Soaring Prices of Second-hand Tickets on Reseller Platforms, But No Customer Service & All Risks to be Borne by the Consumers

15 October 2018
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Soaring Prices of Second-hand Tickets on Reseller Platforms, But No Customer Service & All Risks to be Borne by the Consumers

The buying frenzy for tickets to hot performing shows and sporting events have spawned a market for ticket reseller platforms with faithful fans willing to pay a premium almost at high cost.  The Consumer Council has found the prices of tickets purchased through these online platforms are invariably jacked up by few times to dozens of times than their original prices.  The exorbitant price that the consumers are paying, however, is disproportional to the level of service that these platforms should rightly provide.  Only scant sketchy information is provided with hardly any customer service let alone the safeguard for consumer protection.

The Council is of the view that buying from ticket reseller platforms will only serve to fuel the speculation on already inflated prices of big-ticket events, and consumers should be discouraged from such transactions.  The role played by second-hand ticket reseller platforms in the transactions is blurred as to whether or not they could be defined as a trader, and as such one using their services may be at risk of not being covered under the Trade Descriptions Ordinance.  Furthermore, the physical offices of these online platforms may be located abroad outside Hong Kong, making contact and redress much more difficult.  Consumers should think thrice before buying from ticket reseller platforms.

The Council has looked into 3 second-hand ticket reseller platforms and through actual trials comparing their individual ways of operation and customer service.  A reason for the high prices on second-hand ticket reseller platform was, apart from inflating of prices by the sellers, the reseller platforms also exacted a booking and handling fee from both the sellers and the buyers.  The 3 platforms would pocket from the buyers for a percentage of the ticket selling prices at 15%, 16.5% and 28.8% respectively as charges. At the same time, they would also receive charges from the sellers by 10% or 18%, bringing to respective total handling fees at 26.5%, 33%, and 38.8% of the original ticket selling price.

In the case of a recent pop concert in December to January, for instance, the lowest marked ticket price was at least 1.1 times ($658 or more) higher than the original price.  The highest marked ticket price was a whopping $40,000, or above, 40 times of the original price.  The Council found that some of the tickets identical to the original price with similar seat allocation, their marked prices could differ by 10 times or more.  It is doubtful whether how many of the tickets are genuinely available for sales, or is it a tactic to test what the market could bear, or to create the illusion of hot demand in order to push sale of second-hand tickets.  Consumers should give the matter more thought.

The Council observed that often the resellers would take advantage of and put pressure on the eager fans in fear of being unable to secure their tickets, by spreading messages of a scramble for tickets such as “less than 1% tickets left available”, “4 people have just bought tickets for this event”, or “5 people are now viewing”.  Further they would set a time limit for each transaction and display for all to see the countdown in a bid, so as to drive the consumer into a hasty purchase decision.

Such aggressive sales tactic was most evidently deployed by one of the platforms which sprinkled throughout the entire booking process with such messages.  This sort of practice has led to a public controversy in Australia where the Australian Competition and Consumer Commission decided to take prosecution against the operators of related platforms in a court action last year, pointing out that such sales tactics are tantamount to false and misleading trade practices.  The court case is still underway.

All reseller platforms did not require the original sellers to provide exact information about their tickets bearing only information in relation to the date, commencing time, venue and the designated ticket zone of the show.   2 platforms would omit the official ticket price and all platforms would not show information on the printed tickets about the seat row and location, nor the terms and conditions (T&Cs) (e.g. age limit) of the event concerned.  Some platforms would leave it to the sellers to decide whether or not to fill in the designated ticket zone and the seat row; individual sellers have chosen to list the seat row and number in concrete.  

Further, the provision of customer service by the platforms was virtually non-existent.  Indeed both the buying and selling parties have to bear considerable risks in transactions through the reseller platforms.   The investigation found that though some platforms did list out the customer service hotline number or email, but when problems occurred concerning the sale and purchase of tickets, neither buyers nor sellers could get in contact with the customer service staff.  In the event the tickets were lost in the mail or delay in the delivery, all 3 platforms would not undertake to guarantee refund for the buyers.

Should the tickets become invalidated, 1 platform had in its T&Cs that the sellers may have to compensate the buyers for the loss and pay a penalty of $450 to the platform.  Another platform required the affected buyers to file their complaints within 48 hours of the incident, to fill out a dispute claim form and produce proof for the refund application.  The sellers, on the other hand, may not obtain any fee but must also bear the buyers’ costs in finding ticket replacement.

In addition, headquarters of such platforms usually located in other countries, without specifying their local office, if any, in Hong Kong.  In the case of dispute, it may involve issues of cross-jurisdiction making it difficult to pursue redress.  Apart from offering ticket sales for local events, these platforms also offer ticket sales regarding major international sporting events and overseas performances.  Purchasing tickets for events abroad generally involve airfare and accommodation expenses, and should any dispute occur over the tickets, the consumers are likely to suffer even bigger loss.

There is hardly any difference between the tactics of ticket reseller platforms in price profiteering and ticket scalping activities.   Presently in Hong Kong the regulatory oversight on ticket scalping is confined to only licensed places of public entertainment and not applicable to places under the management of the Leisure and Cultural Services Department (LCSD).  The Consumer Council is calling for a review and revision of the existing legislation by the authorities concerned to remove the grey area in the law, for the benefit sake of consumers.  The Council also remind consumers to refrain from buying tickets through unofficial channels to safeguard their own rights and interests. 

The Consumer Council reserves all its right (including copyright) in respect of CHOICE magazine and Online CHOICE.