Covid-19 lockdown raises gym fees conundrum
I’d love to know what percentage of gym members seldom, if ever, use the memberships they are legally obliged to keep paying for every month until the contract period ends.
I’ve never been able to get that statistic out of a fitness club, but based on anecdotal evidence, I imagine it’s quite significant.
So even when gyms are open for business, a lot of those who are paying to frequent them hardly ever do, for a variety of reasons. I’m pretty sure their business models are built around that non-attendance.
But can a gym keep debiting its members when there is no way they can work out in any of its clubs, even if they want to?
Consumer Goods & Services ombudsman Magauta Mphahlele says that, according to the Consumer Protection Act, a consumer is entitled to a full refund of services paid for but not received.
Companies do have a legal “out” if they offered a customer a reasonable alternative, such as a voucher, postponement or free months’ training, but the consumer was “unreasonable” in refusing that alternative.
“We have advised that this should be dealt with on a case-by-case basis as the circumstances of consumers are different,” Mphahlele said.
“We cannot avoid the sad fact that some suppliers are experiencing massive cash-flow problems, but this should not be an excuse to contravene the CPA.”
Much to the relief and gratitude of their members, Virgin Active, Planet Fitness and Viva Gym — and perhaps others — have chosen not to debit their members at all while their gyms are forced to remain shut.
They are no doubt taking a massive hit, but earning lots of priceless goodwill from their members in the process.
Many other medium-sized chains and standalone gyms have opted to continue debiting their members in full, offering to “compensate” them by adding the no-gym lockdown months to the end of their memberships or upgrading their membership in some way.
But that’s not helping those who have dramatically reduced or no income right now and are battling to pay their bond or rent.
To continue to debit full fees, be it for school, extramural activities, gym or any other service which is not being supplied, when most of your customers do not have the benefit of their usual income, is totally unjustified, in my view.
At worst, a reduced fee should be charged, so that both parties take a loss during a crisis which is not of either of their making.
In fact, charging in full when you’re not providing a service has an element of enrichment to it — yes, rent and salaries must still be paid, but water and electricity consumption is dramatically reduced.
Some gym members’ bank accounts have been left so bare by the lockdown that their gym fee debit orders are not being met, and they are then hit with whopping bank penalty fees.
In the case of companies continuing to debit their customers or refusing refunds on the basis that their contracts include a force majeure clause, Mphahlele said: “Those contracts would have to be tested against the provisions of section 48 of the CPA”.
That section states that contract terms must be fair, just and reasonable.
Isaiah told me: “I have a contract with SBK gym in Evaton. My problem is that they still debit the amount of money to pay for the gym but it is lockdown. I tried to call them and no-one answered.
“So now I don’t know what to do because I am being made to pay for something I cannot use.”
Other members have expressed similar sentiments on SBK’s Facebook page.
SBK’s owners have posted this Facebook message: “We understand the current frustrations you experience regarding payments while the gyms are closed.
“We rely on all our members to pay their payments as the gyms has to continue to pay staff and landlords, to ensure that the gyms will be able to continue once we are allowed to open, and therefore we have put together the following measures and relief packages.”
They are offering members who have been paying in full via debit order a 20% discount on their fees when gyms reopen — “permanently”. And a 20% reduction on arrears for those who have fallen behind in payments.
Cold comfort, no doubt, for those who know that other gym groups have stopped payments altogether while their gyms are closed.
Companies which are helping themselves via debit order to full payment for services not being offered should at least continue to provide a means for individual members to engage with them during this time.
Cutting all direct communications is not justified, given the available technology, and it’s definitely no way to treat your customers.
So can gym members approach their banks to reverse a debit order for non-delivery of service?
I asked ombud Magauta Mphahele about that and she referred me to the Payments Association SA (Pasa).
A Pasa spokesperson shared with me the organisation’s Covid-19 related advice, which is essentially to keep meeting your debit order obligations and contact your bank or service provider if you can’t.
That assumes that the payment is still legitimately owed, say for your clothing account.
But an agreement is binding on both parties — the supplier must supply the service in terms of the contract, and the consumer must pay the agreed amount.
So if it follows that if the supplier is not supplying, it’s unfair to expect the consumer to keep paying, in full.
“Unfortunately this is not [a scenario] that Pasa can resolve,” the spokesperson said. “Our recommendation would be for consumers and users to engage each other directly for resolutions.”
• The Consumer Protection Act allows consumers to cancel fixed-term contracts, such as gym contracts, by giving one month’s written notice, but the company is entitled to charge a “reasonable” cancellation penalty.
Fitness clubs’ penalties range from 30% to 80% of fees payable for the remainder of members’ contracts.
To my mind, given the circumstances, those who want to cancel should be able to do so for little or no penalty, especially if they’ve been paying full fees for the past two months, for no service.
How gyms are treating their members, in all respects, during this time is a very good indication of their customer service ethos; something which consumers would do well to bear in mind when choosing which gym to support in future.