Gym fitness card supervision regulations

The core function of the "Gym Fitness Card Supervision Regulations" is to directly hit the three major high-frequency complaint pain points of the fitness industry, namely, "withdrawal of money, card withdrawal disputes, and false propaganda" through the three major rules of third-party custody of prepaid funds, legal card withdrawal boundaries, and merchant credit rating restrictions. It will neither set too high a threshold for the normal operation of merchants nor provide a cover for consumers' malicious rights protection. In essence, it draws a clear red line of rights and responsibilities for buyers and sellers of fitness services.

Last month, a community gym chain that had been open for three years downstairs suddenly posted a transfer notice. More than 20 members with two- and three-year membership cards blocked the front desk and asked for refunds. The boss said, "The debt has been transferred to the new shareholder," and he couldn't be contacted. Before 2022, mediation of such disputes will take at least a month, and the money may not be recovered. This time, the regulatory authorities came to check the registered prepaid fund supervision account, directly transferred the 20% risk reserve remaining in the account, and refunded the remaining card fees to eligible members in three days.

When the regulations were first solicited for opinions, there was a lot of quarrel in the industry. Many owners of small studios and start-up gyms complained: rent originally accounts for more than 60% of revenue, and at least 10% of prepaid card income must be deposited in a third-party supervision account and cannot be moved, which is equivalent to directly cutting off a piece of working capital. Especially for new stores, they rely on pre-sale money to cover decoration costs. This supervision is like a bottleneck at the beginning. Many people complain, "This is forcing small businesses to increase prices, or even prevent them from continuing."

The regulators’ considerations are also clear: In 2023, the national 12315 platform received more than 210,000 complaints about fitness prepaid cards, a year-on-year increase of 47%. The total amount involved in the cases involving fraudulent merchants exceeded 1.2 billion yuan. Consumers were so scared that they did not dare to apply for long-term cards. In the end, the trust foundation of the entire industry collapsed, and there was really no food to eat.

Many people have a deep misunderstanding of the "7-day cooling off period" in the regulations, thinking that no matter what card they apply for, they can cancel it within 7 days. In fact, no, only long-term cards that are valid for more than one year and have not been opened for use are subject to the cooling-off period rules. Short-term consumer cards such as secondary cards, weekly cards, and monthly cards, as well as those who have opened cards, attended classes, and used equipment, cannot use the cooling-off period as a reason to cancel the card. I previously helped a friend handle a complaint. He went to a free trial class on the 10th day after applying for a two-year card. Later, he felt that the gym was too far from home and he wanted to leave. It did not meet the cooling-off period requirements. In the end, he negotiated with the merchant and deducted a 15% service fee before refunding the money.

Nowadays, the regulatory rules implemented in various places are actually divided into two schools. Shanghai adopts the path of "full deposit and write-off one by one". All the money spent by consumers to apply for the card is put into the supervision account. Only when you make a payment or take a private lesson, the merchant can withdraw the corresponding part of the money from the account. The advantage is that it completely eliminates the possibility of the merchant withdrawing the money and running away. The disadvantage is that the merchant's payment cycle is too long, and many small studios cannot handle it.； Places such as Beijing and Shenzhen follow a "proportional deposit and credit floating" model. Credit merchants who have been in business for three years and have no complaint records only need to deposit 10% of the deposit. Newly opened stores or merchants with a history of running away or complaining have to deposit 20%-30%. This is more flexible, but if the merchant maliciously misappropriates revenue, there is still a small probability of a funding gap. Academic circles are now also discussing whether to introduce a prepaid card insurance mechanism. Merchants pay a small amount of premiums to the insurance company. If there is a runaway, the insurance company will pay first. However, the premium pricing has not yet been agreed upon, and most small businesses are unwilling to bear this additional cost.

When I apply for a card now, I always ask, "Where is your prepaid funds supervision notice board?" If the front desk hesitates and can't get it, I won't dare to apply for the annual card even if it offers a 30% discount. After all, you are focusing on other people's single discounts, and they are looking at your principal. If you really run away, the cost of time-consuming rights protection is more expensive than the card fee. Market supervision bureaus in many places have now launched mini programs. Before applying for a card, you can scan the supervision code at the gym door and you can see the store's credit score and past complaint records. You can even apply for a card and sign an electronic contract directly on the platform. If there is a problem, you can complain with just one click, saving a lot of trouble.

Of course, this regulation is not omnipotent, and many detailed loopholes have been exposed in the past six months since its implementation. For example, a consumer previously moved a gym and the new address was 3 kilometers away from his home. He wanted to return his card. The merchant came up with a contract and said that "address changes of no more than 5 kilometers are not considered a breach of contract." The regulations did not clearly stipulate this situation. In the end, they made concessions and deducted 20% of the liquidated damages and returned the card. Now various places are gradually issuing implementation details to fill these holes.

In the final analysis, regulatory regulations are just basic rules. To make fitness consumption more worry-free, merchants should not always think about cutting leeks by pre-sales, and consumers should not apply for a five-year card on a whim - after all, when you apply for a card, you calculate how much it costs on average at a time, and the merchant calculates how many times you can come a year, right?