Ticket buyers and sellers say StubHub owes them after widespread event cancellations

Alex Schroeder Apr 10, 2020
Stadiums, arenas and other venues around the country are empty with all events either canceled or postponed. Justin Sullivan/Getty Images

Ticket buyers and sellers say StubHub owes them after widespread event cancellations

Alex Schroeder Apr 10, 2020
Stadiums, arenas and other venues around the country are empty with all events either canceled or postponed. Justin Sullivan/Getty Images

What happens to showgoers and sports fans when events across the globe are canceled and tickets are no good anymore?

It depends on where they got those tickets.

Take Stephanie Moyles: She spent $440 on StubHub for two tickets to Les Misérables at the Durham Performing Arts Center in North Carolina on March 14. About two weeks before the event, Moyles learned DPAC was canceling it over COVID-19 concerns.

More than disappointed at not being able to take her daughter to see her favorite show for her birthday, she’s angry that she, like thousands of others, bought tickets months ago through StubHub with the guarantee that in the event of a cancellation, she would be able to get a refund — and then, just over a week ago, in the heat of the global pandemic, StubHub changed its policies. It’s no longer giving refunds, just coupons.

“I was fuming,” Moyles said.

Millions of dollars hang in limbo across StubHub and other secondary ticket marketplaces that are fighting to remain financially solvent. Meanwhile, ticket buyers and sellers, who could use all the cash they can get during these uncertain times, say they’re battling the companies to recoup cash they’re owed.

Coupons, not refunds: a new policy for buyers

StubHub was hit with a class action lawsuit by a Wisconsin resident a week ago, alleging it is “reneging on its guarantee to provide cash refunds as many are seeking to get their money back for the thousands of events canceled due to the COVID-19 pandemic.”

“Today’s live event landscape looks far different than it did months or even a few weeks ago,” a StubHub spokesperson told Marketplace in an email. “Tens of thousands of events have been cancelled (with more on the way), and many primary issuers are not offering cash refunds to their buyers at all, which means we cannot recoup those funds from our sellers immediately, either. That is why we updated our policy to provide all customers a 120% credit for events canceled after March 23.”

Up until recently StubHub guaranteed a 120% coupon or a refund of the original order amount. Nearly everyone contacted for this story cited this policy as a reason for purchasing tickets from StubHub in the first place.

“The reason I bought tickets on StubHub was the guarantee,” said Joshua Woody, who purchased March 13 tickets to a Lizzo concert in Houston in February. “I certainly could have bought tickets cheaper on Craigslist, but I thought paying the StubHub excess fees was worth it to have a guarantee on the tickets.”

Woody heard from StubHub twice after spending $1,748.70 to purchase eight tickets to the event: Once, on March 7, to preemptively explain that if an event were to be canceled, he would have the option to receive a refund or a coupon, and again on March 14, to say the concert was canceled, and — once again — he had the option for a refund or a coupon.

He immediately requested a refund. StubHub confirmed it had received a refund request, and said processing would take between two and three weeks.

“The reason I bought tickets on StubHub was the guarantee. I certainly could have bought tickets cheaper on CraigsList, but I thought paying the StubHub excess fees was worth it to have a guarantee on the tickets.”

Joshua Woody

Moyles had a similar experience: She requested a refund on March 17 and was told to hang tight for processing.

Emily Kreifels of New Jersey, who spent $145 for three tickets to Disney on Ice scheduled for March 29, went through the same back-and-forth. She says she called and chatted online with StubHub nine times from March 16 onward, after her home state went on lockdown and the event was canceled. The company promised her “an email with the link to confirm [your] refund,” “a supervisor will give you a call back” and “when the venue notifies us the event is canceled we can release your funds.”

It was a waiting game — until March 30. That’s when Woody, Moyles, Kreifels and many others learned that the refunds weren’t coming.

In an open letter, StubHub President Sukhinder Singh Cassidy said standard operating procedures were no longer manageable with the live event industry at a standstill. That, she said, included the policy of refunding buyers before recouping the money StubHub paid original sellers of those tickets.

StubHub has made an exception in one case: If “the buyer’s billing address or event is in one of 14 states with consumer laws around refund,” the customer still can get a refund.

Sellers struggle, too

From Cassidy’s interview with Axios: “In addition to our buyers, we also have a million sellers on our platform, all of whom are trying to figure out how they’re going to get recouped from the original seller — the venue, the team, the artist — and the timing delays are going to be significant.”

“In normal times, we would take the risk of giving refunds to buyers before recouping the same refund from the seller. At regular volume, we can afford to take that risk. But these are unprecedented times.”

Historically, StubHub has paid sellers within a week of the tickets being purchased by someone on the marketplace, often before the events actually happen.

But sellers are not seeing payouts for sales they say took place before any changes to the company’s policy occurred. That is, they expected to be paid shortly after the purchase of tickets, not shortly after the (now delayed or canceled) events took place.

One broker in Los Angeles who requested anonymity for fear of retaliation from the company said Stubhub owed him more than $40,000.

“Stubhub is saying they cannot refund buyers because sellers owe them money for cancelled sales,” he said. “In my case and others, it’s the opposite.”

“Put it this way: they owe me $40,000, and I’ve had less than $2,000 worth of sales canceled,” the anonymous broker said. “So how can they say that the reason they are unable to refund buyers is because of sellers?”

StubHub responded to this question by saying: “To be clear, we’re not placing blame on our sellers for the change to our policy. This argument incorrectly assumes that StubHub has not already paid sellers for tickets that sold prior to the unprecedented wave of cancellations, or that all sellers have a net positive balance with StubHub. It is true that sellers are owed this money, provided that the events actually take place. We certainly hope they do. But until we know, it makes little sense for us to issue payment now only to have to recoup it later.”

Before, if an event were canceled before it happened, StubHub would then go back and essentially reverse the transaction, charging the seller for a refund, as it’s doing now in many cases.

“Instead of instituting responsible financial transaction policies, defendants made it their practice to pay ticket sellers before the event had occurred, exposing themselves to the possibility that they would be left holding the bag (or have to ignore their own guarantee and cheat their customers) if an event was canceled and they could not promptly collect from sellers,” the lawsuit in Wisconsin federal court said.

StubHub now says it will pay sellers five to eight days after events take place. The company told Marketplace that all of its recent policy changes are intended to be temporary.

Payouts delayed for events before COVID-19 shutdowns

Jim White of Brisbane, California, a regular seller on StubHub, said he “encountered issues receiving payment” not for events that only sold before the “COVID-19 disruption,” but events that took place before it started.

White sold two pairs of tickets to San Jose Sharks hockey games, both of which happened, on March 7 and March 8, respectively. StubHub owed him $111.36.

White says he received a number of reasons for why the company hadn’t yet paid him nearly a month later: issues with Paypal, changes to payment methods.

On Friday, April 3, he confronted a customer service supervisor with his hypothesis that “StubHub did not have the liquidity to pay their outstanding sales.” Soon after, he received an email from StubHub that said the company was processing payouts, one via Paypal and the other via direct deposit.

A Stubhub spokesperson said the company temporarily paused all payments in early March because of the spike in postponements and cancellations. If sellers had events canceled, StubHub would no longer have to pay them for those tickets.

“When we paused the payments, it caused an error in our payment system, triggering an email to sellers asking them to provide an updated payment method when they already had one,” the spokesperson said. “Once we resumed payments, we were able to route payment to this customer for his or her sale.”

Another seller, who requested anonymity, says he sold one pair of tickets on the platform to a popular event in Los Angeles scheduled for March 8, and did not receive his payout for more than a month, only after “raising holy hell.” He says he called 10 times and heard similar reasons for pay delays: issues with PayPal. He also eventually received his payment on the night of April 3.

Buyers turn to credit card disputes to recoup cash

Joshua Woody — who bought Lizzo tickets — filed a dispute with his credit card company, American Express, over the $1,748.70 he says he was owed, and it found in his favor. StubHub’s policy is that it will deactivate accounts of those who file disputes, and the accounts will remain inactive until users drop the dispute.

Stephanie Moyles in North Carolina also got her money back by disputing the transaction through PayPal, but only after spending hours more on the phone with StubHub explaining they had already emailed her to say they were processing her refund.

“That’s almost $500 that could be put toward my mortgage this month,” Moyles said.

Weathering the storm

Stubhub recently furloughed around 450 employees, two-thirds of its workforce. (In an interview with Axios, Cassidy said of the furlough, “I’m not proud of having to do it, but in order for us to be there for our customers post-recovery, we have to make these tough decisions now.”)

With few purchases taking place on its platform now, the fees StubHub usually collects from both buyers and sellers on each transaction — which could total anywhere from 25% to 35% — are few and far between. StubHub normally sells almost $5 billion in tickets a year.

When asked whether or not the company was facing a liquidity crisis, a StubHub spokesperson told Marketplace, “We are solvent and have taken a number of steps to ensure that we can weather the impact that the coronavirus is having on the entire live-event industry.”

How are others in the industry handling this?

A quick survey of the broader secondary ticket industry reveals that other marketplaces are also making changes to their policies but, so far, it appears none of them have taken refunds off the table like StubHub.

StubHub notes it was the first to offer the 120% credit for canceled purchases. Places like Vivid Seats, Gametime and SeatGeek are still offering refunds, or credits of equal value for future use. However, their respective terms of service seem to leave the door open for shutting down refunds if need be as things progress.

This doesn’t mean, of course, that folks aren’t having any trouble with some of these other major marketplaces. A quick search on Twitter yields dozens of accounts complaining that they have not received refunds for events that were canceled, or payouts for events that already happened.

But another major sticking point in all of this is event postponements, an entirely separate category of cases. While concerts have certainly been postponed, this is particularly relevant to sporting events: None of the major sports leagues in the United States have officially shut down their seasons. They’ve only suspended them.

That means all of those remaining or yet-to-be-played games hang in limbo. But people want their cash back now.

In these cases, there’s nothing people can do but wait, until things get back to normal and events resume. Whenever that might be.

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