Over 90% of New Year gym memberships go unused after the first three months. While this is frustrating for gyms, it’s worse when they stop paying at the same time. Many businesses don’t understand how gym memberships and the lack of payment are affecting their business.
In this article, we work on explaining gym collections and the benefits of debt collection agencies. We also guide you on how to know when you need to start the gym collections process. Continue reading to get ahead of gym debt.
How Unpaid Gym Balances Affect Your Business
The first step in collecting unpaid dues is understanding how gym balances affect your business. The most obvious impact is the loss of money. However, it’s not just the missing revenue from the unpaid membership fees that hit businesses hard.
Consider the amount of employee time and company resources that go into collecting for gyms. Employees spend valuable time calling debtors or preparing multiple statements to send them. These calls often go unanswered, or the letters are returned to the sender.
This ends up wasting time when it doesn’t result in paid fees. It can also affect your reputation if you don’t go about debt collection with care or follow the extensive debt collection laws.
What Are Collection Agencies?
Let’s take a moment for explaining gym collections. Debt collection agencies are businesses with the time, resources, and experience necessary to collect debt on behalf of other businesses.
They can service companies ranging from loan servicers to utility companies and more. Collecting for gyms can be a difficult balancing act and collection agencies know how the process works.
How Gym Collections Work
Understanding how gym collections work can help you pick the right agencies. At First Federal Credit Control, we start by understanding the unique needs of our clients, so we have an accurate picture of the debt situation.
After we have the information we need, we start our efforts to make contact with the debtor. We also incorporate credit reporting and our innovative technologies to make the process as simple as possible for both parties.
We send our clients regular updates about the process via phone or mail. We strive to ensure you stay informed as much as possible.
What Are the Benefits of Gym Collections?
When it comes to gym collections, you may think you want to handle the collection process internally, instead of turning to debt collection agencies. However, it’s important to understand the benefits of gym collections agencies before making the final decision.
Professionals with Legal Knowledge
Laws regarding debt collection are difficult to understand and constantly changing. If you make the wrong move to collect your unpaid dues, a client may have the right to sue you for violating their rights.
Debt collection agencies understand these laws and how to operate within them. This offers you the legal protection you need, while also working toward obtaining your due funds.
More Time Dedicated to Recovery
As a gym or fitness center, you have more to worry about than how gym collections are affecting your business. Any efforts you make are likely to be in spare time, as opposed to the full-time attention these situations require. Debt collection agencies have the time to dedicate to these efforts.
Higher Chance of Debt Recovery
Due to years of experience, resources, and dedicated time, debt collection agencies have a higher chance of debt recovery. This is the best option if you want the highest chance of collecting unpaid balances.
Better Documentation of Process
If the legality of the gym collections process ever comes into question, it’s important to have detailed documentation of all of your efforts. Without this documentation, you could be at legal risk.
Debt collection agencies keep detailed, accurate records of every step of the process. You don’t have to wonder what happened during any given conversation.
When to Hire Debt Collection Agencies
Knowing when to hire debt collection agencies is important for the success of your business. Collecting for gyms can get messy, and keeping the process internal for too long has its consequences.
The Amount of Unpaid Gym Balances is High
The number of unpaid gym balances can get out of hand quickly, especially if you aren’t paying close attention to them. What you thought was just a few accounts may now be thousands of dollars worth of debt.
When you feel like your efforts aren’t rendering results and the amount of debt is only growing, it may be time to reach out for help. Getting ahead of the debt is easier than trying to recover years worth of unpaid balances.
You Can’t Work It Out Directly
If you have an overall positive relationship with a debtor, you might try to work out their debt directly in order to maintain the relationship. However, explaining gym collections to debtors can be difficult, especially if they don’t want to listen.
If you are having trouble working out the debt privately, it may be in both of your interests to work with debt collection agencies. They can help recover funds while maintaining a good relationship with debtors. This also helps preserve your reputation with the public.
Gym Debt Collection Is Vital to Business
If you’re wondering what dollar amount justifies hiring a debt collector, the answer depends on your business. For some businesses, $1,000 is more than enough justification. Consider what amount is significantly affecting your ability to succeed.
Trouble Contacting Debtor
Some customers who stop coming to the gym simultaneously stop paying their gym membership fees and become impossible to contact. Letters may get returned, and phone numbers may now be disconnected.
Instead of panicking and worrying about whether or not you’ll be able to recover the debt, consider reaching out to collection agencies. They have the necessary resources to track down hard-to-reach customers, even if they don’t want to be found.
Understand How Gym Debt Is Affecting Your Business
Understanding how gym debt is affecting your business can help you get ahead of it before it becomes a big problem. Consider working with a company that knows how to navigate the legal complexities and sensitive customer dynamics.
If you’re ready to move forward with gym collections, contact us today to get started.