Sunday, December 2, 2007

DVD mail rental companies like Netflix cost taxpayers millions says U.S.P.S.

We all have heard of Netflix. It is a DVD by mail rental company that for a flat fee will deliver movies directly to your home. In order to economically be able to do this it had to set up an arrangement with the United States Postal Service that basically charges them a flat fee to deliver DVD's to its customers through the mail. The problem is that the flat fee they are charged does not cover the costs the United States Postal Service incurs to deliver those dvd's and so the taxpayers have been covering the difference.
The problem is the size of the envelopes. The size of a DVD is what it is and it has to be placed in a package or envelope that can accommodate it. These envelopes are too unusual in size to be sorted by machines at the U.S.P.S. and so an additional cost is incurred when they have to be sorted by hand by postal service workers. In a report issued by Tammy L. Whitcomb, who is the Deputy assistant Inspector General for revenue and systems, Auditors at the U.S.P.S. state that "Because these mail pieces are not machinable, the Postal Service pays significant additional labor costs to manually process them." Currently they estimate that it is costing in the neighborhood of 20 million dollars a year and they project that by the year 2009 it will top 30 million to sort and deliver these DVD's. Your taxpayer dollars hard at work again.

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