High service charges on event ticket refunds call for further regulation

Cultural performances have become a powerful catalyst for culture-related sales. Furthermore, ID-based booking, which effectively curbs scalping, is contributing to the revitalization of the cultural scene.

However, it has also led to many complaints over refunding of these tickets.

"We bought the tickets for the events out of love and passion and, for most of us, having successfully obtained the tickets after going through all kinds of tribulations, we could not return the tickets except in very special circumstances," one woman surnamed Xu said, adding that the compulsory ID-based ticket booking proved effective in cracking down on scalpers, affording more people the chance to obtain tickets, but some were fretting over ticket refunds.

It has been learned that many concerts shut the channels for ticket refunds immediately after a ticket is booked, thus effectively preventing ticket returns even when there is plenty of time for resales. Some buyers have had their tickets canceled, but have incurred considerable loss in surcharges.

"Ticket return policies now vary with platforms, organizer-specific rules, different performances, or even with different cities where the same show is held," Xu said.

"Especially in the case of secondary pre-sales, as a rule, any return, transfer, or exchange is explicitly forbidden, even if there is still plenty of time before the time of performance. This is deeply unfair," added Xu, who suggested a need for a tiered return or transfer regime, which might be more rational.

Ticketing platforms and sponsors seem to have their own grievances.

"Event performances are subject to huge uncertainties, very much time-specific, marked by scarcity of supply, and involve huge preliminary outlay, hence the different ticket return policies during different stages of ticket bookings, and in light of different kinds or forms of the show," said an event organizer, adding that the different surcharge is part of the risk management, while the stringent return policy intends to ward off vicious competition.

A procuratorate who has been involved in suits over ticket returns, however, is not persuaded.

He said that the same quality of being time-specific and scarce also apply to aviation and railway travel, yet, for the sake of common interests and risk-sharing, these sectors have come up with a progressive ticket return regime that appears to be more rational. He also believed that ID-based ticket booking should not be a subterfuge for event organizers to unjustly shift risk to consumers.

One insider said that although event tickets are relatively high priced, the refund policy is usually dictated by the ticketing agencies, or ticketing platforms, leaving consumers often in the lurch.

In extreme cases, policies about returns can be different even in case of the same event held in different regions.

Take for example the show by Singaporean singer JJ Lin. Ticket returns for his performance in Suzhou on May 25 could incur four different surcharges, depending on the time; while his performance in Harbin on June 22 would involve three different kinds of ticket returns – an unconditional return, a forfeit of 30 percent of the ticket price, or no return at all.

A state circular issued in September 12, 2023, called for event organizer to set up a fair ticket return policy, of which consumers should be informed.

"The issue is, some platforms' surcharge of 30 to 50 percent of the ticket price already exceeds the upper limit of the 30 percent as provided in contract law," said Zhang Yuxia, a pro bono lawyer engaged in consumer related litigations. Zhang added that in the case of excessive surcharges, victims could lodge a suit with the people's courts, or relevant arbitral bodies, for reductions.

Zhang admitted, though, that if the returned tickets failed to be resold, the platforms could sustain losses.

Thus, in spite of the advocacy for setting up a rational multi-tiered surcharge for ticket returns, the devil is in the details, on the exact percentage of refund deemed "just."

Given the lack of consensus, last year the Shanghai Consumer Council handled in excess of 10,000 performance-related complaints, a surge that could be attributed to two new developments, according to Tang Jiansheng, deputy secretary general of the council. One of those was the growing popularity of such performances that are drawing more people, and the other is the compulsory ID-based ticket booking.

While the ID-based booking has proved an effective deterrent for scalpers, it also gave rise to a new problem: Platforms have become the only channel for tickets returns after tickets could no longer be transferred or gifted to others.

Hence a ticket return mechanism needs to be acceptable to both consumers and events organizers.

Given the attention such issues would evoke on social media and public discourse, event organizers are becoming more and more cautious in sporadic, individual settlements, hence the imperative of drawing up rules in relation to specific scenarios and problems, and Tang believed that the council's support for litigation would go a long way in helping draw up rules in this aspect.

(This article is adapted from an article published on Shanghai Law Journal on June 25.)