Ticketmaster is one of the largest ticket sales and distribution companies in the world. Founded in 1976, Ticketmaster sells tickets for concert, sports, and theater events on behalf of event organizers. Customers can purchase tickets online, by phone, or in person at Ticketmaster outlets.
One common question asked by Ticketmaster customers is why there is no option to purchase gift cards or gift certificates on the Ticketmaster website or mobile app. Many popular online retailers like Amazon and Starbucks allow customers to easily purchase digital gift cards to send to friends and family. However, Ticketmaster currently does not offer any kind of gift card or gift certificate product.
In this article, we will examine some of the key reasons why Ticketmaster does not currently sell gift cards, including:
High fees
Ticketmaster is notorious for charging high fees on every ticket transaction. These fees include an order processing fee, a service fee, and sometimes a delivery fee depending on the delivery method. The fees can often add 25-30% extra onto the base ticket price.
Gift cards would essentially allow customers to pre-pay the fees upfront before selecting an event. This is not beneficial for Ticketmaster as it reduces the perceived pain of the high fees at the time of ticket purchase.
Focus on selling tickets
Ticketmaster’s core business is providing a platform for event organizers to sell tickets. Enabling gift card purchases would require significant investment in developing a separate gift card e-commerce system. The costs may outweigh the potential revenue from gift card sales.
Selling gift cards could also cannibalize ticket sales revenue, as customers may opt to purchase a gift card instead of tickets to a specific event. Ticketmaster is better off focusing on selling tickets directly.
Lack of retail presence
Unlike Starbucks with its network of retail stores, Ticketmaster does not have an extensive retail presence. Gift cards work best when they can be purchased and redeemed directly at retail locations. Without stores, Ticketmaster would have to rely on selling digital gift cards online.
Selling only online reduces gift card accessibility and leaves no physical card for gift giving. This makes it harder to market gift cards to consumers.
Risk of unused funds
Gift cards and gift certificates come with the risk of unused funds if recipients do not spend the full value. Various state laws require companies to remit unused gift card balances after a certain dormancy period.
For a event ticketing business, there is a higher likelihood of unused funds as customers may forget about gift card balances or let them expire. The administrative costs of remitting unused funds erodes potential profit from gift card sales.
Antitrust constraints
Ticketmaster has faced anti-competitive behavior allegations in the past, resulting in legal settlements. Introducing gift cards could raise antitrust concerns again as it may be seen as locking more customers into Ticketmaster by getting them to pre-pay balances.
Regulators may view gift cards as an attempt to further dominate the primary ticket sales market by making switching to other vendors harder for consumers. This regulatory risk reduces the appeal of pursuing gift card sales.
Benefits of offering gift cards
Despite the reasons against offering gift cards, there are some potential benefits that Ticketmaster is missing out on:
Customer convenience
Gift cards would allow Ticketmaster customers to easily purchase tickets as gifts for others. Instead of trying to guess someone’s taste in events, customers can provide a Ticketmaster gift card and allow the recipient to choose their preferred event. This is a popular gift-giving option.
Reduced shopping cart abandonment
Research shows that allowing gift cards as a payment option can reduce shopping cart abandonment. When buying tickets, a gift card option could help capture more sales from customers at check-out compared to only offering credit cards.
New revenue stream
Gift card sales represent a new revenue stream, as some percentage of gift cards are never fully redeemed. Unused gift card funds are pure profit.
Customer loyalty
When customers receive a Ticketmaster gift card, they are more likely to spend it with Ticketmaster rather than competitor platforms. This builds customer loyalty.
Marketing exposure
Selling gift cards in retail stores provides marketing exposure for the Ticketmaster brand. Physical gift cards serve as advertisements for the brand.
Potential solutions for Ticketmaster
Here are some potential solutions that could allow Ticketmaster to offer gift cards in the future:
Partner with retailers
Ticketmaster could partner with major retailers like Walmart or Target to sell co-branded Ticketmaster gift cards in stores. This avoids the need to build an in-house gift card program.
Digital-only gift cards
Rather than physical gift cards, Ticketmaster could sell digital gift cards online to be emailed or accessed on mobile. This reduces gift card program costs.
Gift card exchange
Allow customers to exchange tickets for a Ticketmaster gift card of equal value. This gives customers an alternative if they can’t attend an event, while keeping their money on the platform.
Gift card bundles
Offer gift card bundles that include tickets to popular upcoming events, like a “Gift of Concerts” package. This makes gift cards more appealing.
White label technology
License white label gift card technology to integrate into the Ticketmaster site and apps. This provides the gift card functionality with minimal risk and investment.
Impact on customers
The lack of a gift card option has the following impacts on Ticketmaster customers:
Less convenience for gift-givers
Customers cannot easily purchase tickets as gifts on Ticketmaster. Gifting tickets requires guessing the recipient’s preferences or having them select the event. Gift cards avoid this hassle.
Switching to secondary vendors
For ticket gifts, some shoppers turn to secondary gift card marketplaces like GiftCardGranny.com. Ticketmaster loses these gift card sales to competitors.
Credit card fees
Without gift cards, customers must pay ticket fees using credit cards. This results in more credit card processing costs being passed onto the customer.
Risk of unused funds
When gift-givers purchase specific event tickets that go unused by the recipient, the funds are lost. Gift cards would reduce wasted funds.
Conclusion
In summary, Ticketmaster currently does not offer gift cards primarily due to its fee-driven business model, lack of retail presence, regulatory concerns, and a desire to focus on core ticket sales over secondary products. However, gift cards present a sizable market opportunity in customer convenience and loyalty.
As an established brand with high online traffic, Ticketmaster has the scale to make gift cards successful if implemented in a cost-effective way, such as through digital gift cards or co-branded retail partnerships. Offering gift cards could provide a competitive advantage over secondary ticket sellers.
While the reasons against gift cards are understandable for now, Ticketmaster may be wise to reevaluate offering gift cards in the future as part of improving its customer value proposition. The company needs to balance carefully the costs and risks of a gift card program with the potential customer experience and revenue benefits.