Revenue / 10.11.23
Grantham and Grimm on Ticketing Pros Getting Out in Front of Chargebacks
“Chargebacks are a growing concern for live event professionals, and their impact can be significant. Often, chargebacks occur after an event has concluded and financial settlements with artists are already in place, leading to direct revenue loss for the venue.”
So warns Mandi Grimm, who has been fighting the good fight against chargebacks as Director of Fraud Prevention for Etix. Basically, a chargeback occurs when a ticket purchaser, also known as the cardholder, contacts their bank or credit card issuing company to request the reversal of a transaction. Once the cardholder initiates this chargeback process, the funds for the ticket purchase are temporarily withdrawn from the bank account of the merchant, which can be either the venue or the ticketing provider. The cardholder typically provides a reason or picks from a list of predefined reasons to explain why they are filing the chargeback. These reasons can range from claims of unauthorized transactions to issues such as billing errors or not receiving the purchased tickets.
Grimm says, “The rising volume of chargebacks places additional strain on existing staff or necessitates hiring more personnel to effectively manage the workload. Furthermore, excessive chargebacks can trigger card brand monitoring programs, resulting in extra fees and potentially jeopardizing the ability to accept certain cards. In a landscape where every ticket sale counts, understanding and proactively addressing chargebacks is crucial for the sustainability of live event businesses.”
In the trenches with Grimm are such ticketing professionals as Christy Grantham, Director of Ticketing for The Wilson Center at Cape Fear Community College in Wilmington, North Carolina. Earlier this year, Grantham did an exceptional job of sleuthing in uncovering a fraudulent chargeback claim. It was early March, and a guest purchased three tickets to the March 22 performance of “Legally Blonde The Musical” at the Wilson Center. The tickets were delivered electronically to the buyer's email, and all three tickets were scanned at the door 50 minutes prior to showtime on the night of the show. Regardless, the guest then initiated a PayPal dispute over her order claiming someone had made the transaction without her permission.
Based on evidence Grantham gathered, someone else making this transaction without the purchaser's permission also would have had to have access to her email address or phone number on March 7 when the transaction was made and again on March 22 in order to use the tickets. Grantham was even able to provide security camera footage of the buyer and her two guests at the performance that matched photos she had posted to her Instagram account with captions like: “Great show and great company tonight in Wilmington.”
Nevertheless, months later, the matter remains unresolved with PayPal, and Grantham continues to pursue it. She knows realistically it’s a business, and she is likely going to lose more of these cases than win. But she is not surrendering. She says, “Yes, I am biased because I am on the venue side. I know this has to be hard, especially for credit card companies. They’re dealing with everyone who is saying, ‘I’m right. They’re wrong.’ And I am sure there is a tremendously high volume of these [cases] to get through and determine who’s correct. At the same time, you need the customer to use your product, so you’re going to want to rule in favor of them as often as you can. I get how hard it is on their side. But these folks are using their platform to commit fraud! If I were the person who was in charge of this PayPal situation, I would not only rule in favor of the venue. I would disable that woman’s account and inform her, ‘You’re not allowed to use our platform anymore.’”
Both Grimm and Grantham see chargebacks as a worsening trend in the ticketing and live events industries. The former says, “Chargebacks are now impacting venues that have not faced this issue before, and the volume is significantly increasing even for those with past experience. INTIX members should be concerned about this trend, as it leads to financial losses that are likely to continue rising.”
So, what can be done? Grantham believes a technology solution could help as she currently cannot provide “proof of delivery” via her ticketing software. She also can’t prove that an email was sent and received, and a link was clicked. “That seems like something that might eventually get to be built in at some point,” she says. “But we don’t have it now. We need more tools from the software side.”
Grantham adds, “I think Maureen [Andersen] suggested building reverse logistics into your budget in an amount of money that is expected to be lost through things like chargebacks. That’s probably the best suggestion I’ve heard as far as actually being able to deal with this and not let it take you down. [The Wilson Center] doesn’t have enough chargebacks at this point to really pose a threat to our total operation. But I can see how some other organizations or venues would — those that have even thinner margins than we do.”
Grimm, meanwhile, offered the following counsel: “Members should educate themselves on the nature and reasons behind the chargebacks they receive. By establishing best practices tailored to their venues, they can better navigate and mitigate the impact of this ongoing issue.”
She then detailed four key tips when fighting or disputing chargebacks. Number one, focus on proactive prevention by reviewing refund policies, ticket limits and customer communication. “Reducing the likelihood of chargebacks is the first line of defense,” she says. Two, keep thorough records of patron communications and transactions. It’s important to provide concise, essential information when disputing a chargeback.
Three, clearly explain terms and, if including screenshots, provide explanations for easy understanding. “Chargeback analysts do not have familiarity with ticketing jargon,” Grimm says. Finally, if chargebacks with the same reason code are recurring, create templates to streamline the response process. Templates can save valuable time and effort.
Grimm summed up with some assurances to INTIX members: “You're not alone in dealing with chargebacks. It's a challenge that many businesses in our industry face. If you haven't already, start building a network of peers to collaborate with. Learning from others' experiences and having someone to talk to can be incredibly helpful when navigating this issue. And know that it is essential for the ticketing office and the larger organization or venue to be on the same page regarding chargebacks. This alignment ensures consistent communication; streamlined responses; better fraud prevention; and, ultimately, revenue protection.”
Interested in more education on fraud and chargebacks? Mandi Grimm will be presenting two workshops on these topics at INTIX 2024, Jan. 29–Feb. 1 in Las Vegas. Register now, and stay tuned for the full schedule of events, coming soon.
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Tags: Revenue , Chargebacks