Columbia House

About Columbia House

Columbia House operates a music and DVD club, and as such is a direct seller of DVD movies and box sets, offering its selections through “club membership” agreements.

Membership constitutes an agreement whereby the customer agrees to purchase a minimum number of movies at regular list price. To join, or enter a legal obligation, the customer agrees to purchase one discounted movie at the beginning, which is sent out as part of a "welcome package". Over the term of the agreement the minimum number of list price movies must be bought. 21 times per year, the company informs each customer of the "Director's Selection" movie. The customer is asked to respond within 10 days whether or not he or she wants to buy this movie, which is offered at a discount provided that the response is received by Columbia House within the specified time. Failure to respond results in having that movie shipped at full list price. If the customer responds negatively but in time, the idea is that the movie is not sent or charged to the customer's account. Director's Selection movie purchases do not deplete the obligation to purchase 4 list price movies during the term of the agreement, regardless of the price paid for any Director's Selection movie. In specified circumstances, "memberships" are available, whereby the customer is not required to respond to Director Selection mailings unless he or she wants to buy the movie. When such memberships expire, the old rules return where a response is required in time to prevent shipping of full price movies without customer input. Customers are not reminded when those rules change. The customer also has access to a large variety of other movies, which are advertised by mail and online towards the customer. Only full price purchases deplete that minimum purchase obligation. Purchases are not cumulative, meaning that two movies bought at ten dollars each do not deplete the minimum list price movie purchases by one movie. If the minimum number of movies has not been purchased by the end of the term, the monetary worth of those movies is charged to the customers' accounts. If any purchases have been made using Columbia House's point of sale device, either credit cards or debit cards linked to credit card accounts, then those accounts are automatically debited without further notice to the customer. Likewise, backordered movies are automatically debited to those accounts when they become available, without further notification to the customers. Failure to clear such purchases result in collections efforts by Columbia House against the customers.

Columbia House offers a point system, where movies bought result in “points” or “Fun Cash” (“Dividend Dollars” was the term used when the movies came in VHS format, which is no longer the case). Fun Cash does not transfer from one subscription to another. There are a number of restrictions to the use of Fun Cash, which generally make regular re-enrollment a lower cost and more tangible option for those interested in savings.