The Grift
or Unjust Enrichment
Why Refunds Are Hard
It's not incompetence. It's not an accident. It's the business model.
The Economics of Friction
Every obstacle a company puts between you and a refund has a measurable effect. UX research shows that each additional step in a cancellation process significantly reduces completion rates—friction is a feature, not a bug.
The Friction Funnel
"The company keeps 95% of disputed revenue simply by making the process painful enough that people give up."
The Tactics They Use
How They Keep 95%
Every tactic is designed to make you give up. Each one they deploy increases their odds of keeping your money.
A benefit obtained at another's expense, without adequate compensation, which the law will not permit them to keep.
How Gyms Make Cancellation Painful
Here's actual language from a 24 Hour Fitness membership agreement (2025). These clauses are designed to trap you—and they're betting you won't keep proof.
"IF YOU WISH TO CANCEL THIS CONTRACT, WITHOUT PENALTY... THE NOTICE MUST BE MAILED BEFORE MIDNIGHT OF THE THIRD BUSINESS DAY AFTER YOU SIGN... TO: 24 HOUR FITNESS P.O. BOX 787, CARLSBAD, CA 92018."
"If you have a Recurring Fitness Service Agreement, YOU MAY NOT TERMINATE your Agreement during the 1 month initial term... you may request to cancel by providing WRITTEN NOTICE to: 24Hour Fitness, P.O. Box 787 Carlsbad, CA 92018."
"Each monthly payment under this Agreement is IMMEDIATELY EARNED by 24 Hour Fitness upon payment and is NON-REFUNDABLE."
The FTC has sued gyms for these exact tactics—requiring certified mail or in-person visits to cancel. FTC v. LA Fitness (2025)
The Arbitration Trap
Arbitration clauses were sold as "faster, cheaper dispute resolution." In practice, they're designed to make disputing economically irrational—and to prevent you from joining forces with other victims.
The Class Action Waiver
Buried in the fine print of virtually every gym, subscription, and service contract is language like this:
"You and Company agree that any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated, or representative action. You expressly waive your right to participate in a class action lawsuit or class-wide arbitration."
Why They Design for Arbitration
Actual language from a 24 Hour Fitness membership agreement (2025):
"YOU AGREE THAT ANY CLAIM... WILL BE DECIDED IN ARBITRATION RATHER THAN IN COURT. THIS MEANS THAT YOU AGREE TO GIVE UP YOUR RIGHT TO HAVE YOUR CLAIMS DECIDED IN COURT BY A JUDGE OR JURY."
"YOU AGREE THAT YOU WILL NOT MAKE ANY CLAIMS AGAINST THE 24 HOUR PARTIES AS A MEMBER OF ANY CLASS ACTION."
The Transfer Game
Ever notice how refund requests get bounced between departments? This isn't disorganization—it's strategy.
"I don't have the authority to process refunds. Let me transfer you to billing."
"This is a membership issue. You need to speak with our retention team."
"I can offer you a discount on your next month. For refunds, you need to speak with management."
"The manager isn't available right now. Can I take a message?"
Result: After 45 minutes on the phone, you've accomplished nothing. Most people don't call back.
The Fine Print Defense
Integration clauses, arbitration agreements, and class action waivers are designed to make your verbal interactions legally meaningless.
"This Agreement constitutes the entire agreement between the parties. Any prior representations, promises, or statements not contained herein shall not be binding upon the Company."
What They Claim
Any verbal promise an employee made doesn't count because you signed a contract.
The Reality
Fraud in the inducement, unconscionability, and ROSCA violations can override these clauses.
Amazon settlement for manipulative Prime enrollment tactics
FTC Press Release (September 2025)Dark Patterns: By Design
The FTC's international review of 642 subscription websites and apps (2024) found these tactics aren't accidents—they're deliberate design choices.
Most Common Dark Patterns
» Sneaking Practices
Hiding or delaying disclosure of material terms like early termination fees
Adobe sued by FTC (June 2024) for hidden ETF only visible via tiny info icon
Look for tiny info icons (ⓘ), grayed-out text, fees only shown at final checkout, or terms revealed after you've invested time in signup.
Sunk cost fallacy—after spending 10+ minutes on a signup form, you're less likely to abandon it over a fee you didn't expect. Cognitive load makes fine print invisible.
Screenshot every screen during signup. Search the page for '$', 'fee', 'charge', 'cancel' before completing. Email yourself the terms immediately.
» Roach Motel
Easy to sign up, extremely difficult to cancel
LA Fitness requires in-person visits or certified mail to cancel
One-click signup but no cancel button in account settings. Requirements for phone calls, in-person visits, or certified mail. "Call us to cancel" with no online option.
Exploits procrastination and friction fatigue. ICPEN found 70% of sites don't provide cancellation info. Most people won't take time off work to cancel a $30/month gym.
Use a virtual credit card with spending limits. Send cancellation via certified mail AND email (creates paper trail). In CA, use CARL—they must honor online cancellation requests.
» Forced Continuity
Auto-renewing subscriptions without clear notice
Free trials that silently convert to paid subscriptions
Pre-checked "auto-renew" boxes. Renewal dates buried in account settings. No reminder emails before charging. Free trials requiring payment info upfront.
Preys on optimism bias ("I'll remember to cancel") and status quo bias. C+R Research found 42% forget they're paying for unused services. Average person has 3+ unused subscriptions.
Set calendar reminders 3 days before trial ends. Use Privacy.com virtual cards with $1 limits for trials. Check bank statements monthly—dispute within 60 days.
» Confirm-Shaming
Using guilt or shame language on cancel buttons
"No thanks, I don't want to save money" or "I prefer to stay uninformed"
Cancel buttons with negative self-statements. "Are you sure?" popups implying you're making a mistake. Emotional language like "We'll miss you!" paired with obstacles.
Triggers loss aversion and social pressure. Nobody wants to click "I don't care about my health." Creates hesitation that leads to abandoning the cancellation attempt.
Recognize it as manipulation, not a real question about your values. The button text is designed by psychologists to stop you. Click it anyway—your decision is valid.
» Drip Pricing / Fee Disguising
Breaking prices into base + mandatory "fees" that look like taxes or government charges
Hotels adding "resort fees," "destination fees," or "facility charges" that aren't optional—50 state AGs have investigated hotel resort fees
Charges labeled "service fee," "convenience fee," "facility fee," "processing fee," or "administrative charge." Fees added at checkout that weren't in the advertised price. Anything that sounds like a tax but isn't government-mandated.
Exploits trust in authority—we're conditioned not to question "taxes" or "fees." Price anchoring makes the base price feel like the real cost. FTC estimates consumers waste 53 million hours/year trying to calculate true prices.
Ask "Is this fee government-mandated or company-mandated?" Only taxes, shipping, and truly optional add-ons can legally be excluded from total price (as of May 2025 FTC rule). Report drip pricing to FTC and your state AG.
» Support Theater / Phantom Support
Creating the illusion of customer support while ensuring it never resolves your issue
Comcast's "retention department" hold times averaged 1+ hours; calls mysteriously drop at 59 minutes. Chatbots loop through scripts but can't process cancellations.
Chatbots that only offer FAQ links, never a human. Phone menus with no "cancel" option. Calls that drop after long holds. "Technical difficulties" when requesting cancellation. Being told to "try again later" or call a different number.
Creates plausible deniability—"We have support!" while making actual resolution impossible. Each failed attempt costs you time and emotional energy. Most people give up after 2-3 attempts. Companies know exactly how long the average person will wait.
Document every attempt with timestamps and screenshots. Use social media (@company on Twitter/X)—public complaints get faster responses. File FTC and state AG complaints citing each failed contact attempt. In CA, email cancellation is legally binding under CARL.
» One-Way Communication
Using no-reply emails and unmonitored inboxes to prevent customers from responding to company communications
Billing notifications sent from [email protected]. Confirmation emails with no way to reply. "Contact us" forms that go nowhere.
Emails from "noreply@" or "donotreply@" addresses. Billing confirmations with no dispute link. Automated responses that don't address your question. Contact forms with no confirmation or ticket number.
Creates information asymmetry—they can communicate with you, but you can't communicate back. Breaks the natural "reply" instinct, forcing you to find a different channel. Each channel switch is another chance for you to give up.
Never rely on company contact forms—send certified mail to their registered agent (find via Secretary of State). CC their legal department. Keep copies of every no-reply email as evidence they made themselves unreachable. Under ROSCA, companies must provide a "simple mechanism" to cancel.
The Chargeback Window Trap
Companies deliberately drag out refund requests because there's a ticking clock. Once it expires, your options shrink dramatically.
The Clock They're Running Out
Federal Law (FCBA)
Hard deadline from statement date to dispute billing errors
Credit Card Networks
Visa, Mastercard may extend to 120 days—but your bank may not honor it
Debit Card Liability
Report fraud within 2 days or liability jumps from $50 to $500
Their Strategy
Every transfer, every "we'll look into it," every "please wait 3-5 business days" is designed to push you past that 60-day window. Once you're outside it:
- Banks may refuse to process your dispute
- FCBA protections no longer apply
- Your only options become small claims court or arbitration
Why Gyms Push for Direct Bank (ACH) Payments
Many gyms aggressively push you to pay via ACH (direct bank withdrawal) instead of credit or debit cards. This isn't a coincidence—it's by design.
- No chargeback rights: Unlike credit cards, there's no federal law requiring banks to reverse ACH payments
- Direct access to your account: They can pull money whenever they want, and you're left chasing refunds
- Weaker dispute process: Banks often tell you to "work it out with the merchant" for ACH disputes
- Lower fees for them: ACH costs gyms less than card processing—savings they keep, not pass on
💡 Tip: Always use a credit card for recurring gym payments. If they insist on ACH, that's a red flag.
Debit vs Credit: The Protection Gap
With a credit card, you dispute a charge and keep your money while the bank investigates. With a debit card, your money is already gone—and you're fighting to get it back.
Critical Difference
"With a credit card, if you dispute a charge, it is taken off the record. With a debit card, you are fighting to get your funds back into your account." — Consumer Action
of gym memberships go completely unused—"phantom members" who keep paying
IHRSA Health Club Industry DataThe Scale of the Problem
This isn't a few bad actors. These practices are industry-wide, affecting millions of consumers and generating billions in ill-gotten revenue.
FTC Complaints
About subscription cancellation
Free Trial Complaints
BBB study (2015-2017)
Consumer Losses
Free trial schemes (10 years)
Average Loss
Per negative option incident
of consumers cancel within 3 months
Over half cancel within 6 months — McKinsey research shows companies know most subscriptions aren't wanted long-term
Sources: BBB Free Trial Scams Study • NPR/FTC • Retail Dive/McKinsey
US gym and fitness industry market size—built on phantom members
IHRSA / IBISWorld Industry ReportRecent Enforcement Actions
Regulators are catching up. These settlements and lawsuits prove these aren't one-off mistakes—they're systemic practices being legally challenged.
Continued charging dues after cancellation notices (class action)
Manipulative enrollment and cancellation flows
Hidden fees, deceptive "$0 delivery" claims, difficult Grubhub+ cancellation
Deceptive platform, no simple way to cancel paid memberships
Hidden early termination fees
In-person/certified mail cancellation requirements
Federal Courts Sided With Corporate Profits Over Consumers
The "Click-to-Cancel" Rule Was Struck Down
What Happened
In October 2024, the FTC finalized a rule requiring that cancelling must be as easy as signing up.
In July 2025, the 8th Circuit Court of Appeals vacated the entire rule on procedural grounds—not because consumer protection is wrong, but because the FTC didn't follow the right paperwork process.
The corporations won on a technicality.
What This Means For You
- Companies can legally require certified mail, in-person visits, or phone calls to cancel
- No federal requirement for "one-click" cancellation
- Dark patterns in cancellation flows remain unregulated at federal level
- The "Click-to-Cancel Act" introduced to Congress but not passed
- The Federal Arbitration Act actually works AGAINST consumers by upholding forced arbitration clauses
"The government sided with corporations over consumers. The rule that would have stopped these predatory cancellation practices was killed—not because it was wrong, but because of paperwork."
This is why companies continue to make cancellation difficult. They know they can get away with it.
Ready to Take Action?
Their model depends on your silence. Break it. Document your story, join others, and make them pay—literally.