Penalty fees are configurable on the membership type level. This means that membership contracts inherit their penalty fees from the membership type that it's associated with.
A no-show or late cancellation will always result in a Class Usage loss, regardless if Penalty Fees are turned on or off.
Enabling/disabling penalty fees
Navigate to Products from the left panel > Memberships > Membership Type > select Edit from the membership options.
Scroll to the Penalty Fees section > toggle the green dot to the right to enable & to the left to disable this feature.
Editing Penalty Fees
If penalty fees are enabled while editing and the membership has been sold to customers already, no-show and late cancellation fees will be charged for each penalized reservation.