"There Is a Way to Get a Refund for a Gym You Used for Only a Month"...Why "It’s Written in the Contract" Is Misleading [Misunderstandings About Money]

Editor's noteMoney-related issues are some of the most common problems people face in daily life, yet it is often difficult to know the exact standards that apply. Many people suffer unnecessary losses because they rely on long-standing practices or inaccurate information. [Misconceptions About Money] organizes common misunderstandings about everyday financial matters such as taxes, fees, contracts, and refunds, based on public data and official standards.

People frequently encounter money-related issues in everyday life, but not many actually know the precise standards that apply. Penalty fees for cancelling contracts are also widely taken for granted, even though they often differ from the actual systems and regulations in place.

The same is true for gyms, telecommunications services, online courses, and various subscription services. When you try to terminate a contract in the middle of the term, the first thing you usually hear is that "a penalty fee will be charged." Because you have already signed the contract, it is easy to assume there is no other choice, but early termination fees are not always accepted as they are. Misconceptions and facts on this topic have been整理ed below, based on public data and official standards.

If it is written in the contract, do you always have to pay the penalty fee?

Many consumers believe that if a penalty clause is specified in the contract, they must pay it without exception. However, even if it is part of the contract, any clause that conflicts with relevant laws or consumer protection standards can be restricted.

AI-generated illustration. ChatGPT

Gyms are a typical example of such disputes. According to damage relief cases filed with the Korea Consumer Agency, there are repeated cases in which consumers who purchased long-term memberships later requested cancellation for personal reasons, but the business operator refused, saying "special discount products are non-refundable," or demanded the entire remaining-period usage fee as a penalty.

For example, a consumer may sign up for a 12?month membership at a discounted price and then request cancellation after only one or two months, only to find that the gym recalculates the penalty based on the regular price, leaving almost no amount to be refunded. Even if there is a clause in the contract, whether the penalty exceeds the actual scope of damage can become a separate point of contention.

An early termination fee is closer in nature to "compensation for damages" arising from non-fulfillment of a contract than to a "fine." Therefore, amounts that are set excessively high and are unrelated to actual damage are sometimes reduced or adjusted during dispute mediation.

So what should consumers do when a dispute arises? The starting point is to check how the penalty is calculated as specified in the contract and the terms and conditions, and to ask the business operator to provide the calculation basis. If the verbal explanation differs from the written contract, it helps to secure supporting evidence such as text messages, recorded calls, or written notices.

If negotiations with the business operator do not proceed smoothly, consumers can pursue a mediation process through consumer counseling. By applying for dispute mediation through the Korea Consumer Agency or consumer counseling centers at local governments, they can have the fairness of the terms and the reasonableness of the penalty level reviewed.

Although dispute mediation is not legally binding, in many cases it serves as a channel that leads to a settlement. This means that, rather than immediately accepting full payment just because it is written in the contract, consumers need to go through the process of checking the calculation standards and legal grounds.

Can business operators set early termination fees however they want?

Early termination fees vary depending on the contract, but they are not set without any standards. In electronic commerce or door-to-door sales, for instance, regulations allow consumers to withdraw their subscription within a certain period, and during this period, contracts can sometimes be cancelled without any separate penalty.

The amount the consumer bears can also differ depending on whether the cancellation occurs before service use begins or after partial use. In some industries, standards require that the amount corresponding to the period of use and a reasonable level of penalty be deducted from the total contract amount, and the remainder be refunded.

Fair Trade Commission CI. Fair Trade Commission

In fact, the Fair Trade Commission has reviewed the terms and conditions of long-term contract industries such as sports facilities and private academies, and has ordered corrective measures for clauses that excessively restrict early termination or make refunds virtually impossible. In other words, phrases such as "promotional products are non-refundable" are not always valid.

Ultimately, what matters is not simply whether the word "penalty" appears in the contract, but whether the method and scope of its calculation are reasonable. Checking in advance how penalty fees are calculated and how refunds are handled is the first step to reducing disputes when entering into a contract.