At our club, we only accept pre-authorized payments via direct deposit or credit card. The only roadblock in this equation is if this method of payment becomes compromised through a cancelled card, rejected withdrawal or non-sufficient funds (NSF).
Our clients choose between a contract and no-contract agreement; the no-contract option is more costly. It is our clients’ responsibility to make sure their monthly dues are received by the gym (unless of course the membership is paid upfront in full). ”
If a client’s monthly dues are rejected on the backend due to one of the situations mentioned above, we rely on our membership management system to pursue the missed payment. This external company has a dedicated staff that reaches out to our clients who have outstanding dues. This takes the job out of the hands of our staff members.
The management company makes phone calls and sends daily emails as a first point of action until clients have rectified their dues.
Our club charges $10 for every rejected monthly payment. In extreme cases, if fees are continually rejected and monthly dues are not rectified for long periods of time, invoices and collections notices are sent to the client in an effort to retrieve a lump sum of the missing dues. This kind of conclusion can affect a client’s credit score in the long run and also their relationship with our club and staff.
Adam “Maverick” Assenza
physical therapist, strength & conditioning coach, personal trainer
Maverick Performance Inc.
At Life Time Athletic, all of our payments are set up through credit cards. If a payment doesn’t draft, it shows as an outstanding payment on the member’s account. As they come into the club, we alert them to this. We try to be discreet because we understand that things happen to lots of people for various reasons. We try to draft payment again every seven days to see if it will go through.
Since these are credit card payments, there are no penalty charges applied by the credit card company to either side if a payment doesn’t go through. The payment just doesn’t run.
If the member doesn’t come into the club, we call members and let them know. They can pay through other means—debit, cheque, cash etc. Eventually, if the account is not paid we deny access to the club.
We have a team at our corporate office that handles all outstanding payments for 30-60 day non-paid accounts. They call the member to work out a payment plan. If we still do not receive payment at the end of 60 days, the account is terminated.
A member wanting to re-join after their membership has been terminated due to non-payment is required to pay a portion of their outstanding account before we sign them up again.
Life Time Athletic – Ajax, Ontario
Handling sensitive situations in an appropriate manner is crucial to maintaining a strong relationship with members. Dealing with NSF payments is a perfect example.
There are several reasons why a payment might be returned NSF. Regardless of the reason, we feel it’s important to approach the situation delicately and in a solution-oriented way.
When we receive notice of an NSF, we start by sending an email with a personal note indicating that we were unable to process the payment. Then we ask people to contact us if they have recently received a new credit card or have changed their banking information.
Quite often this email message is the first they have become aware of the situation, and people are surprised and caught off guard. An email allows members to respond in their own time, after checking their online banking or maybe getting an update from a spouse. A surprise phone call or face-to-face notification can catch people off guard, which may lead to awkward conversations, reactions or uncomfortable explanations.
This approach seems to work for us with the majority of our NSF situations corrected swiftly without conflict. The reason for the NSF is not as important to us as their intentions to provide payment and follow-up payments.
If we don’t receive a response to our email within 24 hours, we follow up with a phone call. Again, we approach the conversation empathically and by suggesting solutions, such as, “Can we take a credit card payment now over the phone?” or “Would you like to come into the club and pay today? When would be a good time?”
Our members seem to appreciate the softer solution-oriented approach opposed to a harder impersonal method.
general manager fitness and recreation services
Health Systems Group
We do get NSF payments each month, but perhaps only about three percent of all our credit card and direct debit transactions.
When a payment doesn’t go through, we really like to give members a chance to find out first from our front desk staff. We understand that most people at one point or another will have an issue with their credit card company or their bank. Over the past three or four years there has been a sharp increase in credit card fraud. Because of this members sometimes have their accounts frozen or cards cancelled and forget to let us know. Many don’t even know their cards have been cancelled until they try to use them.
I flag the check-in system so the staff can advise members personally that their payment has been returned. If after two weeks the member has not been into our facility, I send them a letter saying that their payment was returned and that I would appreciate it if they could take care of this as soon as possible. Most people call or come in within a day or two.
With these two steps, we generally have about 80 percent of NSF payments cleared before the next payment date. Those that aren’t cleared up are sent a second letter.
If a client has three consecutive declined payments, I cancel their membership and flag them in our check-in system so they are no longer able to receive credit terms with us. We welcome these people back, but all future memberships must be paid in full and the outstanding declined payments cleared up. This happens with only about 12 to 15 people per year.
When we speak to members about a declined payment, we make sure they know that it happens to pretty much everyone at some point or another and that they don’t need to worry about it. This understanding approach is always appreciated and helps make people want to take care of the situation immediately.