After reading other customer reviews I decided to set the record straight regarding the reduction in size.
The size reported of 16GB is the total unformatted size. Formatting is done as a simulated floopy disk style where a disk has tracks and sectors. Each track has formatting information as do each sector. Each disk also uses a sector for telling the OS how the disk is structured, how much space is on it and how many sectors are used per file block. Then there are all the sectors used to tell the OS where all the files start and where the parts of the files are stored on the disk. The file storage data is also duplicated!
All this information needs actual physical data space too. So with a 16GB drive, all this formatting data and OS system data takes up the 1.2GB that users see as missing from the 16GB specified.
Flash drive manufacturers use the correct method for calculating the overall size based on binary (base 2 maths). So 16GB is 16x1024MB, 1MB = 1024KB etc.
Unfortunately, harddisk (HD) manufacturers use the misleading 1GB = 1000MB etc. which makes the size of the HD seem higher than it actually is, so you generally see a bigger drop in size once a HD is formatted because the OS reports the size based on 1GB = 1024MB etc.
I hope this clears up any misunderstanding.