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Monday, June 25, 2012

Price gouging in 2012

Convenience fees my ###!

It’s no fun being frustrated. By definition, people don’t like being frustrating.

Few things are more frustrating that the feeling like you’re getting scammed and can’t get around it. You can experience this many ways in life, and one of those ways comes when buying tickets.

Ever since I’ve been here at THT, I’ve done an annual examination of the most frustrating and galling practice in buying tickets: those damn add-on costs that are almost impossible to avoid. You buy a ticket that supposedly costs $10 only to find out that it costs over $15 when all the fun charges are added on.

Jim Furtado Posted: June 25, 2012 at 07:03 AM | 48 comment(s) Login to Bookmark
  Tags: economics, tickets

Reader Comments and Retorts

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   1. Harveys Wallbangers Posted: June 25, 2012 at 07:47 AM (#4165449)
chris

thanks for the hard work

regarding the reds there are parking lots around the stadium that range from $15-$25.
   2. BourbonSamurai Is a Lazy Nogoodnik Posted: June 25, 2012 at 10:05 AM (#4165513)
I honestly don't understand why this isn't fixed since clearly everyone hates it. Why not just charge $15 and say "your ticket includes a xxx convenience fee and an xx tax" or whatever? Its the bait and switch people hate, not necessarily the prices.
   3. Dag Nabbit: secretary of the World Banana Forum Posted: June 25, 2012 at 10:11 AM (#4165517)
Bourbon- I think I have one idea why.

I note in the column that half the teams now include the con. fee in the ticket price when you first check their site. That's nice, but when I first go on and see their prices, I figure it's that price plus the con. fee & all the rest. I'm just so used to seeing it added on that I always figure to add on X-dollars to a ticket price, so if they put that extra price in the ticket they might drive people away because they think prices are more expensive than they are. This already happened to me this year with the WHite Sox.

I might be overthinking ths. After all, I spend more time looking at this than about anyone else.
   4. McCoy Posted: June 25, 2012 at 10:26 AM (#4165530)
Well, people don't clearly hate it since they keep right on buying things with hidden fees.
   5. McCoy Posted: June 25, 2012 at 10:28 AM (#4165531)
Despite complaints, teams keep giving them to us, and they are almost impossible to avoid. The only way to miss them is to go up to the ballpark and buy your tickets right there, but that isn’t always feasible, especially if it’s a popular team, and doubly so if you are going with a group.

Thus processing fees and convenience fees.
   6. RoyalsRetro (AG#1F) Posted: June 25, 2012 at 10:29 AM (#4165532)

Well, people don't clearly hate it since they keep right on buying things with hidden fees.


People must also love gas prices.
   7. tshipman Posted: June 25, 2012 at 10:34 AM (#4165535)
A five dollar fee isn't a great example of price gouging.

I understand that you're annoyed with the tack on fees, but any major league team who bundled all the costs together would cost themselves money.

People make purchases based on the sticker price, and they are bad at understanding secondary surcharges.

People must also love gas prices.


For all the ########, people don't change their behavior until gas goes over $4.00 per gallon.
   8. zack Posted: June 25, 2012 at 10:37 AM (#4165541)
People are so inflexible, almost...inelastic.
   9. Nasty Nate Posted: June 25, 2012 at 10:45 AM (#4165554)
I think Livenation concert tickets now list the total price up-front.
   10. Lassus Posted: June 25, 2012 at 10:45 AM (#4165555)
Capitalism embraces you.
   11. Harveys Wallbangers Posted: June 25, 2012 at 10:46 AM (#4165556)
tshipman

and before that it was 1 dollar. and then it was 2 dollars. once something becomes accepted folks don't grouse.
   12. RoyalsRetro (AG#1F) Posted: June 25, 2012 at 10:50 AM (#4165562)
"And to think Smithers, you mocked me for buying Ticketmaster. (mocking) No one will pay 100% service charges!"
   13. tshipman Posted: June 25, 2012 at 10:54 AM (#4165566)
and before that it was 1 dollar. and then it was 2 dollars. once something becomes accepted folks don't grouse.


I don't understand why people are blaming the teams. The teams are acting rationally. People make purchasing decisions based on ticket costs, rather than the final price--as long as the concession/convenience fee doesn't get too crazy.

I guarantee you that if there were two websites, one with the costs all folded in to the initial price, and one with the costs separated out, and these two websites provided absolutely 100% equal service and product, the one with costs separated out would do better. People are bad at math.
   14. McCoy Posted: June 25, 2012 at 11:03 AM (#4165573)
I guarantee you that if there were two websites, one with the costs all folded in to the initial price, and one with the costs separated out, and these two websites provided absolutely 100% equal service and product, the one with costs separated out would do better. People are bad at math.

Yep. I see this all the time in the hotel business. You get some family that bought their tickets online from Orbitz or some such place and when they get to the hotel they are shocked, shocked I tell you, that they have to pay to park, and the internet isn't free, and breakfast costs $21 each. If a hotel had included that in their room price then they wouldn't have been listed near the top and you wouldn't have chosen them. Instead you would have chosen some other hotel that didn't include its parking fees, internet fees, and so on and so on.

If the consumer wasn't so lazy at the initial stages of buying you'd get a more open system.
   15. SOLockwood Posted: June 25, 2012 at 11:05 AM (#4165576)
Isn't the visiting team's cut based upon the face value of the ticket? Thus the convenience & processing fees are pure gravy to the home team?
   16. Andere Richtingen Posted: June 25, 2012 at 11:19 AM (#4165591)
Isn't the visiting team's cut based upon the face value of the ticket? Thus the convenience & processing fees are pure gravy to the home team?

I always thought that it was pure gravy for the broker (i.e., Ticketmaster). I think that's the way it was years ago, anyway. Walking up to a window at the ballpark and buying advance tickets: can you even do that anymore?

And yeah, as these things go, it doesn't bother me that much. Is it worth $10 to me to have the ticket emailed to me in a convenient form? Yeah, probably. Someone has to be compensated for that. I suppose it would be nice if the teams handled it themselves, as they would probably do it for less -- wait a minute, would they? -- but it's a service that I want that deserves compensation.
   17. My name is Votto, and I love to get blotto Posted: June 25, 2012 at 11:22 AM (#4165594)
The Braves this season instituted a ticket policy where prices are variable based on demand for the game-last week's games against the Yankees, for example, are more expensive than a series against the Pirates.

Variable pricing
   18. My name is Votto, and I love to get blotto Posted: June 25, 2012 at 11:24 AM (#4165595)
Walking up to a window at the ballpark and buying advance tickets: can you even do that anymore?


Yes, and at Turner Field, at least, there is no service charge for doing so. But going to the park during work hours is a hassle for most people.
   19. Athletic Supporter can feel the slow rot Posted: June 25, 2012 at 11:26 AM (#4165597)
David Price always did seem like a shifty character. I can't say I'm too surprised by this news.
   20. Dag Nabbit: secretary of the World Banana Forum Posted: June 25, 2012 at 11:33 AM (#4165603)
The Braves this season instituted a ticket policy where prices are variable based on demand for the game-last week's games against the Yankees, for example, are more expensive than a series against the Pirates.

That's been around other places for a ways now. I think the Brewers, White Sox & Cubs began it - or at the very least they were near the forefront of it. I wanna say they went that direction maybe 7-8 years ago.

Yes, and at Turner Field, at least, there is no service charge for doing so. But going to the park during work hours is a hassle for most people.

Huh. A year or two ago a reader told me the Braves recently instituted a new policy where they'll charge you an extra cost for buying a ticket at the park the day of the game.
   21. zack Posted: June 25, 2012 at 11:48 AM (#4165630)
Am I having a migraine or is Chris using some crazy team abbreviations in that list? MYM? DCN?

The new scourge is the dynamic ticket systems (as opposed to just tiered games), I'm not sure how dynamic the Braves one mentioned above is, but in hockey they're terrible. It would be all well and good if they were actually a market, but for example, when the Caps introduced the system last year they set a price floor, and the floor is at least 10% higher than the flat price from the previous year.
   22. zack Posted: June 25, 2012 at 11:53 AM (#4165635)
RIP consumer surplus.
   23. Dag Nabbit: secretary of the World Banana Forum Posted: June 25, 2012 at 11:54 AM (#4165637)
Zach - MYM is a typo. It should be NYM.

DCN is how I appreviate the Washington DC Nationals. Looking back, I should've realized that my abbreviations don't always align with standard team abbreviations.
   24. zack Posted: June 25, 2012 at 11:58 AM (#4165640)
I think (as a district resident) that DCN is great. But then I hate calling it Washington when the city is coterminus.

It was just that I was scanning through looking for W and never found it, then the MYM really threw me.
   25. My name is Votto, and I love to get blotto Posted: June 25, 2012 at 11:58 AM (#4165641)
Huh. A year or two ago a reader told me the Braves recently instituted a new policy where they'll charge you an extra cost for buying a ticket at the park the day of the game.


That's correct, gameday seats are a couple dollars more. If you buy tickets for future games at the box office, there is no extra fee; you pay only the face value.
   26. boteman digs the circuit clout Posted: June 25, 2012 at 03:17 PM (#4165827)
I think (as a district resident) that DCN is great. But then I hate calling it Washington when the city is coterminus.

I found some of the team abbreviations to be "creative". I've seen WAS, WSH, and WSN. Their road jerseys say DC so there's that.

Nobody who resides in D.C. for more than 5 minutes calls it Washington, it's usually the District. "If you're inbound on 66 this afternoon, the traffic is awful getting into the District."
   27. jack the seal clubber (on the sidelines of life) Posted: June 25, 2012 at 03:50 PM (#4165851)
"If you're inbound on 66 this afternoon, the traffic is awful getting into the District."


They should just use this as a permanent part of every traffic broadcast and save wear and tear on the announcer. It's definitely a "water continues to be wet" type statement.
   28. Joey B. is being stalked by a (Gonfa) loon Posted: June 25, 2012 at 04:00 PM (#4165861)
Convenience fees may be annoying, but I don't really consider them price gouging.

Now, eight bucks for a beer that should cost no more than four, THAT I consider price gouging. I'm truly amazed that anyone is willing to pay that, but obviously enough people are, or the price would go down.
   29. Jose Can Still Seabiscuit Posted: June 25, 2012 at 04:38 PM (#4165888)
How are teams taxed on the ticket sales? I know one of the reasons airlines do what they do with baggage fees etc...is that the ticket itself is taxable but the incidentals (like the baggage fees) are not taxable. Are teams opening themselves up to some additional taxable income if they fold everything in?
   30. McCoy Posted: June 25, 2012 at 04:44 PM (#4165895)
They may do it for that reason but they also do it because people don't factor in those fees as part of the cost of a ticket. Thus it is "free" money for the airlines.
   31. Harveys Wallbangers Posted: June 25, 2012 at 04:49 PM (#4165903)
post 30:

if you are stating that buyers don't factor bag fees into the equation i disagree. there is data showing not only awareness but purchasing decisions as it relates to bag fees. when they first came out then yes, the buyers did not adjust. now they have adjusted.

bag fees have garnered so much attention only the most casual flyer lacks awareness. southwest has made it a central part of their marketing effort.

as to ticket fees there i do agree because again, only the hard core entertainment user has a deep understanding of said ticket fees.
   32. boteman digs the circuit clout Posted: June 25, 2012 at 05:14 PM (#4165925)
I'm frugal with myself, to say the least, so the rare times when I purchase tickets to a ball game I cuss a bit about the tacked on fees, but pay them anyway. I figure that I've saved a pretty penny or three by watching games on TV or listening to radio broadcasts via MLB Gameday feeds in the comfort of my home so I can indulge myself when I go.

I've had pretty good luck just up and going to the ballpark at the spur of the moment. Sometimes I'll buy from people who appear to be legitimate sellers of excess tickets, or just walk up to the window and pay face value, so I shortcut the convenience fees that way. It's worked out pretty well for me. I have yet to visit the Marlins' new park so I don't know if they pull any of that big team same-day nonsense, maybe I'll go one of these days.
   33. tshipman Posted: June 25, 2012 at 05:23 PM (#4165927)
Now, eight bucks for a beer that should cost no more than four, THAT I consider price gouging. I'm truly amazed that anyone is willing to pay that, but obviously enough people are, or the price would go down.


Now this is a much better example of price gouging--especially since you're not allowed to bring in beer.
   34. McCoy Posted: June 25, 2012 at 05:33 PM (#4165937)
if you are stating that buyers don't factor bag fees into the equation i disagree.

Bag fees have become such a hot button issue and like you said a major airline carrier is using it as part of their marketing campaign that it is no longer a "hidden fee". Everybody on the planet knows to look into baggage fees before they buy a ticket. But hidden fees still work. They just have to change what it is they are charging for.
   35. McCoy Posted: June 25, 2012 at 05:34 PM (#4165939)
I'm frugal with myself, to say the least

The Pope is glad to hear that you are not abusing yourself.
   36. DA Baracus is a "bloodthirsty fan of Atlanta." Posted: June 25, 2012 at 05:49 PM (#4165946)
The Braves this season instituted a ticket policy where prices are variable based on demand for the game-last week's games against the Yankees, for example, are more expensive than a series against the Pirates.


And they were cheaper on StubHub. I saved about $5 a ticket.
   37. McCoy Posted: June 25, 2012 at 06:08 PM (#4165957)
And they were cheaper on StubHub. I saved about $5 a ticket.

I've been going to a game about once every two weeks thanks to stubhub and even when the stubhub fees I'm saving at least half on my purchases.
   38. tshipman Posted: June 25, 2012 at 06:16 PM (#4165962)
Bag fees have become such a hot button issue and like you said a major airline carrier is using it as part of their marketing campaign that it is no longer a "hidden fee". Everybody on the planet knows to look into baggage fees before they buy a ticket. But hidden fees still work. They just have to change what it is they are charging for.


I disagree. Anecdotally, I never saw any kind of willingness to pay a higher fare in exchange for free bags. So many people have credit cards that give them free bags anyways, it rarely makes a difference to the consumer.
   39. DA Baracus is a "bloodthirsty fan of Atlanta." Posted: June 25, 2012 at 06:16 PM (#4165964)
I've been going to a game about once every two weeks thanks to stubhub and even when the stubhub fees I'm saving at least half on my purchases.


That and Memorial Day Weekend were the only times I've ordered tickets online this season. We've found we save a few bucks getting walk up tickets.
   40. DA Baracus is a "bloodthirsty fan of Atlanta." Posted: June 25, 2012 at 06:24 PM (#4165969)
Unable to edit that previous post with:

Scratch that, my memory is bad. They were the same price, we just happened to stumble onto some deals that were cheaper than Stub Hub.
   41. McCoy Posted: June 25, 2012 at 06:30 PM (#4165970)
I disagree. Anecdotally, I never saw any kind of willingness to pay a higher fare in exchange for free bags. So many people have credit cards that give them free bags anyways, it rarely makes a difference to the consumer.

I really don't know what this means in regards to this conversation or how it is a disagree stance. I've never brought up a willingness to pay a higher fare in exchange for free bags nor is what you are quoting about that at all.
   42. DA Baracus is a "bloodthirsty fan of Atlanta." Posted: June 25, 2012 at 06:37 PM (#4165981)
Huh. A year or two ago a reader told me the Braves recently instituted a new policy where they'll charge you an extra cost for buying a ticket at the park the day of the game.


The fees work out to be the same in the end, probably because they raised the online fee rates since then. The $10 Monday tickets are $10 when you walk up. I went to the 15-13 game against the Phillies, which was a "F" game on the flex chart for the same price the Colorado "F" games are in September.
   43. Ok, Griffey's Dunn (Nothing Iffey About Griffey) Posted: June 25, 2012 at 09:39 PM (#4166213)
regarding the reds there are parking lots around the stadium that range from $15-$25.


It can be even cheaper than that. The parking lot under Fountain Square is $5 after 6pm and, I think, all weekend. That's a 5 minute walk from the stadium. I believe the Banks, which is right next door to the stadium, has parking for $8.
   44. Red Menace Posted: June 26, 2012 at 12:45 AM (#4166313)
I always stay at Caesar's (Harrah's?) hotels in Vegas because they don't have resort fees.

As for the parking at Reds games the smart move is the $2 garage at Newport on the Levee followed by a beautiful walk over the bridge.
   45. Barnaby Jones Posted: June 26, 2012 at 01:51 AM (#4166329)
I guarantee you that if there were two websites, one with the costs all folded in to the initial price, and one with the costs separated out, and these two websites provided absolutely 100% equal service and product, the one with costs separated out would do better. People are bad at math.


I'm too lazy to look it up, but I'm fairly certain that eBay pricing has been studied and conclusively shows that when the end price is the same, people almost always "prefer" the lower, shipping-not-included price over the shipping-included price.
   46. Jolly Old St. Nick Still Gags in October Posted: June 26, 2012 at 06:40 AM (#4166350)
The only thing that would likely stop a lot of price gouging dead in its tracks would be for Congress to eliminate all "business expense" deductions for tickets, period. That would shrink season ticket sales to the point where teams would actually have to concentrate on enticing the paying fan to the game, rather than focusing much of their marketing and pricing strategy on the corporate freeloaders who are effectively getting their tickets at a big discount.

Eliminating the "business expense" deduction would also mean far fewer advance sellouts, thus freeing up more tickets for actual game day sales. You'd still have to buy tickets in advance for some of the truly big games, but the supply would be a lot more plentiful and the prices would have to come down.

The only downside I can see would be that with fewer season tickets out there, there would be fewer last minute StubHub bargains. But the overall effect would definitely be positive.

Fat chance of this ever happening as long as corporations have a stranglehold on both parties, but that's another story.

   47. theatl96 Posted: June 28, 2012 at 03:11 AM (#4168295)
MLBAM, who controls the Internet rights to all MLB teams and almost every minor league team, won't let teams sell any ticket online without a fee. In most cases, the fees are split between the team, the ticketing service (i.e. Ticketmaster) and MLBAM, though not always and not necessarily equally. In some cases the team gets nothing.
   48. Jolly Old St. Nick Still Gags in October Posted: June 28, 2012 at 09:07 AM (#4168345)
MLBAM, who controls the Internet rights to all MLB teams and almost every minor league team, won't let teams sell any ticket online without a fee.

That's great to know, since MLBAM is a limited partnership of the club owners themselves.

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