The $1 charge that Ticketmaster adds to ticket purchases has become a controversial topic in recent years. Officially called the “Order Processing Fee”, this small charge has drawn criticism from many customers who feel it is unnecessary. However, Ticketmaster defends the $1 fee as a necessary part of providing their services. In this article, we will take an in-depth look at what exactly the Ticketmaster $1 charge is, why it exists, and the debate around whether it should be included on ticket orders.
What is the $1 charge?
The $1 Order Processing Fee has been a part of Ticketmaster’s services for over a decade. It is charged on all ticket purchases, including individual tickets and bulk orders. The fee is per ticket, so if you buy 4 tickets to an event, you’ll pay $4 in these fees. It applies to all Ticketmaster orders, whether purchasing online, over the phone, or in person at a box office that uses Ticketmaster systems.
According to Ticketmaster, the Order Processing Fee helps cover the costs they incur to process and fulfill every ticket order. This includes staffing 24/7 customer service lines, providing extensive website maintenance and security measures, covering credit card fees, and handling all the logistics of getting millions of tickets into customers’ hands. Essentially, they claim the $1 fee helps fund their overall operation and services.
When did the $1 charge start?
Ticketmaster first instituted an Order Processing Fee in the early 2000s. Initially around $2.50, the fee decreased over the years before settling at the current $1 price point in 2011.
The Order Processing Fee has brought in significant revenue for Ticketmaster over the years. With around 500 million tickets sold through Ticketmaster annually in recent years, that $1 fee alone can generate up to $500 million for the company per year.
Why does Ticketmaster charge $1?
According to Ticketmaster, there are a few key reasons the Order Processing Fee exists:
Cover the costs of operations
As mentioned, Ticketmaster claims the $1 charge helps fund their overall services and operations. These include customer service, website maintenance, security measures, credit card processing fees, and the logistics of order fulfillment.
Charging an Order Processing Fee allows them to offload some of these operational costs directly to customers rather than bearing the brunt internally. The fee helps supplement their income from ticket sales to cover day-to-day costs.
Discourage bulk speculative ticket purchases
Ticketmaster has also argued that the fee makes extreme bulk purchases less enticing for ticket scalpers and resellers. For example, someone trying to scoop up 100 tickets might think twice if they have to factor in an extra $100 in fees.
The Order Processing Fee and other associated fees on Ticketmaster are purposefully designed to discourage mass bulk speculative ticket purchases that often lead to scalping.
Provide shareholder value
As a public company, Ticketmaster also claims the $1 charge helps drive shareholder value by boosting overall revenues. The millions brought in each year from Order Processing Fees alone contributes directly to net income.
Higher revenues from fees like this provide value to shareholders in the form of stock appreciation, dividends, etc. So the fee helps satisfy public market demands for ongoing growth and increasing profits.
Criticisms of the $1 Ticketmaster Charge
While Ticketmaster defends their $1 Order Processing Fee, many customers, consumer advocates, and watchdogs have complained about this controversial charge over the years. Some of the common criticisms include:
The fee feels like a “cash grab”
One of the most common complaints is that the $1 charge comes off as an unnecessary cash grab. Customers already pay Ticketmaster significant fees on top of the ticket price itself, including sometimes 30% or more in combined charges.
The $1 fee, coming after all these other fees, can leave customers feeling nickeled-and-dimed. Some view it as a clawing attempt by Ticketmaster to squeeze out every dollar possible from ticket buyers.
It’s repetitive & redundant
Critics also argue the Order Processing Fee is repetitive, as Ticketmaster already charges substantial “Convenience Fees” and “Service Fees” on each order. These can be $10 or more per ticket, aimed in part at covering processing costs.
Charging an additional $1 Order Processing Fee comes off as redundant when buyers are already paying hefty convenience and service charges.
It lacks transparency
The murky justification for the Order Processing Fee also draws complaints. Critics point out that Ticketmaster does not provide any breakdown of how much costs they actually incur per order.
Some believe Ticketmaster inflates these “costs of processing” claims to justify tacking on fees like the $1 charge. The lack of transparency surrounding the true order fulfillment costs leads to accusations that the fees are padded for profit.
It discourages ticket sales
Some industry insiders argue the Order Processing Fee has the unintended consequence of discouraging ticket sales in certain cases. The $1 per ticket fee adds up quickly for large group orders.
Event organizers buying bulk tickets for contests, promotions, or corporate events may cut back on those extra ticket purchases due to the looming fees. That results in lost potential revenue for venues and performers.
It primarily burdens customers
Critics also highlight how the Order Processing Fee and most other Ticketmaster charges land squarely on the customer. Ticketmaster’s service fees largely pass the costs and risks of their operations directly to buyers.
Some argue it would be fairer if these costs were distributed across the board – to venues, teams, promoters, etc. Customers question why they should foot the bill for Ticketmaster’s normal business activities through tacked-on fees.
Recent Controversies
The Order Processing Fee and other Ticketmaster charges have spurred various controversies, lawsuits, and consumer actions over the years:
Ticket settlement in the early 2000s
In the early 2000s, Ticketmaster paid over $15 million to settle a class action lawsuit alleging they defrauded customers on fees. Customers essentially accused Ticketmaster of doubling up on fees by charging an “Order Processing Fee” on top of other service fees.
As part of the settlement, Ticketmaster clarified that their “Processing Fees” and “Handling Charges” were separate costs, though critics remained skeptical.
Pearl Jam boycott in the 90s
In 1994, the band Pearl Jam took a public stand against Ticketmaster’s fees by boycotting the service for their tour that year. They viewed the fees as burdensome for fans and began using an alternative ticketing outfit.
Their high-profile boycott put Ticketmaster’s business practices in the national spotlight. But it only temporarily dented Ticketmaster’s dominance while illustrating the hold they had on major venues.
Class action lawsuits
A 2010 class action lawsuit targeted Ticketmaster for alleged deceptive practices by charging fee amounts higher than disclosed amounts. Ticketmaster settled in 2017 by paying $23 million in credits to fans.
Various other lawsuits over the years have accused Ticketmaster of exploiting their market position to overcharge buyers through fees like the Order Processing Fee.
Public outcry overpricing
There have been various public relations flaps due to Ticketmaster’s fees and charges. In 2022, Bruce Springsteen fans revolted when Ticketmaster’s fees pushed the ticket cost over $5,000 in some cases.
Waves of fan complaints, media scrutiny, and politican proposals to regulate ticket sales often follow these public controversies over Ticketmaster’s fees.
Arguments in Favor of the Fee
Despite ongoing controversies and criticisms, there are some arguments in favor of Ticketmaster collecting an Order Processing Fee:
It covers legitimate costs
Ticketmaster states the fee helps offset the considerable costs involved in fulfilling hundreds of millions of ticket orders each year. These expenses include website infrastructure, security, customer service, and order logistics.
Even at $1 per order, the fees likely only partially cover Ticketmaster’s order processing costs based on the scope of their operations.
Other vendors charge similar fees
While often the focus of consumer ire, Ticketmaster is not alone in charging order processing fees. Many other large vendors tack on similar charges to help cover fulfillment costs.
For example, Amazon charges sellers a “Referral Fee” on each sale that helps fund overall operations, anti-fraud measures, storage, etc. These types of fees are common across many vendor platforms and marketplaces.
The overall pricing model works
While criticized for opaque fees, Ticketmaster’s overall pricing model clearly remains profitable. The company grosses billions in revenue each year between ticket sales and various added charges.
Ticketmaster has not found the $1 Processing Fee or fan complaints deterring enough to significantly alter their pricing approach. And venues continue partnering with them, suggesting the model works for the industry.
It allows keeping ticket prices lower
Charging Order Processing Fees also allows Ticketmaster to nominally keep ticket prices a bit lower. Distribution of revenue between ticket face prices and tacked-on fees allows flexibility in pricing dynamics.
If Ticketmaster relied only on ticket prices for all their revenue, base prices might have to be set higher to derive ample income. The current model spreads the revenue streams.
Alternatives to Ticketmaster
The Order Processing Fee is one part of the pricing scheme that leaves many customers with a bad taste about Ticketmaster. Some alternatives for skipping the fees include:
Buy directly from the venue
In some cases, venues sell tickets directly through their box office without going through Ticketmaster. This avoids all Ticketmaster fees, although the convenience of online purchasing is lost.
Use ticket resale sites
Tickets purchased through resellers like StubHub or VividSeats avoid Ticketmaster fees (though these sites have their own charges). However, resale tickets tend to be more expensive upfront.
Consider other primary ticket sellers
Rivals like AXS and Universe provide similar services to Ticketmaster but with their own fee structures. While charges still apply, some find them less onerous than Ticketmaster’s fees.
However, Ticketmaster’s dominant position limits how many events use other primary ticket sellers. Avoiding their fees often means missing out on certain events.
Should the Ticketmaster Order Processing Fee Be Allowed?
The Order Processing Fee brings up several key questions:
Are the fees fairly disclosed?
Critics argue Ticketmaster still does not provide enough transparency around added fees during purchase flows. Upfront disclosure of the full pricing is important.
Are customers getting what they pay for?
Given the opaque justification behind the Order Processing Fee, it’s debatable whether customers receive $1 worth of value per ticket in services. Without cost breakdowns, customers have to take Ticketmaster’s word on the validity of this and other fees.
Is Ticketmaster abusing market power?
With limited competition in the primary ticket selling market, Ticketmaster holds enormous sway. This leads to accusations they use fees like the $1 charge simply because they can get away with it, not because it’s an operational necessity.
It raises questions around whether stronger consumer protections are needed to curb potential abuse of their dominant position.
Should ticket fees be capped?
Some advocate that additional ticket fees like the Order Processing Fee should be capped at a percentage of the ticket’s face value. This could limit how much Ticketmaster and other sellers can tack on in additional charges.
Should the fees be spread wider?
Rather than push all fees to buyers, critics argue Ticketmaster should distribute costs across venues, promoters, teams, and other industry players as well. Spreading the risk may result in a more equitable pricing model.
Conclusion
The Ticketmaster Order Processing Fee remains a hotly debated charge in the live event industry. While the company defends the $1 per ticket charge as necessary and standard, many customers feel it’s an unnecessary revenue grab.
The lack of transparency around Ticketmaster’s actual order fulfillment costs also fuels ongoing suspicions about padding for profit. But with Ticketmaster’s entrenched industry position, avoiding the controversial Order Processing Fee and other charges remains difficult for most fans.
The $1 Ticketmaster fee seems likely to remain a reality for the foreseeable future. But calls for fairer, more transparent pricing continue as customers demand additional value for the extra amounts they are forced to pay across the board.
