The gym which I hardly go to sends me frequent emails which may finally push me to cancel my membership.  Here is one of the more interesting emails I got:

“We replace about 3,000 towels per month, and while roughly 10% of these are taken out of circulation by us because they are no longer suitable for use, the remaining 90% leave the building and don’t come back. 3,000 new towels a month, especially with the rapidly rising cost of cotton, adds up quickly to an amount of money that we should be spending on things like equipment upgrades and the provision of scholarships to our youth. Here are the steps we plan to take:

  1. Starting August 8th, two towels per visit will be available to any member who wants them at the Front Desk. This will be the only place where towels are available. The Y will reduce its buying to 1,500 towels a month. Our card scans at the Front Desk tell us this is enough to give everyone working out here two towels per visit.
  2. Buying will be capped at that 1,500 per month figure, so if towels are not returned we could run out and members working out later in the month would not be able to get towels. Returning your towels before leaving the Y will ensure that this does not happen.”

At first blush, it seems elementary economic theory predicts this plan will fail.  The gym is using collective punishment to give incentives.  If I take the towel home by mistake (they are too grotty to steal!), the chance of being pivotal in the towel service cancellation decision is small. So, while I’ll take a little bit more care to leave the towel, it’s not going to affect my incentives significantly.  Everyone will think the same way and later on the month we will all be bringing our own towels to the gym.

Once we all stop going at the end of the month, as taking your own towel adds yet another impediment to gym attendance, the gym will get the dream member who does not turn up but pays the dues.  Is this their dastardly plan after all?

Here is a possible solution:  Everyone gets two towels when they turn in their gym ID at the front desk.  They get the ID back if they return two towels when they leave.  Otherwise they pay a fine. This does unfortunately create an incentive to steal a towel from someone else if you happen to lose your towel.  But I think it’s still worth trying.

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