This or That: Packages or per-pay-visit for beauty and wellness services?

smiling therapist. Picture this as you close your eyes and start to unwind the therapist explains the service you are about to receive and then comes the sales pitch. Would you like to purchase a package? She says a one off massage of facial treatment is not going to deliver overnight results. Sound familiar. Plus she says you'll get a better deal in the long run

and guess what? The selling does not stop there because even after fobbing off the therapist, you still have to deal with the receptionist who is now going through her sales pitch and it's a package to cater to every budget. This package model is practiced by most wellness and beauty establishments with the promise of being more cost effective than

buying single purchases or a la carte. What I want to know is do packages always make better financial sense or should people be careful and stick to pay per visit in case the business shuts to help me solve this. I now have Xiao Kalo. Kalo is the managing editor of personal finance website. The simple sum. Hey Kay, welcome to Money Talk. Thank you for having me. Alright. So Kaylon, have you bought a beauty package before? I would say as 60% or maybe a higher percentage of

women in Singapore would answer. Yes, it's a very resounding. Yes. Ok. So what services were these for? I've mainly done massage packages. Thankfully it's just kept like that. But of course I have many friends who have done new packages, waxing packages. Ok. Ok. I was one of those IP L packages IP L packages, hair salon packages even, right? As long as it has to do with a woman's appearance, you can probably find a package for it somewhere for sure. You'd

be hard pressed to find none in my opinion. And IP L in case you didn't know it's intense pulse light. So it's a form of hair removal treatment that women but also men sign up for and they tend to tell you oh, you need a minimum of six sessions for the effect and all that stuff. But we'll get into that later. I want to ask you. Now, Kaylon, did you regret any of these package purchases? So, not so much for the salon ones. I have thankfully been very diligent and

I completed all of it. Ok. However, that's not the case when it comes to my class pass packages, my class pass credits rather. Ok. So this is the exercise and Wellness app that we're talking about. Right. Yes, I'm sure like most Singaporeans would be familiar with class pass by now. So how they work is that you buy a certain amount of credits every month and you have to use

them up within the month. There is a plethora of services that you can use from going to the gym to exercise classes and lately even massage packages or facials. I've seen haircuts on that app as well. Right? Ok. That one, aside when it came to your massage package, were you pressured in any way to buy it? Not gonna lie. The town was attractive, I think with anything that you buy, there are several things that you should necessarily think about

before you do it. So that includes firstly how frequently you can envision yourself going for the service, right? That's one and the other one that sometimes in the heat of the moment we forget is how convenient the location actually is. Yeah, that's a huge one. So another incident recently I was tempted to buy a package for was actually for a Pilates Reformer class. So, if you have ever done Pilates Reformer classes, do you know how expensive they are? They are very expensive.

The industry standard is about 40 to $50 without signing any package. And even if you sign a package, if it's not a special discount, the cheapest I've ever seen maybe 30 so recently I've chanced upon a social media ad that actually said that, oh, you could get 15 classes for $299. That's not too bad. Yeah, that drops each class to $20 which is unheard of in Pilates. Yeah, exactly. If you are in the practice, you know, and

so it's very tempting. But then in the terms and conditions are firstly, you have to finish it within the month, 15 classes in a month. Ok. Strictly speaking, still possible you even get a day's rest in between. So you can like do two days and one day. Very optimistic. Yeah. But then the other thing was the location. So the location of this particular studio was not near any M RT station or even a bus stop. So it would take

extra effort to go all the way there. So even if I wanted to, it didn't seem to make a lot of sense. The likelihood that I was not going to finish my package would be very, very high. You are a very practical woman so safe to say you did not sign up for this reform package, even though it was a very, very good deal. If you think about it mathematically, it makes so much sense. $20. It does,

it does. Even if you were super disciplined, you're like, ok, I'm super charged to lose weight to get into exercise. This is going to be my kickstart. It's just, there were so many other elements that discouraged you from signing up in the end. It was more of being practical that it would result in myself not being able to go for the classes. And I think that would be a thing that you should really think about when you are signing up for a package, your

commitment level. Yeah. So we are talking about this or that. Do we sign up for single or should we sign up for a package? Because it makes more sense. So strictly speaking, I advocate for paper use. Ok, especially when you first start. Yeah, so there are several reasons behind this. So that lovely scenario that you painted at the start that many people are quite familiar with the scenario changes. Once you sign a package sometimes, yeah, sometimes even the

service changes you sign up. That's what I mean. That's what I'm getting into. There have been stories where, ok, you get this wonderful experience when you first go and the second time you go, sure they still give you the facial but somehow it's not as soothing, not as comfortable anymore. Even the bed is, the room is not what I paid for. Yeah. So that would be one thing to consider. And that's something that you will only find out if you

actually visit the place a bit more. I think the second thing also that you will only find out more after experiencing it more would be how easy it is to book the place as well. So, I've had friends who have had packages and every single time they call it, oh, I'm full, I'm full and it's impossible to finish using the packages because of this as well, right? Which is something that you won't know if you sign up for a package upfront, right?

I did notice that as well when I did have a package, but I didn't put the two and two together. So beauty establishments usually cite cost as the main reason for pushing packages to us as customers, right? They claim it's much cheaper per session compared to a per visit. Is that always the case? How does the math add up here? The math is not wrong. Ok, definitely it's not wrong, but that's the problem. It's not just about the math a lot of the time. So

the three things that I mentioned just now. So firstly, location, how often you are exactly going to use it. And the third one being that whether the service hold up over time and these I think are just as important if not more important than the cost alone. It's a bit of a paradox though, not knowing, especially the quality bit that you mentioned, right? The quality of the treatment you won't know until you sign up. You can always go back

for a 2nd, 3rd visit and pay per use. So I don't think that any salon is going to tell you that. Oh, we are not going to entertain you if you don't sign up a package. That's true. That's true. And you, and you pay more per visit if you don't sign up a package. So there's no reason for it. Firstly, you are more realistic about how often you can go back. And also you get a better idea of the type of therapists that they have there. So, not all salons. Can you

always get the same therapist or spas? Can you get the same therapist as well? And you might want to feel your way around and see if the different people that you can alternate to make your package usable within whatever time period that you have to finish it by. Yeah, that's true. That's true.

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up for packages, right? There's also the danger of the establishment closing down. Now, we've seen so many reports of spas and beauty parlors shutting down leaving these customers in the lurch. The Consumers Association of Singapore case reported that consumers lost $285,000 last year alone in repayments due to business closure. So do you think then that the package model needs to change? So I'm not too sure whether needing to change will be a thing.

So actually has this thing called case trust Mark. If you sign up with a package with a salon or spa that actually has a case trust mark, they are obligated to buy insurance for you for it. What that means is that if that establishment shut down, the insurance will actually make payouts to you. So your advice is if you do decide to sign up for a package at a beauty parlor or a spa, look for the case trust mark, that's one way to

safeguard your money. And interestingly enough from 2017 to 2022 there's actually 100 and 69,000 worth of insurance payouts that have been unclaimed by people because I don't think a lot of people in Singapore know about this. Wow, unclaimed 100 and $69,000. It's a lot of money. Yeah. So I think it's one of the efforts that case has made within the industry to give it a better reputation, especially in the aftermath of lots of salons closing down

and people being left in the lurch. So in order to be case trust accredited, you do have to provide this service. So one thing that you can do is to look up for the case trust accreditation. So you are more assured of where your money is going or rather that your money is coming back. Should the salon or the spa shut down? Ok. Let it

be known. You are hearing it here on money talks. Ok. Look for the case Trust accreditation and that's how you're going to safeguard or ensure that the money you've lost to a spa closure comes back to you. Ok. So when it comes to stuff like the gym or a yoga studio, it does make sense to buy packages, right? Because so in my case, I've just recently signed up for a Pilates package, I've also signed up for a yoga package and I like what some of these studios

have done so far. There's a lot of flexibility. So they offer different categories, different tiers of pricing per class because it helps you decide what your commitment level is going to be, which is one of the things that we talked about. So, is it a question then of identifying your lifestyle habits and then deciding the best payment method? Yeah. So it's a mixture of a couple of things if this is the first time you are signing a package and there are options to actually go smaller. I would

recommend doing that first. No one starts off with bad intentions, especially at the start of the year when it comes to fitness stats have shown that in January, the gyms are full always and they are always full on Mondays too. Yeah, but by February it starts emptying out but don't tell everyone secret. But I mean, that is the reality. So while wanting to commit to something is great, I think being realistic or testing out in smaller batches would be to your advantage.

So I would say sign up for a smaller package. First and if you really enjoy, see yourself enjoying the groove, enjoying the facilities, then you commit to a bigger package. Yeah, I think that's fantastic advice and that's exactly what I did with my yoga package recently. I went for a five class pack because I'm new to the studio. I don't know if I like the studio. I don't know if I like the location, the teachers, the practitioners and the facilities and whatnot. So that's really great advice.

So we're seeing some companies whose business model is pay per visit. The other way is also you can book a home therapist and pay per use. So do you see this as a trend that's happening? It definitely is a pin point for some consumers to have to commit to a package. So this becomes attractive. It's a market gap. So these businesses in my opinion have been really smart to be able to find, find something to cater to this particular market segment and

off it. Yeah, that it's a smart move on their part. After that, if the customer decides to sign on for a package, then it's an organic decision that ok, I like the service. I like the company that's doing this. They've not pushed me, why not support them and I'll continue to use their services. It builds customer loyalty in a very organic way, doesn't it? Yes, especially if it's very convenient for them as well. Yeah, I wouldn't mind a home therapist, maybe I should try

that myself. One last question for you. Any advice on how to approach budgeting and keeping spending in check when you're considering these packages? That's a great question. So I think the first thing that you need to do is to really ensure that space in your budget for it. Your basic needs need to be met first. I don't think it makes sense going into debt just because you need to look good. Yeah,

the whole treat yourself thing has its limits. Yeah, it should definitely not result in you going to debt or even compromising your financial future. So I think the most important thing first is to know what you're working your goals towards and then planning accordingly. And for most Singaporeans, I would say we will have enough to then comfortably have that extra. Then it becomes about prioritizing how you're going to spend the extra for some people that might be gym memberships

for some people that might be beauty treatments. I think there's no right or wrong answer. As long as you're not compromising your financial future, I think that's good and then coming back to the packages because this is this or that after all, I would say that it's better to pay a bit more each time now than to sign away a huge amount and end up not using it. The reality is that a lot of people do sign up for packages and end up not using it.

Finder did say that Americans spend $397 million on unused gym members. Oh, wow. So that's the money that's wasted. Yeah. So that translates to about 67% of full memberships that people sign and never utilize at all. Yeah, I do think that we are a bit better in this part of the world because our parents taught us well to not waste money. Fingers crossed. Yeah, but the reality is that there are quite a number of people who have packages that they don't complete.

So rather than putting yourself in such a situation, do look at the location of the place, how realistically you're going to use it and whether the service ends up being what you like it to be, it's more important to pay per use until you can figure those things out and then sign up for the packages. But gradually start with something small, know that you can commit. And if you really like it, then sign on longer, that is sage advice and certainly something that I would

personally subscribe to. So that promotional price on a beauty package may seem alluring at first. But do consider if you would actually use all the services or if the upfront payment is something you are comfortable with. I will gladly pay a few $100 for treatment at a place that I completely trust or have gone to for many, many years. But I'm also mindful of the basics of financial common sense.

Don't over commit. Don't overstretch where you cannot reach. Thanks Ken for helping us weigh the options on this or that. And thanks to you, our listener, if you've enjoyed this episode of Money Talks, there is more content for you to enjoy. Always simply follow us on Apple podcasts or Spotify and give us five stars or leave a review. The team behind Money Talks is Joanne Chan, Jacqueline Chan Christina Roberts and I'm Andrea. He.