Just before the start of this year, 33-year-old Luo Jing finally used up the balance on his over 5,000-yuan ($690) hair salon prepaid card and decided never to recharge the card again.

These prepaid cards often cost several thousand yuan, but the hairstylists' skills are often just about average, nowhere near the tall claims they make while selling the cards.

There are enough reasons now to regulate the prepaid card market, as these cards are often sold after making tall claims with no corresponding increase in service quality, coupled with the constant risk of such establishments shutting down even before all the customers who were sold the cards have made use of what they paid for, or customers going elsewhere for the service with money left on the card.

Many young people such as Luo are now tired of salespersons trying to sell them prepaid cards for hair and beauty salons and/or gyms. They are abandoning such prepaid cards in favor of a more direct pay-per-service model.

Luo, who is from Jiangsu province, has been living in Beijing since graduating from university about 10 years ago.

He works for an internet company in Beijing and earns a decent monthly income.

In May 2022, he once went for a haircut to a branded salon near his apartment in Chaoyang district.

On entering the newly decorated salon, the staff members immediately stood up to welcome him.

They then began selling him the prepaid service packages they had, offering 30 percent off all services if he bought a 3,000-yuan card and 50 percent off for a 5,000-yuan card.

Luo ignored their offers, stating he just wanted the cheapest service they offered — a 68-yuan hair wash and haircut.

However, he was told that the stylist providing the 68-yuan service was on leave, leaving only the 108-yuan and higher price options, which he accepted reluctantly.

While he was getting his haircut, Luo asked the stylist what was different about the three differently-priced haircuts.

He was told that the differences were merely nominal. It was all about who cuts the hair, the "store director", "chief hairstylist", or the "store manager".

He ultimately found out that the quality of service was similar across the board.

When it was time to pay, after a persistent sales pitch and assurances that his card would be valid across all city branches of the brand and he would receive priority service and discount as a card-holder, he bought himself a 5,000-yuan prepaid card.

Reasons for abandoning it

Luo has visited a few hair salons by now and is familiar with the pattern: salespersons greeting you, staff communicating over walkie-talkie headsets and looking for opportunities to push prepaid cards or expensive services.

Another feature common to these, often "flashy", salons is the absence of the lowest-tier hairstylist. Once Luo visited another branch of the branded salon he had bought the prepaid card from and asked for the cheapest haircut. He was once again told that the lowest-tier hairstylist was not available that day and was referred to a higher-priced hairstylist.

Frustrated, he argued that at least one hairstylist for each tier listed should be available.

Otherwise, customers were unnecessarily being forced to upgrade or waste a trip. After his complaint, the store manager apologized and he was provided the service at the lowest price.

On the second day of the second lunar month, known as Dragon Raising Head Day in China — a day in which people have haircuts in the belief that it brings good luck — Luo went early to a salon, expecting priority service as a card-holder.

To his dismay, he had to queue up like everyone else. He argued multiple times with the staff members, but all they could say was that everyone had to wait because they were all registered members.

He spent the entire morning at the salon, realizing that the so-called membership was a joke, and all supposed member benefits nonexistent.

Later that day he heard from his colleague, whose haircut at a street-corner barber shop cost him just 15 yuan.

The decent haircut his colleague got, and the fact that several branches of the branded salon he went to shut shop over the year, further cemented his decision to switch to these more affordable establishments once he had exhausted his prepaid card balance.

Over time he tried haircuts, perms and dyeing at various branches of the salon, only to find out that the costs remained high even after the "discount" and his balance was getting depleted quickly.

He also noticed some strange aspects, such as the hairstylists were being hired randomly and quitting or being asked to leave suddenly, the hairstylists' fees were unilaterally determined with there being no way for customers to check if they were indeed "store directors", "chief hairstylists", or "store managers".

Almost every time he got his hair done, while checking out, he would be told of an ongoing promotion or celebration — everything said with the intention of making him recharge his prepaid card.

One time a staff member, after scrutinizing his receipt, told him, "You don't have much balance left on your card — how about topping it up?"

"These imperfect services and the poor attitude of the staff are one of the main reasons I stopped using such prepaid card services. Moreover, after several visits to affordable hair salons and convenient barber spots in the parks, I found myself enjoying this style where everyone queues up conscientiously and casually chats with each other, and the price is also very affordable," he said.

"I think this shift in consumption habit is largely because of a change in my own mindset, and I really like this change."

Risks identified

Zhai Yisen, 30, works for a public relations firm in Beijing's Chaoyang district and is a fitness freak. When he was 26, he spent 4,500 yuan on the annual membership card of a multi-branch gym.

In the following years, he switched between different branches, purchasing annual or monthly memberships.

However, soon his job required him to travel between cities or work overtime, because of which his visits to the gym decreased. After his membership expired earlier this year, Zhai decided not to renew it.

"There was a period when I was away on business trips for nearly four months a year. The card was hardly used during that period. I felt like I was wasting money. I didn't recharge it this year, as two of the gyms I used to go to have shut down. Friends who also used the gym are complaining about not being able to use up the money on their cards or get a refund," he said.

According to the "2022 China Fitness Industry Report" published by GymSquare, "pay-pervisit" has risen to become the second-largest payment method in the fitness industry at 36 percent, just behind long-term payment models of over a year.

The higher an individual's monthly income, the more likely they are to prefer pay-per-visit options.

Besides, in February last year, the China Consumers Association released the analysis of complaints handled by national consumers associations in 2022, showing that "shutdown" disputes caused significant consumer losses.

Closures or deliberate scams by fitness centers, cinemas, and educational institutions led to strong consumer dissatisfaction.

Such membership cards are essentially a form of prepaid consumption, Zhai said.

Businesses attract consumers to park their money with them by offering them discounts.

This allows businesses to alleviate cash flow pressures. However, while consumers receive discounts, they also face risks.

In fact, in the fitness industry, where prepaid cards and memberships are common, consumers' interests remain unprotected, as problems arise and they are left with no recourse.

When buying such prepaid packages, the establishments often offer significant discounts to lure them into buying longer duration membership.

Sometimes, when selling memberships, the cost of an annual membership is only slightly more than a six-month membership, enticing consumers with this "cost-effectiveness" while overlooking potential risks, he said.

Zhai said fitness freaks like him have become smarter now, not falling for glib-talking salespersons who try to lure them into buying any package.

"I think most young people are now careful, choosing products that offer better value for money. Once the content promoted in advertisements is found to be unrealistic, it tends to be quickly abandoned," he said.

"These changes have become quite apparent nowadays. After all, finding a job and earning money is not easy these days. Besides meeting basic needs, other upgraded consumption is just an optional choice."

yangzekun@chinadaily.com.cn