The issue of refunding ticket fees has always been a topic of debate in the ticketing and live events industry, but as COVID-19 forced the mass cancellation of tens of thousands of events worldwide, it has become even more relevant.
While many ticketing firms include any associated fees in a refund for cancelled events, others are opting to keep the booking fees to help mitigate the severe losses caused by a live events blackout.
As millions of tickets (whether physical or digital) became invalid overnight due to COVID-19, ticketing firms have begun arguing that a part-service has been provided for advance tickets, which, in some companies’ views, must therefore be paid for by the ticket-buyer.
The issue, which has vexed ticketholders and left them out of pocket, has been hotly debated on social media and fans have taken to Twitter and other platforms to complain.
We asked three prominent names from within the ticketing sector to answer the following question…
‘Should ticket sellers refund booking fees if events are cancelled?’
Tim Chambers, Managing Director, TJChambers Consultancy
Tim Chambers is an international ticketing specialist and consultant with over thirty years’ experience within the live music sector ranging from start-ups to public companies including UK & Pan-European M&A. He was previously the SVP international corporate development for Live Nation Entertainment, and prior to that VP European development for Ticketmaster.
From the perspective of the disappointed fan, patron or supporter, the response is immediate and clear, if an event is cancelled, they would expect a refund in full i.e. the price they paid.
Assuming they bought via a primary source (how would the consumer know any differently?) and after excitedly waiting several months since the OnSale, during which they confirm their identity, contact details, payment and agreement to receiving follow-up marketing messages from the artist / promoter / venue / sponsor / ticket retailer, it’s disappointment enough that the event is not happening.
But to add insult to injury ticket retailers then routinely expect that consumers will accept that a partial service has been provided, and therefore only part-refund will take place ‘*as specified in the original (small-print) 30-point Terms & Conditions’.
The argument being that as the now invalid tickets (whether physical or digital) have been delivered in advance, and that a part-service has been provided, this must therefore be paid for, by the disappointed ticket-buyer.
The retailer then typically informs the consumer that refunds for the original ticket face-value may be further delayed whilst they retrieve revenues advanced to the event organiser (as per their internal supply-side agreement) and that it may take up to 30 days to process their refund request – comparing somewhat less favourably from the micro-seconds it took to take payment all those months ago.
Consumers are also advised that no liability can be accepted for the recovery of any additional expenses e.g. travel and hotel accommodation arranged around the event – and compensation enquires relating to those services should be taken elsewhere. It’s almost as though the industry doesn’t want repeat custom.
In their own defence, the ticket service providers will claim that they are merely enforcing the terms and conditions of the contracts with their inventory suppliers and that when events are cancelled they have incremental workload with regards to customer contact and administration, and the processing of reverse payments.
And the event promoter / producer will claim that for cancelled events they still have to settle accounts with the artist, production services, licensing, venue hire etc., write-off all the original event advertising & marketing costs, and deal with the knock-on effect of the cancelled event on the rest of the tour, season or residency.
But for the consumer do they need to know any of this, or even care about the internal costs and logistical organisation required for the now cancelled event?
To repeat they just want their money back. Please.
Jonathan Brown, Chief Executive, Society of Ticket Agents and Retailers (STAR)
STAR is the representative body for the UK ticketing industry, promoting consumer confidence, and excellent service through a strict Code of Practice. STAR’s membership includes ticket agencies, theatres, arenas, sports organisations and venues, music venues, travel companies and many others in the ticketing industry.
Ours is a complex industry with many players.
Those that are not in the meetings with promoters, producers and venues, or involved in the intricacies of the resulting commercial arrangements may see this as a simple issue. It isn’t. Over the years we have had to recognise that and adapt.
Our Code of Practice and model terms and conditions, the latter developed in consultation with the Office of Fair Trading (OFT), require that members refund at least the event price – often referred to as the face value – but also that they make clear their refund policy in their terms and conditions.
This was also the position taken by the OFT some 16 years ago, acknowledging that a ticket agent’s work for the customer is the processing of a transaction for which fees are explicitly added to the event price.
It was therefore considered reasonable for the agent to include terms that provide for it to retain those fees, particularly as the agent is not responsible for the cancellation. If the agent is itself at fault, it should make a full refund.
Booking fees help cover the marketing of shows as well as the costs of processing credit card payments and contributing to usual business costs, customer services and the research and development that brings new technology and processes to the industry. In some cases, there may be other commercial calls on a percentage of that booking fee and, though the business can of course be profitable, the margin is not as much as outsiders may think.
The UK live entertainment ticketing sector is comprised of a wide range of organisations operating diverse business models, and while many ticketing businesses are able to refund fees, others are not and are clear about that in their purchase policies.
We have looked into the possibility of insurance arrangements to help cover the refund of fees, but it has proved to be a difficult risk for insurers to calculate. Potentially high premiums would need to be covered in the original cost of booking fees, increasing the cost to consumers and affecting the necessity for businesses to remain competitive, while preserving margins that are already squeezed.
When an event is cancelled there is additional work in processing refunds and a further commission paid out to merchant service providers for refunding card bookings. Processing cancellations costs more than bookings!
Ticketing businesses, like everyone else, have had to look at furloughing staff as well as putting together customer service teams working remotely to deal with an increased workload.
They are also working hard with event organisers to help support rescheduled dates and to ensure they can play their part in restoring this country’s fantastic live entertainment and sports industries after this crisis has passed.
Steve Lee, President, Fair Ticketing Alliance
The Fair Ticketing Alliance is a non-profit campaigning organisation for the secondary ticketing sector. Its aims include improving the reputation of the secondary ticketing sector, increasing transparency and to seeking legal clarity about what secondary ticketing activities are/are not allowed.
Fair Ticketing Alliance believe that refunds for cancelled events should be paid in full including booking and delivery fees.
It is often argued that terms and conditions state that booking fees will not be refunded but we believe it is a consumer’s right to be refunded for the whole cost of their ticket purchase.
It is not really a fair term to state that a booking fee will be retained by the agency. A consumer may already be losing out on accommodation and transport bookings made in relation to their booking so to be hit in the pocket by only getting a face value refund too really is unfair.
We do understand the industry really suffers in the event of cancellations, and if events are just postponed we would encourage fans to hold onto their tickets wherever possible and not to claim refunds at all.
However, putting on events carries with it a known risk and it shouldn’t be a risk passed on to the consumer when something goes wrong.
Perhaps insurance policies both for consumers and the industry should be looked into as a way to cover the horrific kind of eventualities we have seen with the coronavirus pandemic.