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Courtesy of Bryce Simpson

Customers left hanging with thousands in prepaid services after Lehi spa suddenly goes out of business

By Liesl Nielsen, KSL.com | Posted - Sep 20th, 2019 @ 10:59pm



LEHI — Frequent customers of CK Massage in Lehi were left fuming after receiving a text Sunday night, informing them that the spa would be closing effective immediately — though many of them each had hundreds of dollars left in prepaid services.

Some customers didn’t find out until Monday morning when they showed up at the spa for a massage or pedicure and found it locked and dark with a handwritten sign on the door saying, “Sorry we’re out of business.”

The sign has since been covered with handwritten notes from angry customers.

“I have $400 invested for services???” one note reads.

“I just paid for 3 massages last week! Have you no conscience?” another says.

Angry customers left notes pleading for refunds from CK Massage in Lehi after the spa unexpectedly closed Sunday, Sept. 15, 2019. (Photo: Courtesy of Bryce Simpson)

Several customers even left their phone numbers alongside pleas for the spa to refund everything from gift cards and membership fees to prepaid packages.

Karen Marcum has been a customer for years but is now out about $400 or $500 since she took advantage of one of the prepaid deals she said the spa always seemed to be offering.

“It’s just frustrating to me. It doesn’t feel like it’s honest,” she added. “There’s just so many people who are just mad and out of money.”

Kacy Moller lost about the same amount after she bought a $1,000 package of prepaid massages that brought the price down “quite a bit,” she said.

“It was always difficult to get an appointment. Everyone’s always so booked, so, you know, we figured they're highly in demand, and a lot of people would go,” she said. “Even the day before, they had people in there using their credits with no mention of closing.”

LeeAnn Freeze posted about the closure in a Traverse Mountain neighborhood Facebook group, and her post has nearly 90 comments from disgruntled customers. Many of the commenters claim to be out hundreds of dollars after recently paying for their yearly membership fee or prepaying for a massage or gift card.

LeeAnn Freeze’s husband, John Freeze, said they’re some of the lucky ones and are only out about $70, but they’re frustrated they weren’t informed ahead of time so they could use the services they prepaid for.

A few days after receiving the initial text, customers received an email from the spa, now provided to KSL.com.

“Although many, many small businesses close within a matter of years, no business owner begins a business anticipating a sudden closure,” the email reads. “CK Massage & Spa began with the best intentions and good faith."

The email claimed certain accounting methods and failure to pay proper business taxes eventually caused the downfall of the business, but the owner of CK Massage, Casey Kleinman, told KSL.com it was also a series of heavy financial blows that wreaked havoc.

The business was able to pay off the back taxes the year after discovering the issue, Kleinman said, but then decided to switch all the employees from independent contractors to W-2 employees — meaning Kleinman would also have to pay payroll taxes.

The additional taxes were a difficult payment for the business to maintain in order to keep employee wages the same as they were before, and Kleinman said he tried to absorb the cost by paying himself $8 an hour during the last five months and nothing the last month and a half of the business' life.

Angry customers left notes pleading for refunds from CK Massage in Lehi after the spa unexpectedly closed Sunday, Sept. 15, 2019. (Photo: Courtesy of Bryce Simpson)

The spa was also dealing with the recent acquisition of a salon that operated at a significant deficit — something Kleinman said he eventually had to get rid of at a large cost to the business.

To keep up with the expenses, the spa offered special deals and packages that would allow customers to prepay for discounted services. Kleinman said he also tried to raise prices, though the customers who had become used to the low cost of the spa wouldn't buy services at a higher price.

"If I just stopped doing the packages, the maximum amount of time we would have been open would have been two weeks," he said.

At the end of last week, however, Kleinman realized it just wasn't going to be enough. Instead of offering another special deal, which he said would have helped him cover the payroll, he decided to simply close up shop.

"I just was not comfortable with continuing because ... I would have made it worse. If I’d have run a special when I knew it was going to be going out of business, ... then I would have had even more people with stuff that they had just barely bought, and I wouldn’t have been able to cover payroll anyway or pay my bills," he said.

Kleinman eventually stopped paying payroll taxes in order to keep the business afloat and now owes hundreds of thousands of dollars in taxes alone — something he'll have to deal with the rest of his life, he said.

"I should have just gone out of business, but I was trying to make it work for everybody," he added. "I’ve got a family with kids, and I was just trying to make it work."

In retrospect, there are decisions he wishes he would have made differently, but he didn't have the business experience to know better at the time, he explained.

"I’m a massage therapist. I just started this out of my apartment ... and just grew it from there," he said. "I tried doing my very best and tried giving people the very best deal that I could."

Most people can't afford massages, especially those who need it most, and Kleinman's grateful he was able to offer a good service for an affordable price — though it wasn't sustainable in the long term.

Utah’s Consumer Protection Division cannot confirm or deny whether there is an open investigation into CK Massage, but if the division decides to take legal action against a business, that decision will be made public, division spokeswoman Jennifer Bolton said.

Customers can file a complaint on the division's website and will be contacted within 24 to 48 hours after being assigned to an investigator. The investigator will then contact the customer as needed during the investigation, and the complainant will be informed when the investigation is closed.

Liesl Nielsen

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