JUST WHEN WE thought it was safe to join a health club, we learned that some of the sales rooms at Cosmopolitan Lady are bugged. That’s right: A hidden speaker allows the manager to listen in as employees make their pitch to prospective customers. Should an extra ounce of pressure be needed, the manager can pop in to help seal the deal. This revelation conjured up images of sneaky, manipulating money-grubbers ready to use any tactic to cajole would-be Schwarzeneggers into joining their clubs. And, since Cosmopolitan Lady and President’s Health and Racquetball Clubs cater to the fitness needs of some 25,000 health-conscious Dallasites, we decided to look into the sales techniques used by the people who help the Metroplex flex its pecs.
Our hunch was well-documented at the The Better Business Bureau, whose files are bulging with complaints against Cosmopolitan Lady and President’s. Most are from people who say they misunderstood the terms of the membership contract. Some are from people who were unfortunate enough to get a poorly trained salesperson who made promises that couldn’t be kept, or from people who said they were tired of being pestered at home and at work by salespeople who just couldn’t take “no” for an answer. The saddest complaint letter we read was from an overweight couple who said the salesperson told them they were “obese” after she took their measurements over their heavy warm-up suits. Later, they said, the sales manager told them if they didn’t join that day, they’d be 20 pounds heavier in a month. Needless to say, they didn’t join the club.
IN AN EFFORT to discover any wolves in sheep’s leotards hiding at Cosmopolitan Lady and President’s, we anonymously visited six of the clubs and found what we believe were several instances of unfair sales tactics. To evaluate unfair sales strategies, we used guidelines from The Complete Health Club Handbook, published in 1983. The authors reviewed more than 150 health and fitness centers in 10 major cities, including Dallas. Both clubs received favorable reviews in the book, and Cosmopolitan Lady actually uses it in its sales presentations. According to the Handbook and our experiences, beware of the following:
●High Pressure: It usually involves intimidation or “double-pitching,” which means the manager comes out to help close the sale if it appears the salesperson needs some help, a la car sales. At one President’s we visited, a Tom Selleck look-alike used the following lines: “If you don’t sign up today I’ll lose a big sales contest, and right now we’re just one sale away. This phone right here is a hot line and that’s how we find out how close we are to winning.” And, “Why don’t you sign up today and we can sign your husband up tomorrow? How long have you known him? Doesn’t he trust you enough to make the decision for the both of you?” Lastly and most ghastly, one salesman actually said, “I’m going to cry if you don’t sign today.”
●Misrepresentation: We didn’t encounter any sales tactics on our visits that we considered overtly misrepresentative, but a little warning signal should go off in your head when the salesperson starts talking about employee qualifications and the physical results you will obtain as a result of sticking to a fitness regimen or diet. The closest thing we found to misrepresentation was when a President’s manager evaded a specific question. “Can I cancel my contract in three days if I feel I’ve made a mistake?” we asked. (According to state law, you can. Both chains offer this option.) “I’m not going to tell you that you can’t, but there are exceptions,” he said. “You are an adult, fully aware of what is going on and of what you are doing.” In another case, a Cosmopolitan Lady saleswoman told us that many people on the staff had college degrees in fitness. Cosmopolitan Lady does employ a woman with a degree in physiology, another with a degree in child development and a third who is a specialist in nutrition. But for the most part, few of the fitness counselors at any of these clubs have any professional training.
●Join Today And Save: This tactic is used to make you think you’re being rewarded for making a quick decision. But deciding too fast can be costly, especially if you haven’t inspected any other clubs. At each of the clubs we visited, the salesperson promised us the same savings. At Cosmopolitan Lady it was $50 off the $100 down payment and at President’s the discount off the down payment ranged from nothing to $44, depending on the salesperson’s degree of enthusiasm. In one instance at Cosmopolitan Lady we were shown three membership plans, but we had to ask about the “Half Off sale advertised in the parking lot on a portable sign. “Oh, I’m so glad you asked about that,” said our salesperson. “That offer is only good on this particular membership and you have to pay by cash or credit card today.”
●Discrediting the Competition: According to the Handbook, if the facility is worth the money the salesperson is asking you to pay to join, then he or she has no reason to discredit other clubs. Still, on one occasion a President’s manager told us that Cosmopolitan Lady health clubs were for “middle-aged” women, their exercise programs were “disorganized” and that it might take one-and-a-half to two hours to get a good workout at Cosmopolitan, while at his club anyone could be in and out in 30 minutes. On the other hand, a Cosmopolitan Lady saleswoman told us that “Most husbands don’t like their wives going to coed clubs like President’s” and that the club’s weight machines weren’t specifically designed for women.
FORMER EMPLOYEES OF Cosmopolitan Lady and President’s told us they found out about the unusual sales techniques practiced at the companies’ six area clubs the way most employees find out. They went to the clubs to sign up as members and were asked later if they wanted jobs. “I used to work in a health club in another state and I transferred my membership,” says Carol Little (not her real name), who worked at a Cosmopolitan Lady club for almost a year. She had to read the One Minute Salesman and learn to say a client’s name eight to 10 times during a sales pitch. “When they started going through the sales pitch with me, I told them I knew what was going on. That’s when they asked me to come to work for them. They promise you the world and from there they show you the speaker phone and you learn it’s all a game.”
Tami Miller (also not her real name), a pretty, energetic college student, recounted nearly the same story but says she lasted in Cosmopolitan Lady’s sales department less than two weeks. Later she asked to teach a dance class. “I just couldn’t handle lying to people,” Miller says. She and Little agreed that the spiels usually involved remarks about a woman’s husband or boyfriend such as, “Don’t you want to have a nice figure for him?” They also said that the most common sales pitch used involved suggesting that a prospect was getting a special deal. “They tell you the initiation fee is $100, but then they say they’ll try to get their manager to let you pay only $50,” Miller says. “But they say and do this for everyone, so that way if there is a half-off coupon in the newspaper they’re covered.”
Miller explains that she used to get around the hard-sell technique by telling friends who wanted to join the club to hold out for the cheapest membership package-no matter what she tried to sell them. Sometimes she showed them the speaker phone. And nearly every time, her manager would later try to convince them to “upgrade” to a more expensive plan.
Both women were led to believe they would be making reams of money by selling memberships at the clubs. While Little was there, she said she was paid a $300-a-month base salary, a commission worth 10 percent of each contract and five-and-a-half percent commission on the down payment. Since each contract averaged about $800, the deal sounded great until she learned that her total gross in contracts had to exceed $15,000 each month or her commission earnings would be cut in half. She said the total was nearly impossible to meet.
“What I didn’t like was that the manager usually decides who gets the prospects,” Little says. “It’s really cutthroat. I didn’t like to steal clients away from my friends. You really have to wheel and deal, and sometimes there was favoritism. That’s why there’s such a huge turnover. Little says the high turnover bothers members. “Women come in expecting you to be their personal counselor. When the counselors leave, the women are lost in the club. Nobody wants to help them anymore because they didn’t earn a commission off of them. I know of two women who quit because I left.”
THE INSIDE STORY on President’s didn’t include bugged sales rooms, but some of it sounded equally offensive. Little worked at a popular President’s Health Club for the first six months of this year. She left Cosmopolitan Lady thinking she would get more money at President’s with the promise of a $l,000-a-month base salary and two-and-a-half percent commission off each membership contract. Unfortunately, Little says, she and another friend hired at the same time were only paid a $500 base salary for three of those months. She finally had to write a letter to the company threatening an investigation by the Department of Labor and Standards. “The day I gave them a letter, they rushed me a check from California, but I had to fight like cats and dogs to get it.”
Little says it isn’t uncommon for President’s salespeople to show only the two most expensive sales plans to a prospective member and use “cute one-liners” as an answer to a customer’s objections. “If you get up and walk out the door, then you’ll usually get their best deal,” Little says.
She adds that selling memberships wouldn’t have been so bad if she hadn’t been told by her manager to discourage blacks from signing up with the club. “We had a code, 3K, that was used when a black walked in. It meant the person didn’t qualify. It stood for KKK.” Little said it was her understanding that she wouldn’t receive a commission on those contracts, so she showed prospective black members astronomical membership fees to discourage them from signing up. Little is now a leasing agent at a Dallas apartment complex. “I love it; there’s no hard sell here.” (When asked about the “racist” policy, Sonny Reser of President’s Health Clubs said neither he nor his company has ever had such a policy, and that the incident was most likely an isolated one.)
Besides common sense advice, Miller and Little offered a few inside tips on how to get a good deal on a membership at any health club:
1. Visit the club at the same time you’remost likely to attend if you join. Is it toocrowded for your liking? Since the clubsdon’t restrict memberships, it could get evenmore crowded. Are people waiting to use theweight machines? Are they jostling for spaceon a crowded aerobics floor? Remember thatthe busiest time of day is right after work between 5 and 7 p.m.
2. Ask for a tour of the club. Who will beyour fitness counselor and what days ornights does he work? Is the pool clean? Arethe locker rooms clean? Does the equipmentappear to be well-maintained? Do they havethe kind of fitness plan you think you want?
3. Ask to see all the membership paymentplans as well as a copy of the contract. Mostclubs offer three plans, and the cheapest oneis often the best deal. Use a calculator tomake sure the down payment plus the totalamount of monthly payments multiplied bythe finance charge equals the total price thesalesperson shows you. The down payment,keep in mind, is usually negotiable, and canvary depending on your salesperson’s need to sell. Just make sure the salesperson doesn’t try to “help” you make the down payment by adding it into your monthly fee. Memberships usually include a yearly renewal fee that looks cheap compared to your down payment, but you may not want that type of plan, especially if you’re considering relocation.
4. Find out if the club is a member of any national fitness organization. Both President’s and Cosmopolitan Lady pay dues to belong to the Association of Physical Fitness Centers, which has strict rules and regulations regarding service. Membership in the club usually gives you reciprocal membership in other APFC member clubs. Your club should have a list of reciprocal clubs.
TACKY SALES tactics aside, with a few exceptions, Texas and Dallas health spas have had fairly clean legal records, say those in the industry. That’s not surprising, since there were no laws specifically regulating health spas prior to this year’s introduction of Senate Bill 34, which became law September 1. The bill came about, say Anton Skell of Cosmopolitan Lady and Sonny Reser of President’s, when it became apparent that many health spas were taking chances with members’ money by preselling memberships before a club opened. Presales are a common and legitimate way to offset construction costs and attract attention to a new spa, but complaints have flooded in from people angry because the spas they bought memberships in weren’t opening by the announced date. Sometimes the club operators folded before the opening date, taking money from presold memberships with them and leaving clients with no recourse.
Under the new law, money collected from prepayments must be deposited in an escrow account and held there until 30 days after a spa opens. If the spa doesn’t open within six months after the first membership is sold or doesn’t remain open for 30 days, prepaid members are entitled to a full refund from the escrow account. The only catch is that this section of the bill excludes health spas that have been operating in Texas since before September 1 of this year as well as health spas that have been in business at least two years and are opening new locations.
Here are a few other specifics in the bill that you should keep in mind:
●The provisions in this particular bill apply only to “health spas,” which are defined by the state as “… a business primarily involved in the sale of memberships that provide the members instruction in a program of physical exercise or provide the members use of the facilities of the health spa for a program of physical exercise.” They don’t apply to tax-exempt organizations, private clubs owned and operated by members or physical rehabilitation centers.
●The health spa must file a registration statement with the Texas Department of Labor and Standards before selling a single membership. The registration should list all the specifics about the club, from who the owners are to the size of the club.
●The health spa must deliver a completed copy of a sales contract to the purchaser before the contract is signed. The contract cannot demand that you finance the membership or that you sign up for more than two years. The contract may contain a renewal option for as long as two additional years after the original contract expires.
●You can cancel the contract for any reason and receive a full refund by mailing a certified letter to the spa by midnight of the third business day after the day you sign the contract.
●You can cancel the contract if the health spa goes out of business and doesn’t provide a facility within 10 miles of the facility you belonged to or if the facility moves more than 10 miles away from the facility you were enrolled in. Again, send the club a written notice via certified mail.
●Your estate can cancel the contract if you die or become totally and permanently disabled after the date the contract takes effect. Your estate has to send a certified letter (including proof of your death) requesting cancellation of the contract, and the spa must give a partial refund (up to 50 percent) within 31 days of notification for the unused membership fee. If you’re disabled, the spa will need a letter of proof from your doctor.
●You have the right to see a full list of all the membership plans offered for sale by the health spa, and the spa can’t offer a special discount unless the discount is available to everyone. The salesperson can’t make a material misrepresentation about the qualifications of the staff, results obtained through exercise or other fitness programs, membership rights or the period during which a special discount is offered.
●The contract is likely to include a clause that says the health spa is not responsible for injuries you receive while on the premises. That’s true unless your injuries were caused by an unlawful act or practice by the health spa operator such as allowing members to use unsafe exercise equipment or not controlling the temperatures of the pool or saunas.
●If you stop going to the club, you can’t just stop paying your monthly membership fees. If you do this, the finance company that the health spa sold your contract to will report you to a credit bureau. If you stop paying your fees because you’re dissatisfied with the services that were promised, you can write a letter to the credit bureau explaining why you did not settle the account and your letter must appear in the credit file along with the finance company’s report.
If you have any doubts as to what your rights are when you sign a contract for membership in a Texas health club, write to the Texas Senate, Document Distribution, Capitol Station, P.O. Box 12068, Austin, Texas 78711 (512-475-2520) and ask for Senate Bill 34. Enclose a check for $2.68 and you’ll be mailed a copy of the bill the same day. The Bill Analysis section at the back will give a layman’s explanation, sans all the confusing legalese.
