Gym membership billing: card and direct debit

Plans first

A plan is what you sell: how many classes, for how long, at what price. A payment is money changing hands. The right to book is what the plan grants while it is valid. They are three different things, and it pays to treat them that way from day one.

• Membership: a monthly price, with unlimited classes or a weekly limit.
• Class pack: a number of classes to use within a set time.
• Drop-in: one class, paid once.
• Annual or quarterly plan: paid upfront at a discount, or in instalments.

Start with three or four plans. Every extra plan is one more rule to explain at the front desk and to bill correctly.

The price of each plan comes from a sum that starts with the cost of one hour of your room. How much to charge for a membership

Payment methods, side by side

In a new gym, offering two or three methods covers almost everyone. Card handles immediate payment. Direct debit suits people who would rather not think about it every month.

Direct debit in Europe: the rules to know

SEPA Direct Debit is a euro collection started by the gym from the member's bank account, with their prior authorisation. That authorisation is called a mandate. EU law gives the payer rights that a gym needs to know before choosing this method.

In practice, a membership collected by direct debit can be reversed during the following eight weeks, with no reason needed. So a direct debit counts as paid on your books, but the money is only settled once that window closes.

Other countries run their own schemes with their own rules. In the UK, for example, the Direct Debit Guarantee says the organisation will normally notify the payer 10 working days in advance of changes to the amount, date or frequency. It also entitles the payer to a full and immediate refund if an error is made.

• Always tell members the amount and date before you collect.
• Never change the amount without written notice in advance.
• When someone cancels, stop collecting from the next cycle. A debit after the end is a refund claim waiting to happen.

Card payments and authentication

In the EU, many online card payments need strong customer authentication: two elements such as a phone and a PIN. Expect the first payment to ask the member to confirm in their banking app.

The billing date

There are two ways to choose when you bill. Each one affects the first month and the reconciliation work.

In a gym that opens with a pre-sale, opening day works as a fixed day for almost everyone. People who join later can pay on their anniversary date. Pick one rule and write it into your terms.

Example: a 60 euro membership, for someone joining on the 21st of a 30-day month with ten days left. The sum is 60 × 10 ÷ 30, which is 20 euros.

Joining fee: yes or no

A joining fee pays for the work of welcoming someone new: onboarding, assessment and a closely followed first week. It is also the simplest intro offer to give: “no joining fee until Sunday”.

The downside is one more amount to explain at first contact. If you charge it, say what it covers and write it into your terms. If you do not, do not invent one just to waive it later.

What each payment method costs

Each electronic method has a cost per payment, which depends on the processor and your contract. To compare, work it out per month, with your own plans:

1. 1.Ask for each method's fee table: a fixed part per payment, a percentage, or both.
2. 2.Apply it to a typical membership of yours to get the cost per payment.
3. 3.Multiply by the number of payments per month through that method.
4. 4.Add the time spent matching bank transfers and cash, which costs too.

When a payment fails

A card expires, an account runs short, a payment request goes unconfirmed. A failed payment may be nothing more than an expired card or an oversight. Handle it quickly, the same way every time, and without embarrassing anyone.

Invoices and receipts

Invoicing rules vary by country, and some require certified software. Before opening, agree three things with your accountant:

• Which invoicing tool you will use.
• Who issues the invoice, and when: at the moment of payment, or at the end of the day.
• How members receive their invoices, and where they can find them later.

Billing during pre-sale

• Set the plan start date to opening day, not the purchase day.
• If you take a deposit, write down what happens if opening is delayed.
• Use the same payment methods you will use later. That tests the whole flow before the first monthly charge.

Common mistakes

• Choosing a payment method before the plans are settled.
• Running ten plans, each with a different billing date.
• Treating a direct debit as settled money on the day it is collected.
• Handling each failed payment differently depending on the person.
• Leaving invoicing until after opening.

How this works in Rummo

In Rummo, members pay by card or SEPA Direct Debit, through the payment processor. The money goes straight into your own payout account and never through ours. Card and SEPA are on paid plans, and manual payments are on all plans.

A plan marked as renewing creates the next period and issues the charge on the day the previous one ends. Rummo does not store payment methods. So the member completes each payment, and no card is charged without them confirming.

The finance dashboard shows what came in, what is outstanding and from whom. Rummo does not issue invoices yet, so invoices come from your own invoicing tool.

Payment methods, renewals and the finance dashboard are on one page. See payments in Rummo