Business Ethics: Searching For An Effective Way To Show Contempt, And Failing Miserably

"You got a complaint?"

“You got a complaint?”

After yesterday’s excursion, I am adding Gold’s Gym to the long list of companies I will no longer patronize come Hell or high water. As my Dad used to say (he died exactly four years ago today, on my birthday, which I suspect may have been just another in a long line of his black humor pranks), “That and twenty cents will get you a ride on the MTA.”

Gold’s Gym screwed me in one of those little ways that doesn’t matter much in any one case, but that multiplied by thousands probably pays for some nice bonuses. I don’t appreciate this, and there should be a some way to make it stop, or at least hurt the company a little.  As with so many other unethical business practices, however, by other companies large and small, there isn’t, which is why those practices persist. And the fact that they are just scrimey, petty, unfair and wrong apparently isn’t that enough to make cause an executive somewhere in the chain of command who was raised right to just say, “Wait—this makes our company look like a used car lot.  Where’s our integrity?”  I suspect it’s because when such an executive does this, his boss says, “Integrity is nice, Bill, but that little trick pays for your raise.” To which Bill answers, “Oh. Never mind.”

On Christmas last year I gave my son a membership in the Gold’s Gym that is five minutes from our house. It was a month-to-month deal, with an automatic deposit of $35 or being charged to my credit card twelve times a year that I “could cancel ay any time.” My son appeared to like the idea, but he never found the time or inspiration to use the gym—unlike me at his age, he looks slim and fit, and plans on staying that way forever while exerting no effort at all. By mid-year it was clear that this gift was a bust, and by August I got around to calling Gold’s to cancel. No, I was told. You can’t cancel a membership over the phone. You have to cancel in person.

Oh, fine.  Except that September is the start of the busy season in continuing legal education, so I never seemed to find the time to get over there, and forgot all about it until yesterday, thus blowing another $105 for nothing at all. I am calendar-challenged in a big way, but I’m always aware of December 1, even more so since it officially became Finding Dad Dead In His Chair Day, so I visited the gym—I’m sure my son would have liked it if he ever set foot in the place-–and filled out the pointless documentation that could have easily been handled by e-mail or over the phone. Then the Gold’s Gym guy says, “There is a 30 day processing period.”

What? WHY is there a…oh, never mind, I know. There is a 30 day processing period so Gold’s can get one more $35 cash transfer out of me, as if the eleven previous cash transfers weren’t enough for providing no actual service whatsoever. Fitness businesses make their money out of the majority of customers who never use their facilities more than a handful of times all year, and the life-challenged muscle-heads who spend the bulk of their bulky time there reap the benefits of a cheap and professional place to work out, meet people, and look great for the rare times they aren’t there. Oh, I’m sure the bit about the 30 days was somewhere buried in the fine print of the four -page contract I signed last year, along with multiple unenforceable provisions like the one about how Gold’s isn’t liable if one of their trainers snaps and rips off my arm in a steroid-fueled rage. (I don’t know if Gold’s currently has such a fine print provision, but I know that Bally’s Fitness Centers used to). That doesn’t make it right; it just makes it enforceable.

So Gold’s Gym just picked my pocket of $35 bucks. Now what? My options appear to be:

  • Argue with the company’s rep and waste his time, and mine. He said he had no idea why the company had the policy, and I’m sure he was being truthful.  He was even apologetic about it. I can make an argument for why it is just and fair to hold a company’s agents responsible for executing outrageous policies they have no power to eliminate, but this seemed attenuated to me, or maybe I’m just getting old. Or nice. Yelling at this young man over a $35 charge just seemed like a bad idea. Especially since he looked like he could crack my skull like a walnut.
  • Write a letter. Yes, Dad, I know. And I don’t want to become one of those coots who takes to the keyboard as the reflex response to every slight, or like the Bronson Pinchot character in “The Langoliers,” who carries a little pad so he can report everyone he fights with to their supervisors. He gets eaten by a parallel dimension Pac-man thing, by the way.
  • Bitch obsessively about the company on Facebook, start a “Gold’s Gym Stole My Money” page, and devote every waking hour doing my utmost to spread the word about the company’s perfidy, costing myself business, reputation and social connections, and maybe even drawing a legal threat from the company so I can start a parallel anti-speech intimidation fight, pretty much guaranteeing that I spend my golden years living in a box by the banks of the Potomac. Good plan!
  • Write my congressman demanding a law to prevent this sort of thing. And with my congressman, Jim Moran (D-V), he might even work on it: there are few laws burdening businesses or niggling regulations he doesn’t like. I suppose keeping him occupied and out of trouble (he gets in a lot of trouble) is worth something, even though the law wouldn’t be. The problem with such laws is that if a company is run by people who will inflict policies like the 30 day “processing period” on consumers to steal a lousy $35 bucks, no law or crate of laws will stop their infinite ingenuity at being unethical. If “this is wrong” won’t stop them, if they have no functioning business ethics alarms, then the only question is how they will trick, or cheat, or maneuver customers into paying more money that they should have to.
  • Never sign up with Gold’s Gym again. Oh, that will really ruin their holiday at Gold’s! Pathetic.

Or I could write a post about it on my ethics blog.




19 thoughts on “Business Ethics: Searching For An Effective Way To Show Contempt, And Failing Miserably

  1. Jack, I hope you have a happy birthday, despite all those strikes against you. I know I would feel terribly snake-bit by bad moral luck, if I were you. But then, you don’t know me and my luck very well…but my commenter name is a pretty good hint.

    I am not so secretly hoping that regarding Gold’s Gym, you will not get mad, but get even somehow. Maybe your son could help you, as a kind of ethical, contrite make-up for the money you spent for him that he wasted. Conspiracy, when successful, multiplies delight.

    One evil plan is to sign-up for a trial membership, or say, take a free tour, and then, in response to a flickering fluorescent light (they all flicker, and their effect on each person is unique), feign a seizure, and sue them till they have to turn out the lights – and shut the doors, and close the store.

  2. “The life-challenged muscle-heads who spend the bulk of their bulky time there reap the benefits of a cheap and professional place to work out, meet people, and look great for the rare times they aren’t there” is the best sentence you have ever written on this blog.

  3. It’s not just Gold’s Gym. It nearly every major fitness chain out there. I had an LA Fitness membership that was an absolute nightmare to cancel – basically the same process as Gold’s except LA Fitness makes you mail it yourself, thereby adding another layer of friction to the cancellation process.

    The irony of course is that these practices are wildly successful at making them money. So much more so that LA Fitness was able to buy out my all time favorite gym chain Lifestyles Family Fitness, and essentially create a regional monopoly on large gym spaces in the greater Tampa Bay area.

    For the sake of comparison, Lifestyle’s Family Fitness really lived up to the ethics implied by it’s family based branding. It’s policies were simple and transparent and its culture was as pleasant as can be. LA Fitness on the other hand is about as transparent and honest as a snake oil salesman, and their internal culture cowtows to the Church of West Coast Narcissism, which needless to say, doesn’t create nearly as pleasant an environment.

    Its a sad fact that in today’s American culture, companies that practice bad business ethics aren’t always held accountable by the market.

  4. Jack:

    Here’s a story of a professional whose life was worked over by what could be termed “highly unethical businessmen”. His solution seemed to deter further unethical practices by the group.

    I don’t much want to push for posts, since you are correct: it is your blog and you’ll focus on what you feel needs it, but, consider a post on metadata and use of aggregate statistics (that are essentially only available to corporations) that are manipulated to squeeze every last dime out of clients… Especially those seeking to terminate services.

    I remember one anecdote from the book “Super Crunchers” that described a company that knew a certain demographic responded well to a specific offer and anytime an individual matching that demographic called to cancel, sales reps were directed to make a small version of that offer to see if it would hook the dissatisfied client a little longer (without actually addressing the complaint).

    I don’t necessarily think the market analysis available through the study of aggregate data is unethical, but what it is used for can be. The Gold’s Gym scenario makes me think that Gold’s has discovered that in the 1 month “waiting period” they’ve notice a substantial number of people come back. Keep a look out for a litany of “stay loyal” or “try this” or “how bout this” mailers from Gold’s before your cancellation is “complete”.

  5. My very least-favorite trick is when something is advertised as “free” and then a “service charge” is mentioned at the last second, payable to the very same people who offered the thing for free. Apparently the ability to post “free” on ads + service fee > the benefit of telling the truth and offering something for the price of the service fee.

    • Also the “free” (except for shipping and handling, which to no surprise is marked up just enough to cover cost of the item and profit on the item) hook, which eBay and sellers use to win most of their sells.

      There is absolutely nothing wrong with profit after paying for overhead, direct costs and labor/time. It’s amusing though how sellers smokescreen the costs to increase perceived value. I handle the bidding, estimating and contract preparation for our landscape company so alot of my work directly involves the pricing structure. It’s iteresting to observe over time, what the market is willing to pay for.

      Some times consumers undervalue the labor and are incredulous that they pay specialists so much… So those specialists reduce markups on labor while marking up material to offset. Lately the trend in our microeconomy has been sticker shock at material rates: so companies have been shifting markups to labor.

      I tend to feel that most markups should apply to labor. Material markups should be limited only to the direct costs of procuring material that the client would have assumed had they procured the material themselves. Applying most markups to labor, across multiple competing companies tends to display how much individuals value their actual skill and service and allows consumers to make the judgment of who really does provide an honest value:price ratio.

  6. Great post, Jack. Not much to add, but I absolutely agree that many forms of “automatic renewal” are totally unethical. However, gym’s did not invent this nor are they the only type of organization to work this angle. Anyone remember AOL? I think it was easier to climb Mt. Everest than it was to cancel your AOL subscription. Internet dating sites are guilty of this, too.

    Probably a good takeaway would be to avoid “automatic renewal” type of arrangements. Or, if you do, make sure you know what the terms of cancellation are beforehand. I renew my gym membership every year, it does not renew automatically.

    I never liked Gold’s, it has a certain conceited, snob appeal atmosphere that I do not care for: Country club gym, essentially.

  7. “start a ‘Gold’s Gym Stole My Money’ page”

    Oh Jack, this is the internet. You don’t have to start that page. Other people already beat you too it. Just Google “Gold’s Gym ripoff” and “Gold’s Gym Sucks” and leave a few comments.

  8. Jack:

    Thanks for the post, from me and all of us who have come out the worse in man-versus-company-policy battles.

    It left me considering a broader fact of life: how difficult it can be for us to to maintain our own ethical standards, while still keeping a thoroughly unethical adversary from getting the better of us.

    Sometimes I’ve taken the ethical high ground and taken my Pyrrhic victory lumps, and sometimes I’ve tried to out-scum the scumbags (with mixed results).

    And sometimes, with automatic renewals that I couldn’t stop with reasonable measures, I’ve found success by reporting my credit card as lost. Sleazy, I know, but effective.

    • Don’t even report the Credit Card as a loss. Inform your credit company that you’ve cancelled a plan and any further billing from the cancelled company is fraudulent.

      I know the massive faceless credit companies are easy to pick on as unconcerned behemoths, but I they haven’t failed me yet in going to bat for stopping false bills.

  9. Mr. Marshall:
    I too am not very fond of tactics used by merchants who artificially increase the switching costs of their products and services. I have also been held hostage to a Gold’s Gym and AOL.

    The question however before us is what did you buy and what was delivered as well as the terms and conditions of the contract. I know you find substituting law for ethics is an anathema but sometimes for practical purposes it is necessary to determine what is ethical and what is not.

    While I understand why a phone cancellation might not be acceptable as it does not leave a paper trail, I do not understand why it must have been in person. A written cancellation in August would have been sufficient along with a copy to the bank canceling the authorization to debit the card. This is what I did and it was effective. The difference in my case was that it was an annual contract not a month to month.

    I want to emphasize that I know how you feel when you are promised the ability to cancel anytime and then the merchant falls back on the terms and conditions to exact the last bit of money from you. It appears on it’s face bad business practices and unethical. But it is part of an agreement into which there was voluntarily entry by both sides.

    Let’s also consider that contract was for unlimited access and not for a specific number hours. It is irrelevant whether or not the facility was actually accessed it is only relevant that it was available. By extension, would it equally be unethical if I used the facility regularly but never experienced any expected weight loss or increased stamina? If I contract for cell service or cable TV and I make or receive no calls or watch TV the service was still available if I chose to use it. Therefore I am obligated to pay.

    I am assuming that Gold’s held fast to the contract’s terms and that a contractual breach on their part did not occur. Are you suggesting that it is unethical to demand adherence to a contract? Would we not expect consumers to hold Gold’s Gym responsible for providing its contractual obligations if the reverse occurred? I suppose, while I am unsure what ethical breach occurred, I sure as hell know that following the rules to the letter do not engender quality customer relationships. I think we have to ask ourselves why has a simple gym membership contract has evolved into a convoluted legal document that winds up creating more trouble than necessary. It would be great if we could bring back the handshake as a means to seal a deal.


    • Jack isn’t complaining about paying for the months that weren’t used. He mentions it, but it isn’t the core of his ethics complaint.

      The core of the complaint is being billed another month, because it ‘takes a month’ to process a cancellation.

  10. I, for one, would like to read about a company’s lack of integrity BEFORE I end up doing business with them.
    That’s why I think people should put their complaints online.

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