Go to Top

Cancellation Compensation Is Complicated

In normal times, I would pack my suitcase tonight to attend a weekend event at a convention center in the Midwest. But these are not normal times, and like nearly everyone, I won’t be going much of anywhere for a while.

The event I planned to attend was canceled last week on orders from the state’s governor. I am not naming the convention to spare its organizers a little needless embarrassment. It is a comparatively small gathering of enthusiasts run every year by a family-owned business that, like many others, may now struggle to stay afloat.

Besides, there are countless thousands of similarly canceled events across the country and around the globe. The novel coronavirus and the disease it causes, COVID-19, play no favorites when it comes to borders or passions. After a slow start, the crackdown on mass gatherings to stem the spreading pandemic is hitting every entertainment option, from sports and music to film and fashion. Of course it is also triggering organizers to cancel events that are not thought of as entertainment, although I will tell you that some speakers at estate planning conferences can be pretty amusing (in our own dark way).

I bought my tickets to this weekend’s event after COVID-19 triggered the first mass shutdown in China, but well before it was clear that the disease would cause anything like those disruptive effects here. I believe the sponsors waited to cancel their event until after the government issued the shutdown order to protect against the refund claims that they seem desperate to avoid. They are talking about rescheduling for later in the year, although nothing is definite. I am not unsympathetic. This event is personally important to me, so I plan to show up whenever they can make it happen. I do not expect to demand a refund, and these tickets were not particularly expensive anyway. I was able to cancel hotel reservations without penalty and to get a credit for my airfare.

But not everyone is in the same position. Suppose you hold tickets to an event that is canceled or rescheduled. You can’t make it to the new date (which may or may not be a realistic date anyway, depending on the uncertain course of the pandemic). You can’t afford to take a loss on the unused ticket. Can you get your money back?

The answer depends on a lot of variables.

The first is whether the ticket vendor or event sponsor is willing to give you a refund. Ticket holders to the massive Coachella music festival in California that was scheduled to take place next month have their choice of using their passes for a rescheduled date in October or getting their money back. But organizers of Miami’s Ultra Music Festival, which would have begun this week on Friday and run through Sunday, offered no such option. Ultra’s sponsor waited to cancel until the city of Miami ordered it to. It then allowed ticket holders only an option to use the tickets (with some free upgrades) in 2021 or 2022, for specific dates to be determined. Patrons have just 30 days to decide which of those years they will try to attend.

In many professional sports, teams are setting individual refund policies for tickets sold through their own box office or advance sales units. Tickets purchased through third-party vendors will also be subject to varying policies, although large vendors will often handle refunds for canceled events without any customer action. Ticketmaster, for example, says it will automatically credit tickets for any events canceled outright to the original form of payment. But if an event is rescheduled, things get complicated. If the ticket holder cannot or does not wish to attend on the later date, Ticketmaster will issue refunds only if “the event's organizer is offering refunds.”

Does this mean you are out of luck if such a refund has not been authorized? Not necessarily – especially if you purchased your ticket by credit card. In that case your responsibility may be governed by national or local law.

In the United States, the Fair Credit Billing Act excuses credit card holders from liability in most cases for goods or services that they never receive. A canceled event seems to pretty clearly fall into the category of a service that is never received; one that is merely postponed may not. Still, there is no downside in disputing a charge, particularly a recent one, for canceled or rescheduled tickets. Card issuers cannot collect the disputed balance from you while they investigate the disputed amount. (The amount can still count against your credit limit, though.) If the event organizer does not satisfy the card issuer’s request for information to justify the charge, the expense becomes the responsibility of the vendor or the card issuer, not you.

State or local law might further strengthen your rights in this situation, and could conceivably apply to tickets purchased via debit cards, debit-based processors like PayPal and Venmo, or even the increasingly rare paper check. But in such situations, it will often be up to you to assert and enforce those rights against the event sponsor.

The United Kingdom has an analogous protection in its law via Section 75 of the Consumer Credit Act of 1974. That law goes further than the American version in making the card issuer directly liable, jointly and severally with the vendor, for refunds on goods or services that are not delivered. But it only applies to purchases greater than 100 pounds (about $121 at this writing).

With so many organizations reeling from the impact of the coronavirus crackdown, a lot of patrons will be understanding. Many will likely try to keep their tickets if possible. Others may donate their tickets’ value to bolster a struggling organization. But even those who are willing and able to pitch in can learn lessons from this experience. A ticket represents a promise, and promises can’t always be kept. Credit cards are a great way to make sure those promises are backed up by laws that protect consumers from going into debt for something they never receive.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

Related Posts

The views expressed in this post are solely those of the author. We welcome additional perspectives in our comments section as long as they are on topic, civil in tone and signed with the writer's full name. All comments will be reviewed by our moderator prior to publication.

, , , , , , ,

One Response to "Cancellation Compensation Is Complicated"

  • Amy Laburda
    March 18, 2020 - 9:35 am

    Here in New York City, I’ve experienced a variety of methods for handling tickets to canceled events first hand this month. I had tickets to a classical music concert at Lincoln Center, a Broadway play and an Off-Broadway play for March. Lincoln Center offered me the option to pick between a free exchange to a future concert, a refund or a donation of my ticket’s value to the Chamber Music Society. I bought the Broadway tickets through the app TodayTix, which is issuing vouchers for 110% of the value of the tickets for events during the mandated closures. You can use the voucher on anything on TodayTix, not just the show you were originally going to see (though I’ll probably try to get tickets the same one, assuming I can). The Off-Broadway show had been set to close March 29 regardless, so that theater just went ahead and refunded me in full.

    I’m lucky that I’m in a position where none of these tickets were make-or-break financially, regardless. But I’ve been impressed with arts organizations and third-party vendors doing their best to handle huge volumes of refunds and cancellations in the middle of everything else going on.