[trimbo]

So basically this is the Columbia House[1] of shoes. That's not a scam, it's "a catch". When a consumer hears the pitch -- in the case of Columbia House, it was "get 8 CDs for 1 penny", in the case of JustFab it's "get any pair of shoes for $39" -- they should be asking what the catch is. An ungodly number of businesses involve catches to survive. How about cell phones? That new iPhone is only $200... but you have a 2 year contract and a $400 fee for leaving early.

Columbia House and the Columbia Record Club were around for 60 years. I doubt this model will ever go away or be deemed illegal.

[1] - http://en.wikipedia.org/wiki/Columbia_House

edit: hey, there's a wikipedia article about this model

http://en.wikipedia.org/wiki/Negative_option_billing

[tisme]

8 cds for a penny is ridiculous, so there has to be a catch. $39.95 for a pair of shoes sounds quite reasonable.

Having to pay for a membership without performance is ridiculous.

[tedunangst]

Columbia House was always upfront about the fact that your 8 CDs were merely the start of your membership, and they would send you a CD every month. If this site were at least sending you a pair of shoes you didn't want each month, you'd catch on a lot faster to the fact you're now part of a club.

[endianswap]

The difference, at least from my point of view, is that it is a realistic deal to find a pair of shoes for $39 dollars when I don't think it's reasonable to be able to buy X cds for a penny, for even X=1. The closer you get to the actual or expected value of what you're buying, the more unethical I feel it is, just because you're going to be tricking a greater number of people.

[ahoyhere]

If you bought into Columbia House in the 90s, as I did, the math worked out to ~$10 average for each CD over a year (the 8-for-a-penny plus the full-price ones), back when they were $16 each at the local store.

The promotional offer was an attention-catcher, but you still saved $4-6 per CD.

Just because you feel like "there must be a trick" doesn't mean there is a trick.

[antonej]

The cleverness of Columbia's approach was that a certain percentage of people at the margin would keep (and pay full price for) CDs that they'd never have bothered to go out any buy on their own. Just like credit cards: Issuers hate people who pay the balance off every month and earn them zero interest -- but most consumers aren't quite that disciplined.

[antonej]

The interesting question is whether the business model would be deemed illegal outright (highly unlikely). Under US law, at least, it's all about disclosure. False/misleading claims and deceptive business practices are usually what get companies in trouble. Those are subjective, to be sure.