Shacknews. The company claims that the USPS has "adopted a practice of manually culling out the DVD mailers of two high-volume shippers of DVDs, Netflix and Blockbuster, for special processing." The company states that when it requested the same treatment that it was denied.
GameFly stated that in-transit breakage -- which it claims is about 1% -- still occur, despite the company's efforts to reduce that by using cardboard protectors and "tests with larger mailers." The company has also experienced "substantial rates" of disc theft, but the USPS has cracked down on that, with the arrest of 19 USPS employees. GameFly even changed its mailer color from bright orange to a very plain white years ago to reduce theft.
When approached by Joystiq regarding the situation, GameFly responded with "no comment."