While your gym can have policies that help protect you concerning money , your members have some of their own consumer protections that may backfire on you , regardless of any policies or practices you have in place . A chargeback through a credit card is one of them , which poses a difficulty for gyms just like it does for other types of businesses . Is there anything you can do ? Let ’ s take a look .
The Challenge of Chargebacks for Your Gym Chargebacks can happen when members pay their dues by credit card , resulting in the consumer taking back the money they previously paid to your gym . Basically , the term refers to the credit cardissuing bank reversing a payment as part of a dispute resolution from the consumer .
So , an example could be that your gym automatically charges a member ’ s credit card for the next month of membership , and then the consumer files a dispute regarding the payment with the credit card , perhaps giving a reason that they attempted to cancel the membership but were still charged the dues . Now you have a delinquent member account and the challenge of a chargeback .
If the bank decides in the consumer ’ s
favor , they can then reverse the payment , effectively taking the payment you received away from you and giving it back to the consumer ( your previous member ). The chargeback alone generally comes with a fee to your business ranging from $ 20 to $ 100 . If you get numerous chargebacks , the fee increases and you can face other consequences like fines or a canceled merchant account .
Do You Have Any Recourse ? It ’ s helpful to have a plan in place for how your gym will handle chargebacks . You don ’ t necessarily have to accept the lack of payment . You can try fighting the chargeback with the bank by providing your side of the story with supporting documentation . However , the process tends to go in the consumer ’ s favor , as businesses only win 21 percent of these disputes . In addition , the resolution process can take weeks or even months to resolve .
What else can you do ? The better method for a gym is to send people to collections when they fail to pay membership dues , even after a chargeback . This is an effective way for your business to earn the money you are owed and is more effective when the collections calls are coming from a legal office . Collections can help you retrieve the lost money in place of fighting the chargeback or if you have lost the dispute .
Since the collections process includes reporting on a person ’ s credit , it creates a consequence for consumers failing to pay and for demanding a chargeback from the credit card . By sharing your policy to send unpaid memberships to collections upfront , you may reduce the number of chargebacks you receive in the first place .
Turn to Collections in Response to Chargebacks Overall , chargebacks pose a challenge for every gym , and every business , for that matter . You can take steps to prevent them , such as through clear billing and communication processes , or to dispute them . But when these measures fail , the collections process provides an effective way to collect your owed dues . Using a collections call center that is specialized in fitness and that goes through a law office can maximize effectiveness .
This is what you can expect from Aldous & Associates . Our collections process can provide a deterrent to missed payments or chargebacks and is effective at collections when this step is needed .