Prepaid Gym Membership - Dispute?

[Anonymous]

I paid $1500 in full for a 12 month membership at my old gym. 6 weeks into the membership, it was shut down for Covid and remains closed today (nearly 4 months later.)

I no longer work or live in the area (but that's not really their problem, as I knew the prepaid membership was non-refundable upon purchasing it.)

Aside from my geographical situation, I paid for something that technically hasn't been available for use for nearly 4 months. They will add this time on to the end of my membership, but it doesn't help me out no longer being in the area.

Under normal circumstances, I could sell the membership to someone else and transfer it. But again, there isn't really anything to sell at the moment with the gym still being closed. Even when they do reopen, I'm going to be hard pressed to find someone wanting to start a gym routine so soon post pandemic.

I've been emailing with the gym asking them to meet me in the middle w/ a partial refund, but they've stated they cannot process any refunds until they reopen. They haven't confirmed that they would issue a refund of any sort, but said they would contact me when they reopen to further discuss.

I think I have potential grounds for a dispute but am terrified of the possibility that I get the money back from my bank and then the gym could send me to collections over this and wreck my carefully rebuilt credit. 

$1500 (or even a fraction of it) is a lot of money, but still not worth encountering any derogatory marks that would decimate my fragile post-BK credit.

Any suggestions here?

[blindambition]

I can't say what gym would do. I'd dispute while you have protection from card issuer. Save your email thread. It shows you tried to resolve. Not your issue that they aren't processing refunds. Someone could do that from home. My guess is they don't want to do refunds.

[RobertEG]

What type of dispute are you inquiring about, and with whom?

[Anonymous]

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@RobertEG wrote:

What type of dispute are you inquiring about, and with whom?

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I would be disputing the charge with my credit card issuer.

It was $1530.07 for a 12 month prepaid gym membership that I was only able to utilize for 1.5 months before the gym shut down due to the pandemic. The way I look it at, that comes out to my receiving only $191.26 worth of the services that I paid for (and not receiving $1338 worth.)

It is unknown when the gym will reopen. They will extend prepaid memberships by the length of time they were closed, but I no longer live in the area rendering this offer useless. They've indicated that they might work with me on a refund when they reopen but can't do it now.

[coldfusion]

This has been an ongoing issue for the last few months and at one point had generated considerable press in the Boston area when 1 chain was in direct violation of Massachusetts law.

Massachusetts and New York have laws in place that allow you to cancel a gym contract if the gym can't substantially maintain service. Your state may or may not have similar regulations. Even if not, try calling your state attorney general's office.

You can try requesting a chargeback and your issuer may give it to you as a goodwill gesture.

[Anonymous]

I don't know that I would get involved with disputing this through your credit card issuer. You indicated that you always knew that it was a non-refundable fee you were paying. Had there been no pandemic shutdown and you moved away, you wouldn't expect to receive a refund. Now, I realize that there is a pandemic shutdown, but that is not attributable to the gym. They have a system in place in which they will provide to you the full value of that for which you paid. The fact that you don't have a use for it or don't want it is not a reason to use the bank's dispute system as a means of obtaining a refund for an admittedly non-refundable product. As I understand it, disputing charges through the bank is a means of correcting fraudulent activity. This isn't fraudulent. I think your fear that they will take adverse action against you is legitimate because what you are talking about doing is an aggressive move that, if it worked, would result in the bank debiting the account of the business that owns the gym. I would expect collection activities, potentially a suit for breach of contract and other potential causes of action, etc. That is to say nothing of the fact that your bank's anti-fraud department may not care for the method you suggest. It seems to me that you've started the process for your best option. That is, reaching out to them in good will and in hope that under the circumstances they will act with good will. After all, you paid a year in advance and had an expectation that the year would end on date X. It stands to reason that regardless of the reason for the shutdown and regardless of the gym's willingness to extend the term of the contract to account for the time in shutdown, you did not contract for membership to date Y. It may even be that the contract doesn't have a provision for this circumstance. It may be it has a force majeure clause, but that its unilateral or poorly drafted (for which you as the non-drafting party would receive the benefit) such that it permits you to be relieved of your obligation or constitutes breach on their part. It may be that your polite request for a refund should in fact be demand for a necessary refund due to breach on the gym's part. Still, to use a back door like disputing the charge through your bank as though it is a fraudulent charge (which it is not) could leave you with unclean hands. This is all just my opinion of course. 

[coldfusion]

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@Anonymous wrote:

I don't know that I would get involved with disputing this through your credit card issuer. You indicated that you always knew that it was a non-refundable fee you were paying. Had there been no pandemic shutdown and you moved away, you wouldn't expect to receive a refund. Now, I realize that there is a pandemic shutdown, but that is not attributable to the gym. They have a system in place in which they will provide to you the full value of that for which you paid. The fact that you don't have a use for it or don't want it is not a reason to use the bank's dispute system as a means of obtaining a refund for an admittedly non-refundable product. As I understand it, disputing charges through the bank is a means of correcting fraudulent activity. This isn't fraudulent. I think your fear that they will take adverse action against you is legitimate because what you are talking about doing is an aggressive move that, if it worked, would result in the bank debiting the account of the business that owns the gym. I would expect collection activities, potentially a suit for breach of contract and other potential causes of action, etc. That is to say nothing of the fact that your bank's anti-fraud department may not care for the method you suggest. It seems to me that you've started the process for your best option. That is, reaching out to them in good will and in hope that under the circumstances they will act with good will. After all, you paid a year in advance and had an expectation that the year would end on date X. It stands to reason that regardless of the reason for the shutdown and regardless of the gym's willingness to extend the term of the contract to account for the time in shutdown, you did not contract for membership to date Y. It may even be that the contract doesn't have a provision for this circumstance. It may be it has a force majeure clause, but that its unilateral or poorly drafted (for which you as the non-drafting party would receive the benefit) such that it permits you to be relieved of your obligation or constitutes breach on their part. It may be that your polite request for a refund should in fact be demand for a necessary refund due to breach on the gym's part. Still, to use a back door like disputing the charge through your bank as though it is a fraudulent charge (which it is not) could leave you with unclean hands. This is all just my opinion of course. 

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https://www.nolo.com/legal-encyclopedia/do-i-have-to-pay-gym-membership-while-my-gym-is-temporarily-closed.html

[note - soft paywall.  You can click through and get 24 hrs of access]

https://www.msn.com/en-us/health/fitness/how-to-get-a-refund-if-your-gym-is-closed-during-coronavirus/ar-BB12dcvo

[Anonymous]

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@Anonymous wrote:

I don't know that I would get involved with disputing this through your credit card issuer. You indicated that you always knew that it was a non-refundable fee you were paying. Had there been no pandemic shutdown and you moved away, you wouldn't expect to receive a refund. Now, I realize that there is a pandemic shutdown, but that is not attributable to the gym. They have a system in place in which they will provide to you the full value of that for which you paid. The fact that you don't have a use for it or don't want it is not a reason to use the bank's dispute system as a means of obtaining a refund for an admittedly non-refundable product. As I understand it, disputing charges through the bank is a means of correcting fraudulent activity. This isn't fraudulent. I think your fear that they will take adverse action against you is legitimate because what you are talking about doing is an aggressive move that, if it worked, would result in the bank debiting the account of the business that owns the gym. I would expect collection activities, potentially a suit for breach of contract and other potential causes of action, etc. That is to say nothing of the fact that your bank's anti-fraud department may not care for the method you suggest. It seems to me that you've started the process for your best option. That is, reaching out to them in good will and in hope that under the circumstances they will act with good will. After all, you paid a year in advance and had an expectation that the year would end on date X. It stands to reason that regardless of the reason for the shutdown and regardless of the gym's willingness to extend the term of the contract to account for the time in shutdown, you did not contract for membership to date Y. It may even be that the contract doesn't have a provision for this circumstance. It may be it has a force majeure clause, but that its unilateral or poorly drafted (for which you as the non-drafting party would receive the benefit) such that it permits you to be relieved of your obligation or constitutes breach on their part. It may be that your polite request for a refund should in fact be demand for a necessary refund due to breach on the gym's part. Still, to use a back door like disputing the charge through your bank as though it is a fraudulent charge (which it is not) could leave you with unclean hands. This is all just my opinion of course. 

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This. I knew I was buying a contract valid through 1/31/2021. At the very least, I should be able to get a refund of the months the gym was closed (now 4 months and counting.) 

I'm just not happy with their approach of delaying this conversation until they open. It is quite feasible that this business isn't even going to survive. It's an independent gym in one of the most expensive metro areas in the country that hasn't seen any revenue for 4 months now. 

I wouldn't be disputing the charge as fraudulent. I'd be disputing it on the grounds of them being unable to provide a service that I paid for. 

While it's not their fault that they were forced to close due to the pandemic, I see that hardship as theirs and not mine. 

[lhcole77]

@Anonymous  I had a similar issue with a large gym on West Coast, but mine was month to month, and they kept charging us monthly dues even though State mandated closure. 

Many of us filed complaints with State Attorney General's consumer protection. 

That stirred up enough support in the press, and monthly dues were halted. 

I agree with previous post about State laws. Find out about yours. I also empathize with you not wanting to risk a hit to your credit. Definitely not a fun place to be in. 

Good luck! And I hope you're enjoying your new city. 

[ccquest]

I think the most likely outcome is going to be the gym extends everyone's membership by the period of closures. That's similar enough to what I'm doing to my customer's at work for their annual fee and nobody is complaining yet.

Since you already said you can resell it, just do that and move on although it might be a bit difficult under these circumstances obviously. I don't see how you're going to win a dispute when you acknowledged it was non-refundable and it isn't a recurring charge.

It might work through some sort of consumer protection route like suggested above or with enough pressure on social media.