StubHub Class Action Alleges Unlawful COVID-19 Refund Policy

A class action lawsuit claims that StubHub wrongly refuses to refund ticket holders for events canceled due to the coronavirus outbreak.

The StubHub ticket refund class action lawsuit was filed by Matthew McMillan who says he purchased two tickets to a March 20, 2020 National Hockey League game between the Winnipeg Jets and the Minnesota Wild. He reportedly paid $120 per ticket.

McMillan says the game was canceled when the NHL suspended its season on March 12, 2020 due to the coronavirus outbreak.

The plaintiff claims that he contacted StubHub’s customer service, but was denied a refund because the game was postposed, not technically cancelled. However, the game was in canceled in all likelihood, says McMillan.

He states that the StubHub website has placed NHL games in the category of those “Events Under Review” as opposed to rescheduled, which effectively means they are canceled. However, McMillan says he was denied a refund nonetheless.

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Allegedly, StubHub is a secondary seller of tickets that often charges high prices, sometimes beyond face value of the tickets. McMillan says much of the value that StubHub offers to customers is its willingness to refund tickets if the event was canceled, and says that customers are often willing to pay the high prices for this benefit.

This refund benefit was reportedly offered through the FanProtect guarantee, and was incorporated into various user agreements and marketing pieces.

According to McMillan, the FanProtect guarantee was in effect until March 25, 2020. However, McMillan says that in early March 2020, StubHub started looking for ways to avoid liabilities possibly associated with FanProtect.

The StubHub class action lawsuit says that this attempt at an exit strategy was spurred by the coronavirus outbreak, due to which many events around the world were canceled. Allegedly, the company attempted to pass its own financial burden onto customers.

McMillan says that on March 12, 2020, StubHub sent out an email with with the subject “Coronavirus Update: We have your back,” informing customers that despite the coronavirus outbreak, they could receive a coupon worth 120 percent of the original ticket, or they could receive a refund.

However, on March 25, the company changed its tactic, claims McMillan. He argues the company changed the terms of its FanProtect guarantee to remove the refund promise. The March 25 version of the FanProtect guarantee merely stated that “if the event is canceled and not rescheduled, you will get a refund or credit for use on a future purchase, as determined in StubHub’s sole discretion (unless a refund is required by law.)”

McMillan notes that other communications also stated that only coupons would be offered in the event of cancelations, as opposed to refunds.

The class action lawsuit says that StubHub’s president, Sukhinder Singh Cassidy, went so far as to call the coupons a convenience to customers, as opposed to admitting that they were less desirable than a refund. 

The plaintiff says that StubHub did not guard itself against the entirely foreseeable event that a global occurrence would require the cancelation of events, and instead of taking steps in advance to deal with this occurrence, tried to make customers pay for it after the fact.

McMillan notes that StubHub historically would pay ticket sellers for tickets before the event happened — in his eyes, this move was a reckless one that put StubHub in an untenable business position in situations such as the coronavirus outbreak.

Additionally, McMillan argues that not only is StubHub attempting to make customers bear the burden of the coronavirus crisis, it is passing “savings” on to ticket sellers. McMillan asserts that unlike customers, many ticket sellers have been backfilled for events canceled due to the coronavirus.

The online ticket class action lawsuit goes on to say that it was not until March 30, 2020 that Cassidy sent an email to customers informing them that their refund policy had been suspended, as the previous practices were not sustainable due to the coronavirus outbreak.

The email allegedly noted that most customers had already chosen a coupon as opposed to refund, and said that refunds would only be offered in “jurisdictions where they are required.” The email stated that the coupons expire after one year. 

According to the StubHub class action, customers swiftly took to the internet to protest this change, saying that many of them purchased their tickets before the new policy, and relied on the promise that they could receive a refund when making their purchasing decision.

McMillan notes that on StubHub’s website, the company purports to have the right to make changes to its User Agreement by sending an email to customers, and the right to change its policies without prior notice. However, McMillan asserts that this practice violates consumer protection law.

In related legal news, StubHub has added a warning on its website letting consumers know that resold tickets could be invalid. A probe by the Competition and Markets Authority (CMA) in the U.K. forced StubHub to clarify the terms on their ticket resale website as to not mislead customers. 

The StubHub customer is represented by Steven D. Liddle and Nicholas A. Coulson of Liddle & Dubin PC. 

The StubHub Ticket Refund Class Action Lawsuit is Matthew McMillan v. StubHub Inc., et al., Case No. 3:20-cv-00319, in the U.S. District Court for the Western District of Wisconsin. 

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