A lawsuit accuses StubHub of tricking its customers into paying inflated prices.
The lawsuit, filed Wednesday (July 31) by Washington, D.C., Attorney General Brian Schwalb, said the concert/event ticketing platform engages in the “deceptive and unfair” practice of hiding mandatory fees from customers, while also not offering information about why those fees are levied or how they’re calculated.
“For years, StubHub has illegally deceived district consumers through its convoluted junk fee scheme,” Schwalb said in a Wednesday news release. “StubHub lures consumers in by advertising a deceptively low price, forces them through a burdensome purchase process, and then finally reveals a total on the checkout page that is vastly higher than the originally advertised ticket price. This is no accident — StubHub intentionally hides the true price to boost profits at its customers’ expense.”
The company’s use of a countdown timer pressures consumers into making purchases out of fear that they will lose their tickets, the lawsuit said. Drip pricing makes it almost impossible for consumers to comparison shop as they don’t know what the fee will be until they are near the end of checkout.
“Since adopting the drip pricing model in 2015, StubHub has sold nearly 5 million tickets to district consumers, extracting an estimated $118 million in hidden fees,” the news release said.
Reached for comment by PYMNTS, a StubHub spokesperson provided this statement: “We are disappointed that the D.C. attorney general is targeting StubHub when our user experience is consistent with the law, our competitors’ practices and the broader eCommerce sector. We strongly support federal and state solutions that enhance existing laws to empower consumers, such as requiring all-in pricing uniformly across platforms.”
Regardless of the outcome of the suit, research by PYMNTS Intelligence showed the importance of a smooth checkout, with half of all consumers considering the ease of a merchant’s checkout process when deciding where to shop.
“Businesses that can adapt to very convenient ways for customers to pay are going to win in the long run … so staying on top of offerings for a streamlined payment and checkout approach is a heavy focus,” Justin Downey, vice president of product at Maverick Payments, told PYMNTS earlier this year.
“Anything that makes processes quicker and easier with less obstacles for customers, that’s where the excitement is,” he added.
The Washington lawsuit comes weeks after StubHub reportedly halted plans for an initial public offering (IPO), citing an unpredictable market.
