Disney is offering refunds to millions of parents who bought its Baby Einstein educational DVDs for toddlers, following claims they may do more harm than good.
The range of DVDs cost about £18 each and are popular with parents keen to boost their toddlers' IQs ahead of starting school.
But various studies have questioned whether they provide any benefits - and some have concluded they may actually harm development.
Now, following threatened legal action in the U.S., Disney has agreed to refund DVDs or exchange them for other products in the range.
The pledge applies only to North America but British campaigners are calling for a similar deal for parents in the UK.
Pippa Smith, founder of lobby group Mediamarch, said: 'Anybody who has these videos in the UK should be given equal treatment and be able to demand a refund too. Parents are given the idea that these DVDs are educational but there is evidence to show that screenbased activity is bad for the brain.'
One recent study found children who watched educational DVDs between the ages of seven months and 16 months knew fewer words and phrases than their peers. Each hour they watched per day equated to six fewer words in their vocabulary.
Disney dropped the word 'educational' from its Baby Einstein marketing in 2006.
Now, faced with the threat of a law suit brought by the Boston-based Campaign for a Commercial-Free Childhood, it has agreed to refund dissatisfied parents.
'We believe that this is an acknowledgement that the baby videos are not educational,' said Susan Linn, a psychologist and director of the campaign.
Disney said the move was merely an extension of an existing refund policy.
Susan McLain, of the Baby Einstein Company, a Disney subsidiary, said the willingness to offer refunds to unhappy customers showed the 'strongest possible confidence' in the product.
But Dr Aric Sigman, a leading psychologist and a fellow of the Royal Society of Medicine, told the Sunday Telegraph: 'This is a really important, symbolic act by a multi-national company.
'It shows what many of us have been saying for a long time, that the virtual life cannot beat real life when it comes to language acquisition in children.
'There is a tremendous amount of money in convincing middle-class parents that virtual means of coaching their infants and toddlers to speak are vastly superior to Mother Nature. This action has finally put paid to that.'