"Under the Pretext of Fees, Even Employee Allowances" COVID-19 Gym Refunds, Cancellation Fees Are Skyrocketing

VAT, Penalty Fees, and Taxes: Fees Larger Than the Principal
Hard to Enforce Refunds When Gyms and Fitness Centers Refuse
"Anxious About COVID-19, but Leaving Gym Due to Penalty Fee Concerns"

Gym. The photo is unrelated to specific expressions in the article. Photo by Yonhap News.

[Asia Economy Intern Reporter Kim Yeon-ju] #Office worker Kang (27) requested a refund from the gym he attended due to the prolonged COVID-19 pandemic. Kang paid 1,150,000 KRW for 30 personal training (PT) sessions last March but only attended two sessions because the gym operations were suspended due to COVID-19. Although he was aware that a penalty fee would be charged upon refund, the gym stated that according to their policy, refunds due to a change of mind require the customer to bear a 10% penalty fee stated in the contract along with the trainer’s labor costs. Kang complained, "They calculate the tuition fee at a discounted price but deduct the full regular price when refunding. Where does that make sense?"

Inquiries about early termination of contracts for health and fitness facilities, which are considered high-risk for COVID-19 infection, are increasing.

According to the Korea Consumer Agency on the 17th, from January 20, when the first domestic COVID-19 case was confirmed, to the 2nd of this month, a total of 9,999 consultations related to health and fitness were received at the 1372 Consumer Counseling Center. This is about a 39% increase compared to 7,200 cases during the same period last year.

Refund-related consultations have been received at a rate of more than 20 cases per month. Refund consultations, which were only 9 cases in January, more than doubled to 21 cases in February. During the peak of COVID-19 in March, they increased to 36 cases and further rose to 42 cases in April.

Housewife Park (32) said, "The government designated gyms as high-risk facilities for COVID-19 infection and even ordered their closure. How could I feel safe going there? The closure period was long, and I couldn’t wait until the situation calmed down, so I decided to request a refund."

The problem lies in the fact that refund requests are not properly processed. There are no exceptional refund regulations specifically for the COVID-19 situation. Also, even if the penalty fee regulations demanded by businesses feel unfair, there is no effective way to enforce regulation.

Photo by Online Community Capture

On online communities and elsewhere, complaints are pouring in about consumers having to bear all penalty fees, including employee allowances and unclear VAT, which are difficult to accept as legitimate charges during the fitness refund process.

One online community post was titled "Fought a refund battle for Pilates for two months."

The author wrote, "I paid 495,000 KRW for 45 sessions. Later, I requested a refund due to COVID-19, and the gym said I could get back 270,000 KRW after deducting a 10% penalty fee and 6 used sessions."

They continued, "But suddenly, the gym said they would refund only 166,000 KRW after deducting 10% VAT, 10% penalty fee, a 30,000 KRW registration fee, 3.3% tax, and card fees. On top of that, they deducted an additional 60,000 KRW for an incomprehensible reason that an employee suffered damages, so I ended up receiving only 100,000 KRW as a refund."

Office worker Lee (29) said, "The fees deducted during the refund process are more than the amount I get back, so I’m reluctantly going while wearing a mask," adding, "They say it’s unavoidable according to the rules, but what can I do?"

Lee added, "The government mentioned these as high-risk facilities for COVID-19 infection, but it’s absurd that proper refunds are not processed. I asked the Consumer Agency for help out of frustration, but they only helped mediate and didn’t provide any real assistance."

Social distancing notice posted inside the gym. Photo by Yonhap News

The Korea Consumer Agency, a consumer dispute mediation organization, also stated that if gyms and fitness clubs refuse refunds citing their policies, they can only assist with mediation and have difficulty enforcing compulsory measures.

A representative from the Korea Consumer Agency said, "We prepare mediation proposals based on dispute resolution standards and notify businesses about penalty fee adjustments, mediating disputes between consumers and businesses. However, if either party refuses to agree, civil litigation must proceed."

They added, "Since the dispute resolution standards themselves are not laws but notifications, the terms and conditions take precedence. Therefore, there is no compulsory power, and we only assist in reaching an agreement between both parties."

This content was produced with the assistance of AI translation services.