount, they may even pay a premium for hand sorting of their mail. I think the calculation was that it's cheaper to pay the USPS to hand sort DVDs shipped in paper than spend the money on packaging that can handle the standard automated process.
So let me get this straight, a struggling company, on the verge of being bankrupt is asking a huge customer, to evaluate the cost model of using other delivery methods other than themselves? Don't you think that a failing company would be bending over backwards to ensure high value clients have their high value parcels protected? Seems like these kind of letters and responses to big clients are the reasons why the USPS is failing.
The PO is its own worst enemy. From the $1.2B FSS debacle, (which the OIG said was a waste of time and the PO should scrap), to the processing machines that bend every piece of mail which goes thru them. Some mail is not made to be machineable in the manner of letters and postcards. Keys,license plates, pens, CDs, DVDs, 1/2 inch thick payment books, all come to mind. Sure, these should never be in letter sorting machines in the first place. But the PO in its zeal to make itself look good, will cram anything it can thru these machines to keep it's piece count high. The PO mismanagement is too stupid to consider that these things cause jams, stopping the machine, and lowering the piece count. I see broken dvds every day that go thru letter sorting machines at the PO. The feeders sometimes strip the dvd out of the envelope, sorting the empty envelope, leaving the dvd scratched, broken, or on the floor. CDs & DVDs are not made to be bent, but somehow this is Gamefly's fault. They should never be sorted as regular mail, but as packages. http://www.teterboro-online.com/news/news03/usps/dbcs.shtml
From the breakage issues I've had with FedEx, I avoid them at all costs, especially on international shipments. LCD's in original box+bubble, cracked. Other packages, gouged, dented, shredded, etc
With UPS, my stuff arrives on time, but if it's incoming (US->Canada) then they hold it ransom at the border for *massive* duties + taxes. The taxes I have no problem paying, those go to the government, but the processing fees from UPS can be $25+ on a $100 item. The funny thing about those fees? I recently had UPS screw up and quote me one price, then charge my card another. Apparently the fees are based on the declared *value* of the item, so when they converted USD-CAD it came up in a higher bracket. I'm sorry, but nailing the recipient with an extra fee when you KNEW what it would be based on the declared value should be fraud, that thing was already paid for shipping at the Postal Outlet, so you KNEW how much it should cost. But "oh, I've got this shiny package here, but you can't have it unless you pay our blood money" seems to be the prevalent attitude.
It's too bad that USPS is having such issues in the US, but it seems strange to me, as when shipping between Canada->US, they've continuously been the best option for me. In cases where it does get delayed for duties/etc, it's usually just the straight tax and maybe $5 for processing, and my packages have never arrived broken that I can remember. Not to mention that for a comparable price, USPS Priority gets here faster, whereas UPS sends the damn thing ground on what's probably a moped.
Such answers do not generally prejudice the outcome, but they would preclude GameFly from providing that data later to back up their case. The strategy is a bit of harassement but a lot of information gathering.
One fix to this would be for USPS to stop SHOVING my mailbox FULL with advertisements that they get paid to distribute, but I never once requested or signed up for!!!
I think the calculation was that it's cheaper to pay the USPS to hand sort DVDs shipped in paper than spend the money on packaging that can handle the standard automated process.
No wonder the post office is bankrupt! I wonder if Netflix could teach them something about building sorting machines.
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I think you have an extremely valid question here.
For most people, they'll rent a movie, watch it once, and return it.
For gamers, they'll rent a game, play it, like it, and possibly keep wanting to play it for a while. Rather buying it, they can just say "I never got it", and it's now considered lost in transit.
I've received quite a few disks from Netflix that were scratched beyond use. No big deal. Report the scratch so they'll toss it when they receive it. I haven't received any broken disks. CD's and DVD's are actually fairly hard to break. Take one and flex it til it breaks. Watch your eyes though. :) If I remember from the article correctly, they only have 3 distro centers, so it's perfectly possible that some employees at the local sorting station break them on purpose. I knew someone who worked as a sorter at a USPS distro center. He said they mistreated mail fairly regularly. If the label wasn't printed with a zip+4 zipcode, it would get tossed into a separate bin and processed last on the shift. If they were handwritten, and the address wasn't totally clear, even if it was just one possibly confusing letter, it got tossed into the bin to process later. That was regardless if the confusing letter would cause confusion (is that "main st", "maln st", or "ma1n st", and that zip only had a "main st").
That's not to say all USPS workers disregard priority of mail to suit their own personal agenda, it's just that some employees don't perform their tasks to the best interest of the customers. You get that anywhere.
I knew someone who worked for UPS (the commercial shipping company, not USPS). At their center, they handled domestic returns for a consumer electronics company (Linksys, if I remember correctly). Those boxes were tossed around because they received so many and they were annoying. Some people were careful to load the delivery trucks in the order they would be delivered in. Some people just loaded the delivery trucks as quickly as possible to make their work easier.
I know with FedEx, I once was receiving a small package. I saw the driver go by and I needed the package, so I went to the local distro center when they should have been arriving. I asked the person at the counter asked about my package, as it was marked as being on the truck for delivery. Rather than putting my small package on their small package shelf, it was just thrown in the truck, and ended up behind a large box on the floor. It took them 20 minutes to find it on the truck, since it wasn't where it should have been. It helped that I was patient, and described the size of the package so they knew it was small, so it must have ended up somewhere in the truck. He hadn't stopped at my place, because he didn't see it in the truck, so he assumed I had already collected it from the distro center before he left.
I've had a lot of stuff shipped. Most of it makes it through fine. I got a large box with 3 servers in it once, where it was obvious that a forklift had run through the side of it. A couple boxes with monitors shipped at the same time got to their destinations absolutely destroyed. Since they were on different sides of the country, I have to assume it happened at the local center. At least they weren't expensive. I sold them on eBay, and just absorbed the expense.
Serious? Seriousness is well above my pay grade.
"Every" is a great word- a complete logical concept neatly packaged for consumption in a single word. . The same for "Each".
Netflix has employed an ex-Post Master General. They also have their own special lines at distribution centers. They send a significant amount more disks than GameFly or any other service - but the main reason is they simply hired a guy that knew all the right people to talk to to get their discs handled properly. They worked the system from the top down. GameFly could also hire an ex-Post Master General and do the same thing. :) After all in business, it's mostly about who you know.
Also, netflix sends people to each post office, every single day, to pick up the netflix return discs. The reasoning is it's cheaper to pick them up instead of letting them run through the sorting process (that's what breaks the discs, going around the sorter bends).
Netflix additionally purchases Movies in bulk, they are special Netflix editions. They come with no boxes or cases, simply a spool of dvds. The Game Industry is not setup the same as the movie industry and aren't setup for this kind of service. Netflix also has a royalty system with the movie industry, again the Game Industry is not setup for that. So netflix pays $1.50 a movie for the dvd, and then pays royalties per rental. They can have a disk break after 4 rentals and still make a profit. GameFly has to buy games for normal distribution cost, $10 to $30. They incure much more loss when a disk breaks - and they all eventually break - it should be a part of their pricing strategy.
A DVD costs what? Like $12 to $20? Games these days are $50 to $60. I imagine the theft rate would be a lot higher for their products.
And as far as the USPS response, I think the summary is fairly stupid blaming it on government employees. This is lawyer speak...and it is the same for the USPS as it is for any other corporation. But Slashdot sure hates the government, so let's feed in to that.
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Gamefly's mailer is much, much more durable than the current Netflix one. I suspect part of it is that Gamefly caters to a different customer base, one who is more likely claim a game lost and keep it, and that's magnified by the fact it's a $50-60 game instead of a $10-15 movie.
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