State Attorney General’s are requiring StubHub to refund customers.
StubHub is a well-known ticket exchange and resale company. When people want to resell their tickets because they can’t make it to events, or there are unsold tickets that venues themselves want to post, they can use Stubhub as a resource to help ensure the tickets are still used. After a commission, customers retain the refund amount. The company provides services for both buyers and sellers of tickets live entertainment events, allowing for the posting of tickets online.
The settlement involves StubHub customers in Arizona, Arkansas, Colorado, Indiana, Maryland, Minnesota, New Hampshire, Ohio, Virginia, Wisconsin, and the District of Columbia. “The multistate investigation began after several customer complaints about Stubhub’s lack of responsiveness to the inquiries,” the attorneys general of these states explained.
StubHub’s original policy allowed consumers to receive full refunds on their ticket purchases, including fees, if events were canceled. However, StubHub suspended that policy in March 2020, following the nationwide mass cancellation of events. Because of public health restrictions and changing expectations, many were cancelled due to the coronavirus pandemic.
The company announced in 2020, “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 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 for all buyers. Due to the exceptional circumstances the music and sports 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.”
The AGs determined these wasn’t an adequate response, and StubHub had tried to offer credits of 120% of ticket purchase prices for future events.
“We’d all like a refund from the ride Covid-19 has taken us on, but in this case, there was written policy not followed,” Ohio Attorney General Dave Yost said. “That’s why we went to bat for Ohioans here and put money back in their pockets.”
The settlement with the ticket reseller indicates it must reverse its suspended no refund policy and offer money back for any tickets purchased prior to March 25, 2020, before the pandemic was at its peak and everything was shutdown. It is unclear whether customers have to prove that the venue cancelled an event due to the Covid-19 pandemic, but that does not seem to be the case. The settlement also requires StubHub to be more transparent about its refund policies and honor those policies when events are cancelled moving forward.
Stubhub will be stuck with a monetary penalty up to millions of dollars which can be avoided if it issues the refunds to its customers in a timely manner.