By: Samantha Pelto
We are in the midst of a pandemic. The economy is struggling. People are suffering. On top of everything going on right now, many people in need are unable to get ticket refunds for concerts and other events that have been cancelled or postponed indefinitely. Over 23,000 events were cancelled, postponed, or rescheduled within the last three weeks of March alone. Because of the unprecedented number of cancellations and postponements and lack of refunds thereof, there has been mass public outcry. Ticketing vendors are increasingly pushing the blame on their clients – the event organizers. Regardless of who is to blame, it is time to consider changes to refund policies.
Event providers often include their refund policies in their terms and conditions of sale. For example, the Lightning in a Bottle music festival in California states the following in their terms and conditions: “Tickets and vehicle passes are nonrefundable even if the Event is terminated early or canceled, or entry conditions are modified, due to harsh weather, acts of nature, governmental regulation, the failure to obtain required governmental permits, or conditions beyond Do LaB’s control.” Lightning in a Bottle was forced to cancel due to COVID-19 and announced that they would not be offering refunds in accordance with their policy. The terms are governed by California law.
Statutes regarding event refunds differ depending on the state. For example, California’s relevant statute requires refunds for all cancelled events whereas the New York statute does not require refunds for events cancelled due to reasons beyond the event provider’s control. The California statute states: “The ticket price of any event which is canceled, postponed, or rescheduled shall be fully refunded to the purchaser by the ticket seller upon request. Any local jurisdiction may require a ticket seller to provide a bond of not more than fifty thousand dollars ($50,000) to provide for any refunds that may be required by this section.” New York’s statute states: “Each advance ticket purchaser shall . . . be entitled to a refund . . . if the performance of the event . . . been cancelled or rescheduled, except as provided for by subdivision three of this section.” Subdivision three excepts events cancelled for reasons outside of the event organizer’s control so long as the purchaser is able to use the ticket for a rescheduled event or exchange it for a ticket of comparable value.
With many event organizers unable to or opting not to provide refunds to ticket purchasers, there may be an uptick in litigation. Although ticket purchasers may have a good claim, depending on state law, the event organizer could be judgment proof, i.e., financially unable to satisfy a judgment against it. Aside from legal considerations, event providers need to consider the potential reputational damage their refund policies will cause as well. After Lightning in a Bottle announced it would not be offering refunds, it experienced significant criticism and two class action lawsuits. Thereafter, it ended up issuing an apology and refund options. Ticket vendors, as opposed to event organizers themselves, have also taken multiple approaches to ticket refund policies.
Ticket Vendor Policies
Many ticket buyers have been unable to obtain refunds for cancelled or “postponed” concerts from ticket vendors. Some concerts are being treated as postponed even though postponement dates are yet to be decided. Interestingly, Ticketmaster recently modified the terms on its website. Previously, the language provided that ticket buyers could receive refunds “if [their] event is postponed, rescheduled or canceled,” but the modified language only lists cancellation as a proper basis to receive a ticket refund. According to its website, Ticketmaster will automatically refund tickets in the event of a cancellation, although event providers may set refund limitations. Ticketmaster, who sells over $30 billion in tickets each year, claims its clients have authorized refunds for more than 11,000 concerts and sporting events, including 4,000 that had been postponed. Ticket resale marketplace, StubHub, recently cut its refund policy. Instead of offering refunds, StubHub turned to offering coupons (worth more than what customers paid for their tickets). StubHub, who sells approximately $5 billion in tickets each year, says handling refunds is not manageable. Another ticket sale platform, EventBrite, suggests alternatives to canceling events and providing refunds on its website. Rather than provide refunds, EventBrite suggests event providers either postpone events, transfer ticket buyers to a different event, or provide ticket buyers with a discount to a future event. EventBrite event organizers set their own refund policies, and EventBrite encourages ticket buyers to donate the ticket funds from cancelled events to the event organizer. EventBrite does however have a process to request a refund if (1) an event is canceled; (2) the event was scheduled between March 15, 2020, and May 15, 2020; and (3) the ticket purchase occurred before March 15, 2020.
Ticket refund policies should be standardized and should offer greater protection to purchasers. Many purchasers expect refund policies to be similar, so the inconsistency among ticket vendors is cause for much frustration. Without greater protections, many purchasers who were unable to receive refunds for cancelled or postponed events during the COVID-19 pandemic will be more hesitant to purchase tickets for concerts and other events in the future, further stunting the economy, in which the concert industry could lose close to $9 billion this year. To reduce buyer hesitation, lawmakers should require ticket vendors to give purchasers options upon event cancellation or postponement going forward. Purchasers should have the option to choose between (1) a full refund, (2) a coupon to use for future ticket purchasers for the ticket value or higher, or (3) a donation of the ticket value to the event provider. This will give those in need the opportunity to receive a refund while permitting those with income to spare the opportunity to donate to struggling event providers. Whether an event is cancelled or postponed should not make a difference in a refund policy because many ticket purchasers will be unable to attend events that are moved to different dates, especially if such dates are several months in the future.