advertisement
advertisement
advertisement

Chains Using USPS Same-Day Service Face Sharp Cutoff

Written by Frank Hayes
November 28th, 2012

The U.S. Postal Service’s same-day delivery trial for retailers is scheduled to begin on December 12 in San Francisco, but the service will launch with major limitations, according to the regulatory filings that allow the USPS to do this at all. The most significant limit: Each retailer will be allowed to send only 200 packages per day.

The mail agency also won’t be allowed to do more than $50 million in business in the trial or expand it without more regulators’ approvals, which rules out a rapid ramp-up to other cities. The last thing same-day needs is a regulatory straitjacket—but that’s exactly what the USPS’ service and the chains that use it will be saddled with.

The USPS won’t say which eight to 10 retailers will be part of the trial, which has been unaccountably dubbed Metro Post. “We will be the service provider—it’ll be up to the retailers to advertise/market the product,” said USPS Spokesperson John Friess.

But according to filings from October and November, the trial—which is initially slated to run through January 2013—will be hobbled by strict limits on the geographic area involved (only a specified area of San Francisco) and regulator-mandated limits on when packages can be picked up from retailers (after 3:00 p.m.) and delivered (between 4:00 and 8:00 p.m.).

The filings also say pricing will be at least $2.70 per package (“greater than six times the basic tariff of $0.45”). But that’s actually in line with prices for same-day delivery competitors such as ebay, Amazon, Walmart and UPS.

What may be most aggravating is that the USPS is barred by law from “creating an unfair or inappropriate competitive advantage” for any retailer using the service. No competitive advantage? That’s the point of same-day delivery, isn’t it?

But in practical terms, it’s the lack of flexibility that will probably cause the most problems for the USPS trial, as well as for the retailers testing it. Those delivery hours, for example: USPS literally can’t do any deliveries before 4:00 p.m. without an additional OK from the Postal Regulatory Commission. If retailers discover there’s a demand for earlier deliveries, they’re out of luck.

The same is true of expansion beyond those specific San Francisco neighborhoods, or beyond 200 packages per day per retailer. If the service turns out to be popular—remember, it’s starting two weeks before Christmas—that limit could be blown out almost immediately. And it’s retailers who will have to explain to customers why their orders were eligible for same-day delivery 15 minutes ago but aren’t now.

And that explanation might have to be made face-to-face.


advertisement

Comments are closed.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.