Will Coronavirus Finish Off For-Profit Ticket Resale? Update: StubHub & Viagogo Respond

– StubHub.co.uk
Customers will no longer receive a full refund in case of an event cancellation, but a 120% voucher to spend on the site

Pollstar talked to Reg Walker of The Iridium Consultancy in the UK, one of the country’s lead experts in the field of secondary ticketing. Walker said the mounting legal pressure on Viagogo and StubHub, coupled with the effects of Covid-19 cancellations on their respective businesses, could be too much to take for both companies.
A member of the panel of expert on the government’s review of secondary ticketing, helmed by Prof. Michael Waterson, Walker has also been consulting the All-Part Parliamentary Group on Ticket Abuse. He is regularly consulted by law enforcement and has been recognized as an expert on secondary ticketing in court.
The Iridium Consultancy is not involved in selling or reselling tickets. It only deals with it from the criminal aspect, and has been concerned with ticket touting for the best part of 30 years.
Viagogo is facing a number of court cases in a number of jurisdictions worldwide, StubHub has just been fined in Canada. The UK recently sent two touts to prison, who had used multiple identities to purchase multiple tickets for shows. 
They were convicted of fraudulently reducing the number of tickets available to the public, which constituted a criminal offence.
According to Walker, “there is no lawful way to harvest tickets in bulk, and we’ve been saying this for years, and we’ve been proven right by this test case in the UK.
“There’s only two ways to do it: you pretend to be multiple people, which is fraud. Or you have a corrupt relationship with somebody in a ticket company, the promoters, a venue, wherever, which is unlawful under the bribery act.”
Walker says StubHub and Viagogo are suspected – by design or by lack of due diligence – of profiteering from the proceeds of crime.
He thinks both platform’s insistence on being nothing but a marketplace, mere information service providers, didn’t stand up to scrutiny: “All of the money for these transactions goes through either Viagogo or through StubHub. So, it’s not like a traditional marketplace. 
“If you or I went to an outdoor market and you saw something on a stall, you’d give the vendor the money, he would give you the goods, and he would pay the market owner a commission or a flat fee to be in that market.
“That’s not what happens with Viagogo or StubHub. All of the money goes through either Viagogo or StubHub. So, they control it, they hold it in escrow. But they also make guarantees to both the seller and the purchaser. They are far more involved in these transactions than a simple information service provides, so I suspect they have no defence,” Walker explained.
One such guarantee, up until most recently, included a full refund of tickets in case a show is cancelled. Pollstar had requested StubHub’s most up to date refund policy last week and was told:
“All tickets bought on StubHub to a cancelled event will be fully refunded. The refund will be for the full cost of the ticket purchase, including service fee.
“This policy is continuing to protect consumers and their purchases throughout this time.”
On March 27, an update signed by StubHub president Sukhinder Singh Cassidy was posted on the company’s customer help page. The update was first noted by SBNation.
It states, “When an event is canceled, you will receive a StubHub coupon worth 120% of your original order.”
The move confirms what Walker has been suspecting all along: that the Coronavirus has place both StubHub and Viagogo under enormous financial strain.
As he pointed out, both companies pay out some touts in advance of events for tickets: “They are paid on delivery, they don’t have to wait until afterwards, which I believe in view of the Coronavirus is causing the massive headaches with refunding customers for cancelled, not postponed events.”
Judging by reviews on social media and dedicated review sites like Trustpilot etc, there’s “an absolute slew of people complaining that they can’t get through to customer service, they’re not getting refunded for cancelled events, where they’re entitled to a refund,” Walker continued.
“What we’re also hearing from the other side of the fence is that touts, who should have been paid out for events, which have come and gone, are not being paid either.
“And I suspect that the simple explanation is that neither Viagogo nor StubHub have the money. If you look at all of this, it’s just occurred at a time when Eric Baker from Viagogo has bid eBay $4 billion for StubHub. Worldwide, Viagogo is facing a number of court cases in a number of jurisdictions, StubHub’s just been fined in Canada, there’s the UK test case. 
“Coupled with the fact that Baker struggled to come up with anything like the money for this acquisition, I suspect that a lot of the institutional investors will be looking at this now and going, ‘well, do we really want to be involved in this.’
“I suspect they’re in severe financial difficulties.”
StubHub cannot use this ad anymore
Adam Webb/FanFair Alliance
– StubHub cannot use this ad anymore
The ASA ruled it cannot guarantee the genuineness of tickets

The latest ruling against StubHub in the UK came last week, when the Advertising Standards Authority (ASA) upheld a ruling, which prevents the company to use ad messaging that suggest customers would be guaranteed genuine tickets when purchasing on StubHub.

StubHub had released an ad, which promised “guaranteed genuine ticket to the match.” The UK’s anti-secondary ticketing campaign group FanFair Alliance brought it to the ASA’s attention. 
The crucial point for FanFair was the fact that StubHub claimed it could guarantee the genuineness of tickets, which it can’t. By its own admission, StubHub merely functions as a marketplace on which third-party resellers operate.
In ASA’s view, the claim “Guaranteed genuine tickets” would be understood by consumers to mean that they would be certain to receive valid tickets that would arrive on time and allow them to gain entry into the relevant event.
This isn’t the case, and Walker summed up the various reasons why tickets get rejected at the door: “First one is fake tickets, particularly where eTickets, i.e. print-at-home tickets, are used. You see significant numbers of those turning up at venues.
“Etickets are the bane of everyone’s lives, and we still see these resold through Viagogo and StubHub. We have seen thousand of these presented for entry that were absolutely fake. If people turn up with them, they’re refused at the door.”
Promoters have started including additional criteria aside from a general ban on for-profit resale in their terms and conditions to ensure the validity of tickets. One popular criteria is the requirement to enter the name of the ticket holder on the ticket, which needs to match the ID of the person showing up at the door.
One solution to combat fraud in the age of digital tickets, one that has been taken up by many ticket selling companies, is the constant changing of the QR code stored on customer’s mobile phones. The valid code will only appear upon entering the venue.
According to Walker, it’s one of the practices of touts to just screenshot one of these random QR codes, print them out and sell them as a ticket to unsuspecting customers.
Last but not least, promoters can manually scour the internet for tickets placed on resale sites in breach of their terms, and cancel those tickets in their system.
“I worked on the last couple of Ed Sheeran tours, where we literally manually went through all of the ticket sales data, identified where we suspected criminal offences were taking place,  suspended those orders and cancelled them,” Walker explained, adding, “And yet, some of those tickets were still turning up, having been resold through the resale platforms, and people were turned away at the door.”
Update (March 30, 11:65 a.m.): A StubHub spokesperson provided Pollstar with the following comment with regards to the changed return policy:
“StubHub is a global marketplace and our policies vary by region, in line with local guidance. In the last few weeks, 28,000-plus events have been cancelled, postponed or rescheduled – 23,000 in the US alone. Given the unprecedented impact the coronavirus has had on the live events industry, we have adapted our policies in the U.S. and Canada while continuing to go above and beyond for our customers. 
“As a marketplace, we act as an intermediary for buyers and sellers. In normal times, we’ve made the decision to refund buyers before collecting money from the seller to offer buyers more convenience. And under normal circumstances, this works well, even with StubHub taking the risk of timing delays and some losses when we are unable to collect from the seller. With the coronavirus impacting 28,000-plus events and the associated magnitude of challenge in recouping monies owed by sellers over the coming months, it is currently impossible for us to offer immediate cash refunds to all buyers.  
“When the volume of cancellations accelerated a few weeks ago, we were the first in our industry to offer a coupon worth 120% of the ticket value. This will now be our default option in Canada and in the U.S. Outside of the U.S. and Canada, fans are defaulted to a refund. Due to the exceptional circumstances the music and sport industries are currently facing, some refunds may take a little longer than normal to process. We greatly appreciate our community’s patience and understanding during this extraordinary time.”
Update (March 31, 8:01 a. m.): A viagogo spokesperson provided Pollstar with the following comment:
“Reg Walker has no first-hand knowledge of our business. His comments are based on wild speculation and demonstrate a complete lack of understanding of our business model and practices.
“viagogo, along with the entire live event sector, is experiencing the devastating impact that COVID-19 is having and we recognize the implications this has on those using our platform. With a high volume of events being cancelled and postponed every day, we are working hard in conjunction with event organizers and venues to ensure we have all of the correct information about the status of an event. Once the status is determined, we are able to act accordingly and inform our customers as quickly as possible. 
“If refunds or payments are taking a little longer than our usual quick turnaround, we’re asking people to bear with us under these exceptional circumstances, knowing that viagogo is actioning their issues as soon as possible. 
“viagogo is in a strong position to handle the challenges the industry, and the rest of the world, is facing and we appreciate the public’s understanding whilst we adapt to face such challenges.”