Overdue Payment Collections for Gyms and Fitness Studios

Last Updated on 9 October, 2024

Are you chasing clients down for overdue payments?

Whether it’s laziness or a lack of commitment, according to IHRSA, the Global Health & Fitness Association, 63% of gym memberships go completely unused. In addition, 50% of new signups stop hitting the gym or fitness center altogether after three months. Once clients stop attending sessions or classes, they often forget to update their credit cards or billing information and begin to miss monthly payments.

Intentional or not, when members aren’t paying their monthly gym and studio membership fees, it’s impacting your business’s bottom line and ability to grow and thrive.

Why are overdue payment collections a problem for gyms and fitness studios?

While one missed payment from a member here and there may not seem like a big deal, most gyms and fitness studios could face bigger problems when more members fail to pay.

With the average gym membership costing $50 per month and boutique studios charging $90 or more, there’s a lot of money at stake to lose. For instance, if you have 50 members fail to pay each month, you could lose $30,000 to $54,000 per year.

With that in mind, most third-party collection agencies weren’t made for gyms and fitness studios, with many of them focusing on more substantial “traditional” debts. That said, there are targeted solutions and best practices to specifically help gym and fitness studios maximize their overdue payment collections, while reinstating payments and retaining more clients.

Review and update important client payment information

How do you prevent collection agencies from needing to intervene in the first place? Being well-informed of every client detail will help to understand them better, resolve any concern with their payment methods, and prevent churn or any scenario where payment collections are needed.

With a business management software and a client profile, you can conveniently keep your client’s personal and financial information up to date, organized, and in one place. As a result, you can:

• View or adjust a client’s membership payment schedule or place an account on hold.
• Track your client’s attendance records, payment history, and whether any membership fees are left unpaid.
• Review client payment methods and communicate with clients when their credit cards are about to expire.

Identify accounts with past due payments

Most gym or fitness studio members likely have recurring memberships with their accounts set up to autopay. If you’re not keeping track of your clients’ credit card information, you likely won’t notice a problem until they’ve missed a payment.

With the right software and collection service, you’ll be able to easily track and view reports that include:

• The total number of active or inactive members with a negative balance.
• Every client that is 90 days past due payments, along with their last payment date.
• The day your client entered collections and their collection status (whether the debt has been resolved or they still owe on their account).

Preserve the relationship with your client

What are the end goals with payment collections?

1. Receive payment of any outstanding account balances.
2. Preserve the relationship of the client, while opening the door to reinstate their membership at your business.

Remember, these are former clients who couldn’t afford to pay for your services. Research shows that 46% of gym membership cancellations are due to costs, which is also why certain members end up in collections. Once they’ve paid their debt, re-engage with these lost members and regain their trust and support by offering a membership renewal at a discounted rate.

What if there were also a way to identify clients before they end up in collections? With WellnessLiving’s Isaac AI Churn Risk Report, you can identify clients at risk of leaving your gym or fitness studio in the next month with an 87% accuracy rate. Based on this report, you can set up an automated email, SMS, or push campaign that reaches out to members who haven’t attended your services during the past 30 days.

Don’t do it alone—Partner with a collection service specializing in the fitness industry

Many gyms and fitness studios struggle to manage overdue payment collections, especially when they turn the responsibility over to their front desk staff. After all, your staff may not be trained as debt collectors.

While your staff may be great for engaging with members and updating credit cards or outdated billing information, it will be harder for your staff to compel former clients to pay the negative balance on their accounts. At the same time, rather than collecting overdue payments, your staff should instead focus on signing up new members and growing your business.

Fortunately, there are collections agencies that work exclusively with gyms and fitness studios, saving you time and recovering more past due payments. Rather than take a one-size-fits-all approach to overdue payment collection, Aldous & Associates is a law firm specializing in 90-day past due client collections within the fitness industry. They work hard to quickly and safely resolve client debt, while maintaining the good reputation of your brand.

Need help collecting overdue payments? WellnessLiving has your back. Our Collections feature integrates with Aldous & Associates, providing you with the legal and collection support you need to resolve overdue payments. In addition, you can instantly streamline WellnessLiving to track clients and retain more members, all in one place. Book a no-commitment demo to learn more.