As the result of a Class-action law suit in the US dating from 2003, Ticketmaster has to refund part of the processing charges it made on customers in the US where it intentionally made a profit over the actual cost – dating back from October 21, 1999 to October 19, 2011. Refunds will be $1.50 per order with up to 17 orders per customer. If the redemption falls below $11.25 million per annum during the four years for claiming, Ticketmaster will donate the balance to charity.
Ironically, Ticketmaster can continue the over-charging practice if it explains that these are not just processing fees on its websites, but has to make the refunds on past transactions because it failed to explain to purchasers that these charges were for more than the cost of processing. Similarly, Court documents are reported to show that people who chose to receive ticket delivery expedited via UPS are eligible for a refund of $5. Refunds are expected to be claimable after April 2012.
Consumer protection agencies have long been concerned in the US about how tickets are sold on-line and the basis for the multiple charges applied to ticket purchases on websites by the likes of Ticketmaster. Who would have thought that a Class-action law suit started in the US in October 2003 would come to fruition in 2011 and require Ticketmaster to give refunds to every US on-line purchaser from October 21, 1999 to October 19, 2011?
The dispute over “processing-fees” has been running for a long time, and in the UK, both Consumers Association Which? and the Office of Fair Trading have queried whether the charges made for card processing, etc. actually reflect the true cost, and are proposing consumer protection action. Now a Court in the US has ruled Ticketmaster has to refund that part of the processing charges it made on US customers where it intentionally made a profit over the actual cost.
The problem they have run into is very simple: they failed to explain to purchasers that these additional charges were not just “processing fees” but additional profit-making surcharges. If Ticketmaster complies and provides an explanation on its website of the charging practices, it can continue to impose the excess charge. You do wonder why it did not do so in 2003 when the Court action started, since that would have saved a huge sum. Similarly, where they charged more than cost for expedited delivery of tickets by UPS, it will be necessary to refund the difference. The latter is estimated at $5.0 while the “processing fee” refund will be $1.50 per order. Each customer can claim a refund for up to 17 orders, going back over 12 years.
You have got to ask why it is not thought good practice to be open with customers and avoid any perception of “rip-off” in trying to get extra money from a simple ticketing transaction. There are lessons to be learned by venues everywhere about the need for honesty on why extra charges are being imposed.
If the size of the refund and the administration of redemption was not enough, if the actual level of redemption falls below $11.25 million per annum during the four years for claiming, starting in April 2012, Ticketmaster will donate the balance to charity.
More on the culture behind these business pactices in the fascinating story Ticket Masters by Dean Budnick and Josh Baron: The Rise of the Concert Industry and How the Public Got Scalped. Details on Amazon.