Shanghai introduces 7-day cooling-off period for gym membership purchases

Shanghai will tackle unscrupulous sales of gym memberships by offering consumers a seven-day cooling-off period to address the difficulties they face in getting refunds for impulsive purchases.

A sample membership contract for the city's sports and fitness industry, released on Monday by the Shanghai Consumer Council, is mainly aimed at regulating the business behavior of fitness service operators.

It focuses on problems such as business operators using terms that restrict consumers' rights and reduce and avoid their own responsibilities. The standard contract is designed to help resolve disputes.

A first batch of more than 400 gyms of 15 major fitness brands in Shanghai will start to use the sample contract on Friday.

Among the terms listed in the model contract, the seven-day cooling-off period for purchases of gym memberships has gained the most attention. Purchasers who have not used their membership card will be able to terminate the contract unilaterally within seven days and get a refund.

"It was impossible for me to get a refund after I spent thousands of yuan on a misguided purchase," said Shanghai resident Yuan Chenyuan, 28. "A cooling-off period could protect consumers like me."

Yu Shiping, director of the Shanghai Administration of Sports' industry planning department, said: "The reason we defined the seven-day cooling-off period in the contract is to deal with the problem of withdrawal and refunds from the very beginning. We expect consumers to think rationally before signing the contract. On the other hand, the authorities should supervise fitness enterprises to make sure they fulfill the contracts and their responsibilities."

There were 8,227 fitness clubs in Shanghai by the end of 2019, with the city's service hotline receiving 15,690 complaints about prepaid gym memberships that year.

"Fitness industry complaints are among the top three complaint types, and most complaints are about refunds," Yu said.

Yao Ning, CEO of 3HFIT, an agency that certifies fitness coaches, said: "The refund problem does exist. It is mainly caused by information asymmetry, or the big gap between the sales description and reality. Also, some members who are almost forced to buy memberships due to high-pressure sales quickly come to regret their purchases."

Zhu Xingliang, founder of Zhongtian Fitness Center, said: "The release of the service contract can make fitness enterprises change their thinking. If the previous model of emphasizing sales over service continues, it may be difficult for gyms to survive in the future.

"For gyms with a mature business model, such a cooling-off period or refunds will not hurt their operation, but instead regulate the whole fitness industry."

The contract also specifies the situation for refunds, liability for breach of contract, and the rights and responsibilities of operators and consumers.

If the operator breaches the contract, including changing the service content without authorization, terminating or relocating the business and failing to reach an agreement with the consumer on compensation, the consumer has the right to unilaterally terminate the contract and obtain a refund.