Businesses Shouldn't be Immune to Compassion
The Fitness Industry Needs Support Not Price Gouging and Money Distancing
After yesterday’s post on MindBody Online’s money distancing moves, now we have this from Wodify:
We’re writing to inform you that, due to the uncertainty and economic impact of COVID-19, there has been an increase in risk for fitness businesses related to member chargebacks, refund requests, and fraud. As a measure to mitigate yours and Wodify’s shared risk and to follow industry best practice guidelines we are adjusting the Wodify Payments payout period to address this.
To help ensure you can cover any further increase in refunds or chargebacks, your Wodify Payments payout timing will be changed to 14 days, effective immediately. This means that funds processed through Wodify Payments will be available 14 days after the payment is made. You are still able to process payments through Wodify and you will get payouts daily, the only change is to the length of time it will take for funds to be deposited into your bank account.
Our risk team is increasing account monitoring procedures and if there is an increase in your refund rate and/or chargebacks there will be a review process and we will request additional information from you about your business. In some cases, payouts may be withheld until additional information is provided.
As a best practice to avoid triggering any warnings requiring further investigation into your account, please follow these best practices:
Only run membership charges that you feel confident are not going to need to be refunded to your members. Ensure you’ve clearly communicated to your members that their membership fee will be charged and what you’re offering in lieu of having access to a physical location (e.g. virtual classes, online coaching, etc.)
Do not resort to transactions deemed “risky”. These include large transactions outside of your normal business routine, and the selling of prepaid long-term memberships.
Learn more about these changes in the Wodify Payments COVID-19 Adjustments to Payout Schedule help article.
We understand that this is not ideal for your business, but unfortunately with the volume of transactions Wodify processes on a daily basis, we need to ensure that all gyms using Wodify Payments are in a position to cover the increased business risk. The 14 day period is an industry-standard during this time and we hope to return to the normal payout timing as soon as possible.
We will follow up with more information and updates as they become available.
The Wodify Team
Not only is this letter ham-fisted and tone-deaf, but it is misleading. The industry standard that it references is a Stripe document that lays out its payout processes. It’s pretty standard for Stripe. So, the question arises, is Wodify telling all its client-base that they are high-risk or has Wodify been identified as high-risk and is, thus, passing down its own problems.
It doesn’t really matter because either option is cause for alarm and Wodify should have shown more transparency. This is a big Eff U email.
These large platforms are taking advantage of their control over a large number of smaller businesses to mitigate their own risks knowing that no single small business in their charge is able to do anything about it.
You built them up. You made them successful. They get to keep their business if most of you go out of business. They don’t suffer any penalty. And, they can reduce that risk upfront while holding on to your money.
It should be up to Wodify to assess individual risks and protect clients of good-standing. Why should everyone pay for the fact that the company is not willing or prepared to weed out the real problem makers? That’s not what everyone signed up for when they put their faith in the company.
Price Gouging Has to Have Consequences
In the same vein, we are hearing that equipment vendors and suppliers are increasing prices just because they can.
Everyone is free to do what they want in setting prices, but if a business has no need to increase prices when times are tough, knowing that everyone, literally everyone, is hurting right now, they should be called out and no one should forget their actions when this is all over.
This isn’t political or personal. It should be quite clear that we, as humans, should care about each other and make that our number one priority when circumstances are unprecedented and uncertain. Businesses shouldn’t be immune from compassion, conscience, and responsibility to society, especially when their customers have the most to lose right now.
The platforms that have benefited from small businesses and the self-employed in the fitness industry should step up or just go away. It’s not that difficult to make a decision to the right thing.