STUBHUB CEO Eric Baker spoke out Wednesday about the crackdown on “junk fees” and “predatory” ticket pricing, some issues that have long plagued consumers looking to purchase event tickets.
Baker’s comments come after the Federal Trade Commission’s “junk fees” rule went into effect in May, impacting online ticket resellers like StubHub, Vivid Seats and Ticketmaster.
Eric Baker is the co-founder and CEO of Ticket reseller StubHub[/caption]
The law now prohibits “bait-and-switch pricing and other tactics used to obscure and misrepresent total prices and fees for live-event tickets and short-term lodging.”
The regulation requires businesses to disclose the total price to consumers upfront, including any charges or fees.
The final cost must also be displayed prominently.
The rules allows some fees to be excluded from the total price including taxes, shipping fees and any charges for goods or services bought in the same transaction.
Ticketmaster utilizes the exception, announcing in May that their website now uses all-in pricing displaying fees before taxes.
Baker said on CNBC’s “Squawk on the Street,” that StubHub has long been rallying for all-in pricing.
“The reason that is, is that it’s just a better customer experience in the long haul,” he said. “The great thing about having one uniform rule is that all competitors and everyone has to do it, because you can’t give that experience unilaterally.”
StubHub had an all-in pricing policy but abandoned it in September 2015.
“When we lobbied for uniformed laws, StubHub years ago had thought about, we’ll offer up transparent all-in pricing, but if you’re the only person in the market doing it…you’ll end up with a problem,” Baker explained.
This rule will likely cause online resellers revenue to dip year over year while consumers relish in the change.
All-in pricing is beneficial to shoppers as they can know ahead of time if they can afford the ticket prices and can confidently compare prices across different sellers.
Disclosing the price to consumers upfront also allows shoppers to make an informed decision when purchasing on reselling websites, making them feel more in control of their purchase.
“People don’t like unpleasant surprises,” Jon Picoult, founder of the customer experience advisory firm Watermark Consulting, said in an interview with Customer Experience Dive.
“There’s really an opportunity here to make this entire experience of buying tickets a lot easier from the get go, cause it’s oftentimes not that pleasant for people,” Baker said Wednesday.
‘PREDATORY PRICING’
StubHub faced a lawsuit in August 2024 after D.C. Attorney General Brian Schwalb sued the online reseller for “predatory drip pricing.”
The lawsuit defined drip pricing as an advertising practice that reveals only a part of the product’s price.
With drip pricing, additional charges are later shown to the consumer as they go through the purchasing process.
WHAT ARE JUNK FEES?
Junk fees are hidden, or often misleading charges that increase the cost of a good or service.
They are typically tacked on late into the transaction, making it difficult for consumers to compare prices.
Many times, these fees can prevent fair competition.
Some examples include hotel resort fees, ticket service charges, overdraft fees, and convenience fees for online payments.
The suit accused StubHub of using “online practices that trick or manipulate consumers into making choices that they would not otherwise make, to obscure the true price of tickets, influencing consumers to buy tickets at higher prices and preventing consumers from comparison shopping.”
Another issue outlined in the lawsuit is the countdown clock consumers face when purchasing tickets, creating a “false sense of urgency.”
This countdown clock can make consumers nervous, creating the illusion that they don’t have enough time to compare prices on other websites without losing the deal in front of them.
The timer also “emphasizes an artificially low price,” oftentimes displaying a price without the added on fees and charges, the lawsuit claimed.
Since 2015, StubHub has sold roughly 4.9 million tickets to consumers in D.C., costing those shoppers $118 million in hidden fees, the attorney general alleged.
