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Ticketing Chargebacks

Events Ticketing Chargebacks: Anticipating & Preventing Showbiz Disputes

Chargebacks, or forced payment reversals resulting from a customer dispute, are becoming an epidemic within the ticketing space. Part of the problem is the overall upward trend in chargeback issuances as a whole. There are key aspects of ticketing and events that make it particularly susceptible to disputes.

This rash of ticketing chargebacks is creating substantial challenges for the entire ticketing industry. So, how do event ticketing chargebacks happen? And perhaps more importantly, how can ticketing vendors protect themselves?

Ticketing Chargebacks: At a Glance

According to data from Mordor Intelligence, the online event ticketing market is expected to grow to $97.36 billion by 2028; a 25% increase compared to 2023. Professional fraudsters love ticketing, though. This is partly because a high percentage of sales are made online, which makes them largely anonymous.

Then there’s the growing price tag for popular events; for example, the average price of a single NFL seat is around $84. Tickets for popular events can usually be resold for a much higher amount, sometimes ten times or more than the face value, the data from Mordor Intelligence finds. In fact, smart scammers could “sell” the same tickets multiple times, collecting the funds from different buyers without ever delivering the product.

But ticket sellers must also deal with the growing threat of illegitimate chargebacks from buyers, too. Regular ticket holders who couldn’t attend the show, or who were somehow displeased with the event, may feel they deserve a refund. If they can’t obtain it from the ticket seller, they’re likely to dispute the purchase with their bank.

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Why Do Event Ticketing Chargebacks Happen?

Of course, there are valid circumstances in which a cardholder might dispute a ticket purchase. For example, if the seats differed greatly from what the buyer was led to expect, a chargeback may be appropriate. Even then, cardholders have a responsibility to call the vendor and attempt to resolve the issue before they call their bank.

Other disputes can come from people who weren’t interested in the event at all. As we mentioned, criminal fraudsters use bots to score a large number of tickets to scalp.  Experts estimate that, when this happens, the bulk of these seats are purchased with stolen credit card information. When the legitimate cardholders learn of this, they promptly call their issuer to file a chargeback. In other words: the vendor loses the ticket, and still ends up having to refund the fraudulent sales.

Again, in many instances, these chargebacks are legitimate claims from honest customers. Sometimes, however, event attendees file disputes without valid cause. Examples of first-party fraud in the ticketing industry include:

• One party on a shared card account buys tickets without telling the other party, who doesn’t recognize the charge, assumes fraud, and calls the bank.
• A cardholder can’t attend an event, but already bought a non-refundable ticket. They attempt to bypass the vendor and obtain a refund from the bank by claiming the purchase was fraudulent.
• A game is called because of rain or other “act of God,” and the fan feels they were cheated out of an experience for which they’d paid.
• A fraudster buys a high number of seats, resells them at a huge profit, then files a chargeback against the original transaction.
• A concertgoer decides the event didn’t meet expectations, or is no longer a fan of the artist, and wants their money back.
• The cardholder is simply trying to get something for free.

None of these circumstances actually warrant a chargeback. The good news is that, as a ticket merchant, you may be able to challenge the customer’s claim through representment. But, even if you win, you will be assessed the chargeback fee and take a hit to your chargeback ratio regardless.

How Do Chargebacks Impact Ticketing?

If you’re a ticket vendor, ticketing chargebacks can deeply disrupt your daily operations. Each dispute translates to revenue loss and increased administrative expenses. This, in turn, results in increased costs and future complications.

Ticketing chargebacks may not show up until months after the actual event. Talk to us about a long-term prevention strategy.

Industry giants like Ticketmaster or the Shubert Organization take the heaviest hits, but these disputes hurt the industry as a whole. The more chargebacks that are filed, the more risky ticketing businesses appear. That means higher processing fees and stricter operating limitations. These will ultimately trickle down to the customer in the form of higher prices.

Chargebacks can directly lead to:

Learn more about chargeback costs

Overall, chargebacks have far-reaching impacts that can affect your reputation, customer relationships, operational efficiency, and compliance standing.

How Ticket Vendors Can Prevent Chargebacks

You must proactively address chargeback issues. The keys to this are improved communication, and enhanced customer satisfaction measures, coupled with effective dispute resolution when necessary.

This demands a customer-centric approach focused on transparency and satisfaction. The goal is to foster trust, prevent misunderstandings, and ensure customers can make informed decisions about purchases.

Become a Full-Fledged Chargeback Genius

The only resource you need to become an expert on chargebacks, customer disputes, and friendly fraud.

Download the Guide

To that end, here are ten chargeback prevention best practices that we recommend to decrease your overall chargeback issuances:

#1
| 
Communicate Clearly

Be sure that all terms, requirements, and other crucial information is clearly communicated to customers at the time of purchase. Use plain language and avoid legal jargon that may confuse or mislead customers. Providing opportunities for customers to ask questions can reduce the likelihood of chargebacks resulting from a misunderstanding.

#2
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Educate Customers

Educating customers before they buy is essential. You should offer resources, such as user-friendly guides, online portals, and easy-to-contact customer support. Regular communication, including reminders, event updates, and instructions (such as parking availability) can also minimize confusion and prevent disputes.

#3
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Clarify Billing Practices

Billing transparency and itemization can help customers recognize and validate charges, reducing the risk of billing disputes and chargebacks. Receipts (including ticket stubs) and credit card billing descriptors should clearly indicate the services provided and explain any associated costs, including adjustments or refunds.

#4
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ProvideTraining

Educating staff is a key component of chargeback prevention. Provide comprehensive training for all customer-facing agents. This training should emphasize accurate representation of terms. It should also ensure that agents have a thorough understanding and can effectively communicate products, terms, and conditions.

#5
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Prioritize Customers

Timely and empathetic customer support can go a long way toward preventing disputes. You want to provide multiple accessible channels of communication (phone, email, live chat). This will allow you to proactively assist customers, clarify uncertainties, resolve issues, and address complaints before they escalate to chargebacks.

#6
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Ensure Compliance

Staying up-to-date with industry regulations and adhering to best practices for data security and privacy can minimize potential compliance issues. Complying with regulatory requirements can reduce the risk of penalties, legal disputes, and subsequent chargebacks.

#7
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Automate Reminders

Because tickets are sold so far in advance, it’s possible for ticket holders to forget they’re attending an upcoming event. That may make them file a chargeback to recoup their losses. Automated reminders through email, text messages, or mobile apps can help keep events foremost in customers’ minds.

#8
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Improve Documentation

Ticket holders may file chargebacks, claiming they didn’t understand the terms and conditions of the sale. You should ensure that all policy documentation is comprehensive, easily accessible, and written in customer-friendly language. This includes service limitations, exclusions, and refund conditions.

#9
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Enhance Verification

Implementing thorough verification processes during transactions can help confirm your  customers’ identities, intentions, and understanding of the service. This can include additional authentication measures or validation checks at time of purchase to mitigate instances of fraudulent or unauthorized transactions.

#10
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Seek Feedback

Regularly seeking customer feedback through surveys, satisfaction ratings, or online reviews can provide valuable insights into which improvement may be necessary. Addressing customer concerns promptly can help prevent frustrations from escalating into chargebacks and demonstrate a commitment to customer satisfaction.

Learn more about chargeback prevention

Chargebacks Require a Better Solution

Any combination of the best practices outlined above can help you create a solid framework to minimize chargebacks. You can also enhance customer satisfaction and ensure a smooth and secure ticketing experience for customers at the same time.

All that said, a piecemeal strategy won’t be effective. Successful fraud prevention and risk mitigation requires a more comprehensive approach. Fortunately, we can help.

Chargebacks911® offers a true end-to-end technology platform that prevents more disputes, wins more reversals, and maximizes your ROI. Contact us today for more information on how to improve customer service to prevent chargebacks.

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