Annual Fees, Card Surcharges, and Getting Out of a Gym Contract in Minnesota

You can cancel a Minnesota club membership outright in the first three business days, and the statute entitles you to a refund of the entire consideration within ten days. After that you can still terminate at any time, and the club may not charge you a fee for doing it. That second right is new — it took effect January 1, 2025 — and it is the one almost nobody knows about.

I am going to read you the statutes. There are six of them, they sit in different chapters, and they do different jobs: one decides what counts as a “prepayment,” one gives you the exit, one dictates the paragraph your contract has to print, one caps a credit-card surcharge at five percent, one governs whether the price the gym advertised was honest, and one gives you the right to sue and collect your attorney fees. I want to be precise about which is which, because a gym that broke one of them has very likely not broken the others.

The law calls your annual fee a “prepayment,” whatever the contract calls it

Start with the definition, because the whole chapter runs on it. Minn. Stat. § 325G.23, subd. 8:

“Prepayment” means any payment over $50 for service or merchandise made before the service is rendered or the merchandise is received. The term “prepayment” includes, but is not limited to, the payment of any service fee, initiation fee, application fee, administrative fee, deposit fee, processing fee, enrollment fee, maintenance fee, or similar fee no matter how the fee is denominated. It is not a prepayment if a payment for service is made on the same day the service is rendered. . . .

Eight fee names, then the catch-all: “or similar fee no matter how the fee is denominated.” My reading is that the legislature saw the renaming game coming and shut it down in the definitions section, before the operative provisions ever start. If your gym charges $49 every March and calls it an annual fee, a facility fee, a maintenance fee or a club-improvement fee, the label does no work. What matters is whether it is over $50 and whether it was paid before the service was rendered.

That definition does two things. It decides the size of the surety bond the club has to post under § 325G.27, and it decides what has to come back to you if you cancel in the first three days.

Three business days to cancel, ten days to be paid

Minn. Stat. § 325G.24, subd. 1(a):

Any person who has elected to become a member of a club may unilaterally cancel such membership, in the person’s exclusive discretion, by giving notice of cancellation at any time before midnight of the third business day following the date on which membership was attained.

“[I]n the person’s exclusive discretion.” No reason required, no hardship showing, no manager’s approval. If you mail the notice, subd. 1(b) makes it effective on deposit in the mailbox, properly addressed and postage prepaid — not on the club’s receipt, which matters if anyone later argues about the date.

And the money, subd. 1(c):

Cancellation under this subdivision shall be without liability on the part of the member and the member shall be entitled to a refund, within ten days after notice of cancellation is given, of the entire consideration paid for the contract.

The entire consideration. Not the dues net of an enrollment fee. Not a prorated figure. Ten days, running from when you gave notice, not from when the club got around to processing it.

“Business day” is defined in § 325G.23, subd. 9 as any day other than a Saturday, Sunday, or holiday as defined in section 645.44. Sign on a Friday and the third business day is the following Wednesday.

After three days, you can still terminate — and the club may not charge you for it

This is the part that changed. Minn. Stat. § 325G.24, subd. 2(a):

Any person who has elected to become a member of a club may unilaterally terminate such membership, in the person’s exclusive discretion, by giving notice of termination at any time.

At any time. And then subd. 2(c), the sentence that matters most in this article:

A club must not impose a termination fee or any other liability on the member for termination under this subdivision.

“[O]r any other liability” is broader than the fee, and I read it to reach every device a club uses to make leaving expensive. A buyout of the remaining months is a liability. An acceleration of the balance is a liability. A charge styled as “liquidated damages” for early cancellation is a liability. The statute does not distinguish among them.

When termination takes effect depends on what kind of membership you bought, and the rule here was amended in 2025. Subdivision 2(d) now reads:

Termination under this subdivision is effective at the end of the membership term in which the member provides the notice of termination. If membership is at-will without a defined membership term, then termination under this subdivision is effective no later than 30 days after the date of a verified consumer’s notice of termination. If the member indicates a future effective date of termination beyond those set forth herein, the date indicated by the member is the effective date of termination.

I want you to read that carefully, because it moved against consumers. As enacted in 2024, an at-will membership terminated immediately on notice. Laws 2025, First Special Session, chapter 4, article 7, section 31 replaced “immediately” with “no later than 30 days after the date of a verified consumer’s notice of termination.” That amendment is effective July 1, 2025 and applies to contracts entered into, modified, or renewed on or after that date. So a month-to-month member who gave notice in March 2025 had an immediate termination; one who signed in August 2025 and gave notice this month may be billed for up to thirty more days. Both readings are correct — for different contracts.

One more piece. Subdivision 2(e) says that if you give a termination notice within the first three business days, the club must treat it as a cancellation notice under subdivision 1 — which is the version that gets your money back — unless you specifically asked for a future effective date. You do not lose the refund by using the wrong word.

How the notice may be given

Subdivision 3(a) lists the methods a club must accept: verbally, including in person or over the telephone to customer or account service members; in writing, including by mail, email, or an online message through the club’s website directed to customer or account service members; through a termination election as described in section 325G.60; or

in any other manner or medium by which the member initially accepted membership to the club and that is no more burdensome to the member than was the initial acceptance.

That last clause is the anti-runaround provision. If you joined on a phone screen in four taps, the club cannot require a certified letter to leave. And subd. 3(b): “The process to cancel must be stated clearly and be easily accessible and completed with ease.”

Subdivision 4 closes the loop: “A right of cancellation or right of termination under this section may not be waived or otherwise surrendered.” A clause in the membership agreement purporting to waive either right is void by the statute’s own terms.

Dates. The termination right, the fee bar and the notice-method list all came in through Laws 2024, chapter 114, article 3, section 53, whose effective-date clause reads: “This section is effective January 1, 2025, and applies to contracts entered into, modified, or renewed on or after that date.” A contract signed in 2023 and left untouched is outside it. A 2023 contract that was modified or renewed in 2025 is inside it — renewal counts.

The paragraph your contract was supposed to print

Minn. Stat. § 325G.25, subd. 1 requires that a copy of every contract be delivered to the member when it is signed, that it be in writing and signed by the member, that it designate the date the member signed, and that it state — “clearly and conspicuously in boldface type of a minimum size of 14 points” — three headed blocks: “MEMBERS’ RIGHT TO CANCEL,” “MEMBERS’ RIGHT TO UNILATERAL TERMINATION,” and “NOTICE INFORMATION.” The statute prints the exact words. The termination block ends:

The club may not impose a termination fee or any other liability on you for termination.

The notice-information block requires the club to fill in its own mailing address, telephone number, email address and website address for notices.

Expect a mismatch in that block if you signed in 2025. The paragraph § 325G.25, subd. 1 still orders clubs to print tells the member that “your membership will terminate immediately, unless you indicate a future effective date of termination” — the rule as it stood when the 2024 act passed. The 2025 special-session amendment moved § 325G.24, subd. 2(d) to the 30-day rule for at-will memberships and left § 325G.25 alone, so a 2025 contract can carry printed language the operative subdivision no longer matches.

The consequence of leaving it out is in subdivision 2, and it is short:

Every contract which does not contain the notice specified in this section may be canceled by the member at any time by giving notice of cancellation by any means.

Not terminated at any time — canceled at any time. Cancellation is the subdivision 1 track, and subdivision 1(c) is the one with the refund of the entire consideration within ten days. A club that omitted the required notice from a contract signed, modified or renewed on or after January 1, 2025 has left that door open indefinitely. Section 325G.25, subdivision 1 was amended by the same 2024 act, section 54, carrying the identical effective-date clause.

Two more provisions in the neighborhood that come up constantly. Section 325G.26: “No contract shall be valid for a term longer than 18 months from the date upon which the contract is signed,” with a conversion to a longer term permitted only after six months of membership, and the duration disclosed in the contract in 14-point boldface. And § 325G.27, which requires every buying, health, or social referral club doing business in Minnesota to register with the attorney general, pay $250 at registration and $150 each September 1 after, and maintain a surety bond “in an amount not less than the aggregate value of outstanding liabilities to members” — capped at $200,000 regardless of the number of facilities. If your club closed and took your prepaid year with it, § 325G.27, subd. 3 is the claim route, and the deadline is unforgiving: “no later than one year from the date on which the facility closed or bankruptcy was filed.”

Who is outside all of this

Here is the concession, and it is a real one. Section 325G.23, subd. 4 defines “health club,” and then:

The term does not include any nonprofit organizations, any private club owned and operated by its members, or any facility operated by the state or any of its political subdivisions.

A nonprofit fitness organization is outside §§ 325G.23 to 325G.28 entirely. So is a member-owned private club, and so is a city or county recreation center. If that is where you work out, none of the cancellation rights, the notice requirements, the bond, or the private remedy in this article reach you. Other consumer statutes may — the price-display rule below is in a different chapter and has no such exclusion — but this chapter does not.

The remedy: damages, costs, and your attorney fees

Minn. Stat. § 325G.28, subd. 2:

In addition to the remedies otherwise provided by law, any person injured by a violation of any of the provisions of sections 325G.23 to 325G.28, may bring a civil action and recover damages, together with costs and disbursements, including reasonable attorney’s fees, and receive other equitable relief as determined by the court.

“[A]ny person injured.” Not “a consumer,” not “a person who can show a public benefit.” Damages, costs, and reasonable attorney’s fees, without a willfulness element and without a discretionary “may award” qualifier on the fees. That is a cleaner fee entitlement than most of Minnesota consumer law offers. Fee-shifting is what makes a small-dollar consumer statute enforceable at all — without it, the cost of proving a $49 charge runs past the $49. Which statute a charge falls under therefore decides whether the statute has any practical teeth, and this chapter’s span is §§ 325G.23 to 325G.28 and nothing else.

The attorney general has separate authority under subdivision 1, including a civil penalty in an amount set by the court, not in excess of $25,000, and, where a club is insolvent or has failed to maintain its bond, an order appointing a receiver.

Card surcharges: five percent, and never the store’s own card

Different statute, different chapter, different remedy. Minn. Stat. § 325G.051, subd. 1(a) permits a seller or lessor doing business in Minnesota to surcharge a customer who elects to use a credit or charge card instead of cash or check — but only on conditions that track how the sale was made, plus a cap that applies to all of them:

(1) if the sale or lease of goods or services is processed in person, the seller or lessor informs the customer of the surcharge both orally at the time of sale and by a sign conspicuously posted on the seller’s or lessor’s premises;

(2) if the sale or lease of goods or services is processed through a website or mobile device, the seller or lessor informs the customer of the surcharge by conspicuously posting a surcharge notice during the sale, at the point of sale, on the customer order summary, or on the checkout page of the website;

(3) if the sale or lease of services is processed over the telephone, the seller or lessor informs the customer of the surcharge orally; and

(4) the surcharge does not exceed five percent of the purchase price.

The disclosure obligation tracks the channel. In person it is both oral notice and a conspicuously posted sign — one without the other does not comply. Online it is a notice during the sale, at the point of sale, on the order summary, or on the checkout page. By telephone, for services, it is oral — clause (3) reaches the sale or lease of services processed over the telephone, while clauses (1) and (2) reach goods or services. And across every channel, the cap is five percent of the purchase price. A 2.5 percent card fee on monthly dues complies with clause (4); a six percent one does not, no matter how well disclosed.

Paragraph (b) is an absolute bar rather than a condition: a seller or lessor “that establishes and is responsible for the seller or lessor’s own customer credit or charge card may not impose a surcharge on a customer who elects to use that credit or charge card in lieu of payment by cash, check, or similar means.” A branded club credit card cannot carry a surcharge at all.

Paragraph (c) carves out the cash discount. A discount offered to customers who pay by cash or check is not a “surcharge” — if it is offered to all prospective customers and its availability is clearly and conspicuously disclosed to all of them. And paragraph (d): “This subdivision applies to an agent of a seller or lessor,” which reaches the billing processor as well as the club.

Now the honest part. Subdivision 2 reads in full:

A seller who violates this section is subject to a civil penalty of not more than $500 and shall refund the surcharge to each buyer.

That is the entire remedy section. It provides a civil penalty and a refund. It does not say who may sue, it does not create a private cause of action in terms, and it contains no fee-shifting provision. On the face of the statute, I do not read § 325G.051 as a section a consumer sues on for damages. Where I think it does work is as evidence — an unlawful surcharge is conduct a court can measure against the broader consumer-fraud statutes, and § 325G.28’s private remedy reaches violations of §§ 325G.23 to 325G.28, a different span of sections that does not include § 325G.051. I am telling you that so you do not read “five percent” and assume a lawsuit follows from the number alone.

The advertised monthly rate and the annual fee nobody mentioned

The last statute is the newest and it governs the advertisement, not the contract. Minn. Stat. § 325D.44, subd. 1a(a):

A person engages in a deceptive trade practice when, in the course of business, vocation, or occupation, the person advertises, displays, or offers a price for goods or services that does not include all mandatory fees or surcharges.

And subd. 1a(b) defines the term:

For purposes of this subdivision, “mandatory fee” includes but is not limited to a fee or surcharge that:

(1) must be paid in order to purchase the goods or services being advertised;

(2) is not reasonably avoidable by the consumer; or

(3) a reasonable person would expect to be included in the purchase of the goods or services being advertised.

Note the “or” at the end of clause (2). The three prongs are disjunctive. A fee that satisfies any one of them is a mandatory fee. (The attorney general’s own Frequently Asked Questions About Minnesota’s New Price Transparency Law, revised April 2025, renders the same three prongs joined by “and.” The statute says “or,” and the statute governs.)

Apply it to a gym that advertises “$15/mo” and then debits $49 once a year. That annual fee is not optional — you cannot buy the membership without agreeing to it — so it satisfies prong (1) on its own terms, and prongs (2) and (3) besides. I read subdivision 1a(a) to require that the advertised price include it. The statute reaches the display: the join page, the window sign, the mailer, the app screen.

The limits are real. Subdivision 1a(a) itself provides that where the person disseminating an advertisement is independent of the advertiser, that person is not liable for the content. The definition excludes “taxes imposed by a government entity on the sale, use, purchase, receipt, or delivery of the goods or services” — taxes, not fees. Subdivision 1a takes effect January 1, 2025 by the effective-date clause of Laws 2024, chapter 111, sections 1 and 2: “This section is effective January 1, 2025, except that this section is effective June 1, 2025, for industries where the prices are regulated by the Metropolitan Airports Commission.” Conduct before those dates is not a subdivision 1a violation. And the attorney general’s FAQ takes the position that the law is not retroactive and does not apply to a contract signed before January 1, 2025 regardless of when performance finishes — that is the AG’s stated view, not a court’s holding, but a business will quote it.

The card surcharge sits differently under this statute than the annual fee does. The AG’s FAQ answers the question directly: “If the credit card surcharge is an optional charge, meaning a consumer could reasonably avoid the surcharge by paying with cash, then this credit card surcharge is not a ‘mandatory fee’ under the law and the surcharge would not need to be included in the total price that is advertised, displayed, or offered.” An avoidable surcharge and an unavoidable annual fee are not the same problem.

Auto-renewal, briefly — and the shelter the seller gets

Sections 325G.56 to 325G.63 govern automatic renewal and continuous service, and by their own definitions they reach gyms: § 325G.56 defines “seller” to include “a club as defined in section 325G.23,” and defines “indefinite subscription agreement” to include contracts as defined in § 325G.23 that are subject to automatic renewal or continuous service.

The duties are front-loaded and back-loaded. Section 325G.57, subd. 1 requires the offer terms to be presented clearly and conspicuously before the consumer accepts, in visual proximity to the offer’s proposal. Subdivision 2 requires a retainable confirmation after acceptance, carrying the offer terms, free-trial cancellation information, and termination options that are “easy to use, cost-effective, and timely.” Subdivision 3 makes a material change to the terms without prior clear-and-conspicuous notice “void and unenforceable.” Subdivision 5 requires written notice of continuous service at least once per calendar year by mail or email. And § 325G.60, subd. 2 requires a seller whose website has profile or subscription-management capability to put a termination election on that website — clear, conspicuous, plain-language, requiring only information necessary to process the termination, with “a checkbox, submission button, or similarly common and simple mechanism.”

Now the concession the reader is owed. Section 325G.63, in its entirety:

A seller is not subject to civil penalties if the seller has made a good faith effort to comply with each applicable provision of sections 325G.56 to 325G.61.

A good-faith effort shelters the seller from civil penalties. Whether it shelters anything else is a question the sentence does not answer.

I looked for court decisions interpreting section 325G.63 on September 18, 2026 and found none. That search covered the Minnesota Supreme Court, the Minnesota Court of Appeals, the federal district court in Minnesota and the Eighth Circuit in one free case-law database. It is not exhaustive, and finding no decision is not the same as knowing how a court would rule.

I want to emphasize that this provision cuts against the reader: a gym that got most of the auto-renewal machinery right and one piece wrong has a statutory argument handed to it by the legislature. Section 325G.62 adds a list of businesses the auto-renewal sections do not reach at all, including contracts governed by another state or federal statute specifically intended to regulate automatic renewal, certain insurance licensees and affiliates, technology system contractors and power limited technicians licensed by the Department of Labor and Industry, any service provided by a business or affiliate licensed or regulated by the Public Utilities Commission, the FCC or FERC, and persons registered with FINRA, the SEC or under the Minnesota Securities Act. Sections 325G.56 to 325G.63 carry the same date as the club amendments: effective January 1, 2025, applying to contracts entered into, modified, or renewed on or after that date.

What this article is and is not

Everything above is a reading of the statutes, quoted from the Minnesota Office of the Revisor of Statutes and checked on September 18, 2026. It is a description of the machinery. It is not advice about your membership, your contract, or your charge, and nobody at this firm has looked at your documents.

Minnesota Junk Fees is published by Madgett Law, LLC. We are a law firm, and we are looking at whether Minnesota fee practices of this kind can be challenged on behalf of the people who paid them. If you joined, modified or renewed a Minnesota club membership on or after January 1, 2025, the call-out below says what documents make that possible to evaluate.