GoCardless research reveals that dishonour fees erode gym member loyalty

New research has revealed that fitness facilities across Australia are losing members to ‘dishonour fees’ charged by their payment providers.

The research from bank payment company GoCardless, reveals that – from a survey of more than 1,000 respondents - 81% of Australians would take action if their gym payment failed and they were temporarily barred.

30% also advised that would cancel their membership outright if charged dishonour fees, highlighting the critical need for fitness businesses to have access to fairer, more flexible payment options to safeguard member loyalty.

Dishonour fees, sometimes known as ‘failure fees’ or ‘late payment fees’, are fees a financial institution applies when a payment doesn't go through or fails, for example, if there are insufficient funds in the account or an error in payment details.

The research reveals that less than half (47%) of Australians find current gym fees fair and transparent, and 75% would prefer flexible options like smaller weekly payments instead of a single monthly charge. This preference for flexibility reflects a growing demand for payment practices that align with consumer needs during the cost-of-living crisis.

Dishonour Fees Add Unnecessary Financial Stress
The financial strain caused by dishonour fees is a pressing concern for gym members. 76% of Australians consider these fees unfair. Among those charged with one in the last 12 months, 82% say they add unnecessary financial stress. Nearly three-quarters (74%) reported being in a worse financial position after being charged, and almost half (49%) of all Australians who believe these late payment fees are unfair think businesses should also be more sensitive to those needing extra time to pay amid tight economic conditions, meaning gyms risk alienating members by using rigid fee structures.

Dishonour fees also contribute to widespread confusion and mistrust. Over half (53%) of Australians blame their banks for these charges, while 37% of Aussies who say these fees are unfair are also unclear about who loses money when a payment fails. This lack of transparency erodes trust between gyms and their members, further compromising long-term relationships.

Damaged Reputations Driving Members Away
Explaining that GoCardless have chosen to prioritise better methods of collecting payments that do not risk harming businesses’ reputations, GoCardless Account Director Australia and New Zealand, Kyle Willersdorf stated “charging dishonour fees is optional for payment service providers (PSP), and it’s something GoCardless has opted to avoid doing. Our perspective is that if a PSP earns money from a business’ misfortunes, then it is not aligned with that business’ best interest.

“We operate in a way that better supports the priorities of both businesses and consumers.

Willersdorf advises that GoCardless is calling for the fitness industry - and Australian businesses broadly - to rethink billing models arguing that moving away from outdated systems that rely on penalties can help gyms improve retention, reduce churn and build trust with members.

Late payment fees directly impact the reputation of fitness businesses
The GoCardless research shows that 73% of Australians wouldn’t recommend a gym that charges dishonour fees to friends or family. Additionally, 87% advocate for a ban or limitation on these fees, while 86% say they are more likely to return to businesses that avoid such charges altogether. For gyms, the stakes are clear: punitive payment practices could cost them not only members but also positive word of mouth.

Willersdorf added “our research also suggests that in the fitness space, members see a dishonour fee and associate it with the gym, even if the charge is coming from outdated systems or payment providers.

“By switching to a payment provider that doesn’t see payment failure as a revenue stream, gyms can eliminate these fees, build trust, and focus on delivering the kind of experience that keeps members engaged and coming back. It’s not just about the money - it’s about ensuring members feel supported and valued."

The study was conducted online between 28th November and 1st December 2024 among a nationally representative sample of 1,003 Australians aged 18 years and older.

Images: Gyms across the country are losing members to ‘dishonour fees’ charged by their payment providers (top, credit: Shutterstock), GoCardless Account Director Australia and New Zealand Kyle Willersdorf (middle) and Jonathan Quieros, owner of Melbourne’s Dukes Gym, who says most payment platforms have egregious late payment fees, and if a customer accidentally misses a payment, he fields the blame (below).