It’s frustrating when you go to purchase event tickets online and see additional fees tacked on to the base ticket price. One of the most common fees you’ll encounter is a mysterious “$1.00 Transaction Fee” from Ticketmaster. So what is this extra dollar all about? Here’s an in-depth look at why Ticketmaster charged you that pesky extra buck.
The History Behind Ticketmaster’s Fees
Ticketmaster is a dominant force in the event ticketing industry. The company sells tickets on behalf of concert promoters, sport leagues, theaters, and more. In addition to the base ticket price, Ticketmaster tacks on a variety of fees to each order. These can include:
- Service fee – Covers the cost of processing the ticket order
- Facility charge – Pays for upkeep of the venue
- Order processing fee
- Shipping fee – For hard copy tickets that are mailed out
- Convenience fee – For the ease of ordering tickets online
Ticketing fees have long been a source of frustration for customers. The fees can sometimes amount to over 25% of the base ticket price. There have been numerous lawsuits and petitions over the years aiming to cap Ticketmaster’s fees.
In the mid-90s, Pearl Jam took a public stand against Ticketmaster’s fees. They refused to use Ticketmaster for their tour, prompting the U.S. Department of Justice to investigate Ticketmaster’s practices. While prices did come down for a period, fees inevitably crept up again.
Why the $1 Transaction Fee?
Specifically, let’s examine the ambiguous $1.00 transaction fee Ticketmaster slaps on virtually every order:
- It skirts around caps – Some states have enacted laws capping the total amount Ticketmaster can charge in fees. The $1 transaction fee is likely a way to extract more revenue while technically complying with fee caps.
- It adds up – While just $1 per ticket, this fee rakes in significant added revenue across Ticketmaster’s 400 million+ ticket sales per year.
- It counts as a separate cost – Having a separate $1 line item fee apart from the service fee lets Ticketmaster claim the bulk of fees go towards servicing costs.
So in short, the $1 transaction fee is a clever work-around that nets Ticketmaster tens of millions in extra yearly revenue. Some see it as an underhanded tactic to squeeze more money out of ticket buyers.
Breakdown of Typical Ticketmaster Fees
To fully understand why Ticketmaster charges so much in fees, let’s break down a typical fee structure on a concert order:
Fee Type | Fee Amount |
---|---|
Ticket Price | $50.00 x 2 tickets |
Service Fee | $15.00 |
Order Processing Fee | $5.25 |
$1.00 Transaction Fee | $1.00 |
Delivery Fee | $5.95 |
Total Fees | $27.20 |
Order Total | $127.20 |
For two $50 tickets, we’re looking at $27.20 in add-on fees here. The ambiguous $1 transaction fee accounts for part of those tacked-on costs.
Does the $1 Fee Actually Cover Transaction Costs?
Ticketmaster justifies its fees by saying they cover the costs of processing transactions and delivering tickets. But does a seemingly arbitrary dollar fee really relate to any tangible costs?
Let’s consider Ticketmaster’s potential transaction costs:
- Payment processing – Around 2-4% for credit card payments
- Website hosting fees
- Call center staffing for customer service
- Cybersecurity and fraud monitoring
These costs likely add up to more than a dollar per transaction. That said, $1 is still a rather nominal amount that customers perceive as nuisance fee. It becomes harder for Ticketmaster justify their $15+ service fees when they’re also charging a buck “just because.”
Is Ticketmaster Really a Monopoly?
Ticketmaster is sometimes accused of being a monopoly in the ticket sales market. While they are the dominant player, they do still face some competition:
- AXS – Owned by AEG, it sells tickets for AEG venues and events
- AltTix – Ticket sales for midsize music venues and theaters
- Ticketfly – Focuses on indie music and small scale events
- TickPick – A no-fee secondary ticket marketplace
- SeatGeek – Combined primary and secondary ticket sales
However, Ticketmaster still controls over 70% of the primary event ticketing market. They are the exclusive ticket vendor for many major venues and sports franchises. This lack of competition likely allows Ticketmaster to get away with padding fees like the $1 transaction charge without repercussion.
Is There Any Way to Avoid the $1 Fee?
As an everyday ticket buyer, is there any way to circumvent that pesky $1 transaction fee? Here are some options:
- Buy direct – Some events let you purchase directly through the venue box office to avoid fees
- Shop resale – Resale sites like StubHub often include fees in ticket price upfront
- Find no-fee sellers – A few ticket sellers like TickPick don’t charge any fees
- Go paperless – Opt for electronic tickets to avoid delivery fees
- Buy season passes – Sports season tickets often come as a package with fewer per-ticket fees
For high demand shows or games, buying direct or finding a no-fee seller likely isn’t feasible. But for smaller events, avoiding third party vendors like Ticketmaster could be an option. Going paperless and buying bundled season passes also lets you bypass some tacked-on costs.
The Future of Ticketmaster Fees
It seems customer frustration over mounting ticketing fees is reaching new heights. With anti-trust scrutiny growing, could we see any changes?
- Fee caps – More states could pass laws restricting fees the way Connecticut and New York have
- Pressure from big artists – Major performers may increasingly demand lower/no fees
- More suits & investigations – Legal and government action seems imminent
- Competition – Alternative ticket sellers could gain more market share
While Ticketmaster maintains dominance now, they may be forced to scale back unpopular fees to retain clients and avoid regulators. But for now, the $1 transaction fee remains an opaque, ubiquitous charge in the ticket buying process.
Conclusion
That mysterious $1 transaction fee from Ticketmaster is a sneaky tactic to extract more revenue from customers. While the company claims it covers processing costs, a dollar seems arbitrarily low for that justification. As a dominant ticketing vendor, Ticketmaster imposes such fees to further maximize profits. But with growing public disdain over add-on costs, we could see more transparency and moderation in their pricing model down the line.