Processing Fees: Should You Pass Them On to Clients?

When you own a fitness business, it can feel like operational costs never stop climbing. ​And within your list of expenses, you might not even notice one of the biggest culprits cutting into your bottom line: transaction processing fees.

For most fitness businesses, these fees range from 2.9-3.5%. At first glance, such small percentages may not appear to make much difference for gym owners. But when you consider that each and every card and bank account transaction incurs a fee, they can add up quickly.

So, should your gym continue covering transaction fees—or pass them on?

Let’s take a look at the options.

The Real Cost of Your Transaction Processing Fees

Let’s start with the recurring costs of access to your facility, whether that’s a monthly gym membership, class package, etc. Using a membership fee for example, if you charge members $185 per month and your gym incurs a 3% processing fee, that’s $5.55. If you have 150 members, that’s $832.50 per month and a whopping $9,990 per year.

Next, let’s look at other common transactions. Most fitness business owners sell retail products to increase gym revenue – these are things like FitAid, protein bars and apparel. If each of those point-of-sale moments are happening separately, each is racking up processing fees as well.

Whether your clients pay with a credit card or a connected bank account, those processing costs chip away at your margins month after month. For fitness businesses of any size, this can add up and quickly become detrimental. Ultimately, it’s money you could be reinvesting into your business, in areas like:

• Better equipment and facility upgrades
• Hiring and retaining great coaches or instructors
• More classes, events and member perks

Should Your Processing Fees Be Passed to Clients?

More than ever, passing on your transaction processing fees is a common practice now.

Your clients are already used to seeing small processing or convenience fees from restaurants, salons, utility providers and online retailers. As a small business owner, your decision to pass on fees likely wouldn’t come as a surprise to your fitness community.

The key however, is to communicate it clearly. It’s better to be transparent about the fee – why you’re passing it on and where their money is going – instead of hoping they don’t notice. Chances are, they love your fitness business and won’t think twice about doing their part to support it.

Why Passing On Fees Makes Sense for Gym Owners

The good news is, you likely have a great relationship with your gym community. Therefore, they understand that you’re not trying to nickel-and-dime anyone. You have a business to run so that you can keep providing an incredible member experience and changing lives.

When your clients understand that each card swipe and bank transfer comes with processing fees, they can look around and see that those fees add up.

For the bottom line of your business, passing fees on to members helps you:

• Keep your pricing structure clean and consistent
• Protect your margins without raising base prices
• Reinvest more into your community, staff and space

And with Wodify, it’s a simple switch to start passing on fees to clients. We’ve even created a plug-and-play email template you can use to announce the change.

Need help communicating with members? We’ve got your back. Check out this email template to help you roll out the change smoothly!

Common Gym Owner Concerns

If you’re hesitant to start passing your gym processing fees on to clients, you’re not alone. Here are a few common concerns we hear from gym owners:

“Will this upset my gym members?”

Probably not. Most people are used to service fees elsewhere. When you explain it clearly and give them a heads-up, your community will understand.

“I don’t want to look greedy.”

Passing transaction processing fees on to members is not a ploy to get you a new yacht. It’s a strategic move for the health of your fitness business. It’s likely that these fees have been impacting your bottom line and coming out of your pocket for years. You’re simply making that cost visible now.

“What if I lose members?”A $5 fee isn’t likely to shake your retention. If your programming, coaching and community are strong, your clients will know the value you’re providing. In your communication, keep the focus on what they’re getting, not what it’s costing them.

How Wodify Makes Passing Fees Easy

As with everything else in Wodify, our goal is to simplify gym management in as many ways as possible. Which is why you can automatically pass your processing fees on to all transactions with the flip of a switch. It’s configurable, clearly displayed to your clients on their bill, and easy for them to understand.

You can customize the name of the fee to whatever feels most appropriate for your business. Options include things like, “transaction fee,” “processing fee,” “service fee,” or anything else that fits your tone. In addition, you can choose to apply the fee only to transactions above or below a certain dollar amount, giving you control over when and how it’s implemented.

By choosing to pass on your gym’s processing fees, you’re making a smart business decision. Not only are you protecting margins without raising base prices, you’re holding onto the funds that can be reinvested in the business for the long term.

Ready to take control of those hidden costs? Book a Wodify demo today or contact your account manager to learn how to enable passing on processing fees!Before enabling Passing On Processing Fees, be sure to consult legal counsel that is familiar with the regulations in your jurisdiction. Accepting cash or check while passing on fees may violate major card brand rules. For more details, see our Help Center article.