StubHub, the leading secondary ticket seller, is facing a multi-million dollar class-action lawsuit after a last-minute change to its refund policy.
The spread of COVID-19 has rattled every corner of the live music industry. All concerts are postponed until further notice, and most analysts believe venues won’t even consider opening before summer. That news, coupled with the economic pinch being felt by millions around the world, has created a demand for refunds that is unlike anything the entertainment business has seen before. The problem is, most people aren’t getting their money back, including those who use StubHub.
In late March, well after the coronavirus began forcing the cancelation of countless events, StubHub quietly updated its refund policy in a manner that upset many ticketholders. The company announced refunds would only be provided to buyers “where required by law.” Customers living in other parts of the country and world would receive a 120% coupon.
In a March 30 message to the ticket buying community, StubHub president Sukhinder Singh Cassidy explained the policy change.
“We’ve worked hard to create a platform that serves both buyers and sellers as a trusted marketplace,” he wrote. “As a convenience to buyers, acting as an intermediary, we’ve historically made the decision to refund them for canceled events before collecting money from the sellers. We’ve also historically offered sellers more convenience by paying them for ticket sales on our platform before events actually happen. Under normal circumstances, these processes are manageable. Given the impact of the coronavirus, it is not possible to sustain this practice in the near-term. We are facing significant timing delays in recouping funds from the thousands of sellers on our platform, and expect these challenges to continue in the coming months. At the same time, buyers expect immediate refunds. As a result, we’ve enacted new policies in the US and Canada that we believe are clear and fan-first.”
The March 30 email went on to state that 70% of customers had already chosen that option and that StubHub would now be using the coupon alternative as its “standard policy for canceled events, with refunds available in jurisdictions where they are required.”
But this week, fans took action to combat the changes.
A Wisconsin man has filed a $5 million dollar federal class-action lawsuit against StubHub for not refunding money he spent on a suspended NHL game. Matthew McMillan accuses the ticket resale company of breach of contract and negligent misrepresentation, among other claims. McMillan is asking the court to prohibit StubHub from issuing coupons worth 120% of the purchase price in lieu of refunds and to order the company to reinstate its pre-March 20 refund policy.
McMillan’s attorney Nick Coulson tells Billboard StubHub’s conduct is egregious.
“Dumping promised refunds for expiring coupons during the time of greatest financial suffering in recent history is cruel and wrong,” Coulson says. “Especially because people have no idea if they’ll even be able to use the coupons — we don’t know what the next 12 months are going to look like. To the extent that StubHub claims financial constraints have forced its hand (into its customers’ pockets), those constraints are entirely of its own making. Through this action, we hope to provide people some small bit of relief during this uncertain time.”
A spokesperson for StubHub told Billboard the company does not comment on pending litigation.
