Event Ticketing Chargebacks: How to Fight Back

If you’re selling tickets online, you need to have a friendly fraud strategy. Not only do online ticketing businesses experience high rates of first-party fraud on a daily basis, but they also deal with some of the largest and most frequent chargeback surges faced by any industry. Let’s look at what makes event ticketing so vulnerable to illegitimate chargebacks, and what your company can do to prevent chargebacks from affecting your bottom line. 

The Challenges of Event Ticketing Chargebacks: Surge Tsunamis and Reseller Scams

Every online business faces chargebacks some of the time. Some face chargebacks all the time. Unfortunately, event ticketers are firmly in the latter camp, earning them a high risk merchant category code and hefty fines, fees, and penalties for those who exceed dispute thresholds.

While some of these chargebacks might be due to legitimate reasons – e.g., an overbooked venue selling tickets it cannot honor – there are many cases where chargebacks are used by ticket buyers for unjustified reasons. These illegitimate chargebacks are inherently winnable, and can represent a significant opportunity for merchants to recover lost revenue. But before we get into chargeback mitigation, let’s look at what makes event ticketing industry so vulnerable to begin with:

Event Cancellation

Bad weather, geopolitics, poor sales, and artist illness are just a handful of the many common reasons for event cancellation. While this sometimes means cardholders are entitled to their money back, a lot of them won’t wait to find out, especially when refunds are not automatic or policies are not clear. The situation is also much more murky when events are rescheduled rather than cancelled. This typically results in a lot of chargebacks all at once – perhaps the largest chargeback surges proportional to sales faced by any industry. And for most in-house teams or manual solutions, when quantity increases, quality drops – along with your win rates and revenue. 

Time Difference Between Transaction and Event Dates

Cardholders typically purchase tickets for music, sporting, or business events long in advance – up to a year in many cases. And these plans often go awry. Changes of circumstances, in relationships, or the emergence of more pressing obligations can mean that people are no longer able to attend. Rather than seek a refund, cardholders will often initiate an illegitimate dispute.

Ticket Reseller Scams 

Though the ethics are certainly murky, people often buy tickets so they can resell them at inflated prices. A common fraud scenario is for resellers to initiate chargebacks after selling the tickets, claiming that they never received them. This way, they collect both the inflated ticket price and the original fee, while your company loses the transaction value and faces chargeback fees. These professional scammers will try every trick in the book to keep their ill-gotten money. It’s up to you to defend your revenue even more comprehensively. 

Crossborder Chargebacks

People are often willing to travel great distances for sporting matches, conferences, and concerts – until something gets in the way. The international chargebacks they initiate as a result come with a unique array of issues. This can cause problems for representment building; manual teams struggle to familiarize themselves with unfamiliar codes and deadlines, while template-based solutions often lack the flexibility to adapt to new terminology and regional specifications. 

Reliance on Other Industries

Event ticketing is highly reliant on travel and hospitality to get consumers to the event destination and accommodate them there. If there are significant issues with either of these elements, cardholders won’t be able to attend. In most cases, many cardholders are likely to be faced with the same issue. Expect chargeback surges to follow, overwhelming manual teams and solutions. 

Buyer’s Remorse

A lot of excitement goes into booking an event ticket. People can get swept up in the plans, or the idea of seeing their favorite team or performance, before realizing they can’t really afford it. Rather than seeking a refund, chargebacks are often the go-to strategy. In cases like this, where the cardholder is fully aware that their dispute is illegitimate, they can get very creative and convincing with their reasoning. Template-based solutions are frequently not equipped to create the nuanced representments needed to win these cases. 

How Merchants Can Fight Event Ticketing Chargebacks

Despite these challenges, there’s no reason why you should lose revenue to friendly fraud chargebacks – as long as you’re adequately prepared. Here are a few ways to begin fighting event ticketing chargebacks effectively:

Optimize Ticket Policies and Processes

Clear and highly visible ticket policies can prevent many illegitimate chargebacks by educating cardholders about refund options, and providing proof that friendly fraudsters should have known better. Some degree of leniency can also help. Consider permitting ticket transfers when cardholders can no longer attend an event, and adopting a limited refund policy for cases of accidental purchase. 

Frequent Email Reminders Before the Event

Frequent email reminders for the event can prevent cardholders from double-booking themselves and filing illegitimate chargebacks. Consider forwarding advice about accommodation, parking, and travel to further streamline the process. Any changes of date, time, and venue should be addressed in multiple emails to ensure that cardholders can easily adapt.

Strong Customer Support

A lack of customer support usually delivers a surplus of chargebacks. This is especially true of event ticketing, where cardholders may be anxious about travel plans, seating arrangements, wheelchair accessibility, and packed itineraries. Easily accessible phone, text and email channels can put these concerns to rest, and inform cardholders about refund policies and ticket transfer options.

Improve Billing Practices

Tickets are often expensive – and may seem even pricier when the initial excitement of purchase wears off. This means you need to do everything in your power to make billing flexible and transparent. Installment-based pricing can help cardholders by spreading the cost. Transparent billing is also vital in event ticketing. This means using a clear billing descriptor so cardholders don’t mistakenly dispute transactions during the weeks or months between purchase and event.

AVS, CVV, and Robust Evidence Collection

One of the most common reason codes used in event ticketing disputes is card-absent fraud. This is the logical strategy for resellers who have already pawned their tickets off on others, and want to pawn the blame too. For these cases, AVS and CVV are powerful preventative tools that can provide evidence of a transaction’s legitimacy. Moreover, as event ticketers face a wide variety of dispute reasons, robust evidence collection practices are essential – the more data you store, such as proof of purchase, signed terms and conditions, and email trails, the better your chances of beating friendly fraud. 

Automated Dispute Handling: The Ticket Out of Event Chargeback Nightmares

Even with robust prevention systems in place, the huge surges faced by event ticketing can rapidly overwhelm the most capable manual teams – whether in-house or outsourced. Meanwhile, the creative excuses used by serial friendly fraudsters and professional ticket resellers are designed to confound template-based solutions. These factors combine to form perfect dispute storms, huge in number, highly complicated, and incredibly expensive for ill-prepared merchants.  

While dealing with chargebacks manually is viable for smaller merchants, larger operations will typically seek to automate some or all of the chargeback dispute process. In these cases, it’s essential to choose a partner which has both the relevant industry expertise to handle the quirks of event ticketing chargebacks, as well as the technology that can make use of the latest advancements in AI and machine learning in the service of revenue recovery.

Justt’s fully automated chargeback management solution makes chargeback surges irrelevant by instantly crafting precision-tailored representments for every dispute. While these representments are generated automatically, they are infused with industry expertise through the chargeback experts that continuously improve Justt based on changing regulations as well as aggregated learnings from handling thousands of disputes within the event ticketing industry   Justt uses  advanced machine learning so that win-rates aren’t just maintained, but continue to improve, even during surges. The platform continuously conducts rigorous A/B testing across millions of prior event ticketing cases – adjusting every aspect of representments to reason codes, regional variations, and even granular details such as issuer preferences. The result of every dispute informs the handling of all future chargebacks, so outcomes keep getting better. 

The Golden Ticket to Revenue Protection

Event ticketing chargebacks are one of the biggest hurdles the industry has ever faced – and the problem is getting worse. Sophisticated scammers will only become more competent, while dispute surges get larger. Although prevention measures can help, the defenses they provide are limited. For comprehensive protection, invest in a fully-automated chargebacks solution like Justt. Only then can you render surges irrelevant, fraudsters inconsequential, and watch your win-rates climb.