Actually, I was thinking more in percentages. The percentage of people that sign up for gyms and then want to cancel is extremely high.
Obviously gyms believe that they can charge a very high cancellation fee as very few people (a) read that section of the contract and (b) don't think they are going to quit. On the flip side, people do consider buying out their mortgage early so they may ask about penalties up front. They are already considering quitting even before they start. So it would earn the banks LESS money if they charged a higher cancellation fee as people would put their mortgage elsewhere. Same thing with cell phones. People want the flexibility of moving providers, don't want to be on contract and therefore are already thinking about canceling even when they are just getting the contract. But when joining a gym people want to think that they are going to this gym for years and they are not going to quit.
It's a delicate balance. Companies want to have contracts, have cancellation fees, but not have them so high to drive away business. Gyms have found that excessively high cancellation fees do not drive away business. If it did, money would talk and they would lower the cancellation fees.
|