Post Office Fires A $1.5 Million Shot Across E-Tailers’ Bow

Written by Evan Schuman
November 11th, 2010

The U.S. Postal Service has fired what amounts to a $1.5 million shot across the HTML bow of E-tailers, in the form of a settlement with Amazon for supposedly shipping products using a discounted shipping rate that the “neither snow nor sleet” people thought Amazon shouldn’t have used. (By the way, do the carriers really want kudos for overcoming “the gloom of night”?)

In a settlement with Amazon (speaking of kudos, quite a few should go to TechFlash, which got the document released with a Freedom Of Information Act request), the anti-dog folk said that Amazon had ripped them off for about three years (from January 2006 through January 2009) because “Amazon improperly mailed products, mainly from what Amazon described as its ‘video game’ category, at Media Mail rates. Amazon disclosed a specific list of products mailed at the Media Mail rate. The Postal Service maintains that certain of those products did not qualify for the rate.”

Amazon agreed to wire $1.544 million to the Post Office, although it didn’t say it did anything wrong. Of course it wasn’t an admission of guilt. Think of it as a million-dollar holiday gift for the E-tailer’s carrier.

Postal spokespeople declined to elaborate and specifically refused to say what exactly Amazon supposedly did wrong.

The Media Mail rules are that the service is only for “sending small and large packages consisting of books, film, manuscripts, sound recordings, video tapes and computer-readable media (such as CDs, DVDs, and diskettes).” The Post Office requires these shipments to weigh less than 70 pounds, and each package can be “no more than 108 inches in combined length and girth.” Such shipments also cannot contain advertising, according the Postal Service’s rules.

When pushed on whether Amazon was accused of using Media Mail to send inappropriate items or those that weighed too much or were too long, Postal spokespeople declined to answer.

The takeaway for retailers is clear, though. The Post Office is in a bad place these days, with E-mail attachments killing much revenue and FedEx and other carriers nibbling away at what’s left.

E-Commerce shipments are one of the last hopes, so the Postal Service wants to be explicit that it will enforce its rules strictly. Presumably, this tactic is to pressure retailers to be careful for fear of lawsuits.

But will it backfire? This less-than-friendly approach is the precise one that other carriers want the snailmail folk to take. Well, that and “please do kill Saturday deliveries.”

With that combo, retailers may be pushed farther away from the postal folk. To paraphrase both JFK and UPS: “Ask not what Brown can do for you. Ask what the Post Office can do for Brown.”


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