Should StubHub Owe Any Money in This Case of Canceled Tickets?

Now this. In late July, Pete Gingrich, a Virginia Tech alum and die-hard fan, purchased three sets of season tickets for the upcoming Hokies football season. According to screengrabs he provided to The Big Lead, Gingrich purchased 20 season tickets for a total cost of $2,087.40. On July 29, Gingrich received an email that one of his three orders had been canceled — though he did not receive this email for the other two, they also were canceled inside his StubHub account. Here is the e-mail with the explanation for the cancellation.

But after that happened, those same tickets were then re-listed on StubHub, for $20,000 per seat.

That listing remained until Wednesday afternoon, when they were pulled from the site altogether (several other listings, at lower prices, were also removed from the season ticket search).

Gingrich was flabbergasted when his orders were canceled. Even if the tickets were listed at too low of a cost in error, isn’t that either StubHub or the seller’s problem?

StubHub’s user agreement includes the following “commitment to supply”:

"By listing a ticket for sale, you are making a binding offer to sell that ticket to a Buyer who purchases the ticket for the price you have specified. When a Buyer accepts your offer by purchasing your ticket through our Site or Services, you are contractually bound to deliver that exact ticket for the specified price and within the required delivery timeframe. You are obligated to monitor your inventory and ensure all listings are accurate. Under no circumstances may Sellers cancel orders at one price and repost the same tickets for a higher price."

When Gingrich communicated this to StubHub, he received responses from customer support that “It was StubHub who cancelled the orders as the system recognized that they were grossly underpriced,” and that the orders “were not season ticket as they were listed in error, hence the reason why our team had to cancel the order.”

Gingrich was refunded for his purchase, and initially offered a partial coupon for $220.90, which represented 50% of one of the three ticket transactions. He acknowledges to The Big Lead that he received a call from a StubHub customer service representative, but declined to communicate that way because he wanted everything in writing.

The Big Lead reached out to Stub Hub for an explanation of the transaction, and also to the seller. Cameron Papp, StubHub Communications Manager, provided the following:

"“After investigating the situation, StubHub determined that a mapping tool error led to the seller listing individual game tickets under the wrong description of season tickets. Since a purchase had already been made, we had to inform the buyer of this error and cancel the order. StubHub refunded the buyer in full and gave him an additional $2,000 gift code for the trouble that was caused. The buyer still demanded that StubHub also purchase season tickets for him or he would go to the media. StubHub determined that this was an honest mapping error, not market manipulation, and did not penalize the seller or disallow him to relist his tickets as originally intended. As a marketplace with thousands of transaction a day, rare errors like this can occur. In these situations, we strive to balance the needs of buyers and sellers.”"

This isn’t the first time that a potential buyer has been informed by StubHub that a deal has been canceled because a ticket price is undervalued. The Kobe Bryant retirement ticket story was the most prominent and extreme example. A search shows that it has come up in the case of Atlanta Hawks home tickets vs. Golden State, a football game from last November, a Stanley Cup ticket, and Pearl Jam concert tickets recently.

This particular case, though, is not the same as the Kobe Bryant matter (or on a lesser scale, the Atlanta Hawks tickets linked above), where the market value changed. This case involves a website error, not a seller reneging, and the question becomes, how much should StubHub owe a user who relies on what goes onto their website, when the information is incorrect?

Here is what happened. Ticket brokers list their tickets on third-party portals, and that information then goes out to various websites, like StubHub, that list them for sale. The brokers are not individually going to each website and inputting data. As indicated by the StubHub statement, the third-party website then maps the information to their site. In laymen’s terms, they interpret what they are receiving and convert the listing to what you as a buyer would see.

In this case, a listing for single game tickets for the season-opening game against Liberty was misinterpreted, and listed on the site to represent season tickets, and that is how the listing went up on StubHub. When Gingrich saw it and purchased it, the error in listing it as season tickets was realized. The listing remained up thereafter, at a prohibitive $20,000 price, so that the tickets would not sell while the problem was examined.

Late Wednesday, that $20,000 season ticket was removed, and now anyone can purchase a single-game ticket for the Liberty game at $86.99.

Papp is right that under the buyer agreement, StubHub is not legally obligated to provide the tickets after the company refunded Gingrich’s money and offered additional compensation. StubHub is saying this was an issue on their end, and not the seller’s. This is not a case of fraud, or a market correction.

On the other hand, StubHub is a large corporation which, according to this Fortune article, made $700 million in profit in 2014. It is in the information and ticket exchange business and people rely on its representations being accurate. When they aren’t, even innocently through a software or mapping error, what should be the recourse for consumers? StubHub in this case, after that initial offer of $220.90, has now offered just over $2,000 to the buyer, which is roughly equal to the amount of the initial transaction, in addition to the refund.

The buyer, at the time of that initial offer, was looking at a situation where it appeared as though the seller was re-listing the same tickets for a different price, in violation of the terms of the user agreement. Gingrich asked us to look into what was a potentially questionable situation, and beyond the price he had paid and been offered, wanted to know if this was a prevalent issue that deserved attention.

Now that the Big Lead has looked into the situation, it does not appear that anything other than a software/mapping error occurred. Not every investigation is ultimately going to reveal sinister motives, but it is still important that those stories become part of the record. The parties can make the ultimate determination of how much, if any, a representation appearing on StubHub that turned out not to be correct (season tickets versus single-game ticket price) is worth in this case.