Legal and Management

StubHub Hit With $5M Class Action Lawsuit Over Coronavirus Refund Policy

StubHub
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A Wisconsin man has filed a $5 million dollar federal class action lawsuit against StubHub for not refunding money he spent on a suspended NHL game.

Filed by plaintiff Matthew McMillan last Thursday in U.S. District Court in Wisconsin, the complaint accuses the ticket resale company of breach of contract and negligent misrepresentation, among other claims. McMillan is asking the court to prohibit StubHub from issuing coupons worth 120% of the purchase price in lieu of refunds and to order the company to reinstate its pre-March 20 refund policy.

According to his complaint, McMillan says he purchased two $120 tickets on StubHub in early March to attend an NHL game between the Winnipeg Jets and the Minnesota Wild. When the NHL announced on March 12 the season had been suspended due to the spread of the coronavirus, McMillan asked StubHub to refund his money.

McMillan says StubHub told him he could not receive a refund because the game had not been canceled but only postponed, despite the fact that he had purchased his ticket with StubHub’s money back guarantee policy and that he is all but certain the game will eventually be canceled. He says he was told he would be given a coupon that expires in 12 months and not the monetary refund he requested.

McMillan’s lawsuit states that for years, StubHub has touted its “FanProtect guarantee,” promising users they would receive a full money back refund if an event was canceled. The complaint notes that on March 12, StubHub president Sukhinder Singh Cassidy sent out an email to users stating that while refunds would still available for canceled events, it would also be offering coupons for 120% of the original order price as an alternative. Then, on March 25, StubHub amended its policy, stating that “if the event is canceled and not rescheduled, you will get a refund or credit to use on a future purchase, as determined in StubHub’s sold discretion (unless a refund is required by law).”

In a subsequent email sent March 30, Cassidy announced that the company had changed its longstanding refund policy because the coronavirus crisis' impact on the touring industry had put StubHub in an untenable position. “We are facing significant timing delays in recouping funds from the thousands of sellers on our platform, and expect these challenges to continue in the coming months," Cassidy wrote in the email. The new policy stated customers would be offered a 120% credit for canceled purchases as a “thank you for remaining patient in a very challenging period.”

The March 30 email went on to state that 70% of customers had already chosen that option and that StubHub would now be using the coupon alternative as its “standard policy for canceled events, with refunds available in jurisdictions where they are required.”

According to McMillan's complaint, neither he nor other StubHub customers were informed of or agreed to this new policy.

“Instead of instituting responsible financial transaction policies, (StubHub) made it their practice to pay ticket sellers before the event had occurred, exposing themselves to the possibility that they would be left holding the bag (or have to ignore their own guarantee and cheat their customers) if an event was cancelled and they could not promptly collect from sellers,” the complaint states.

McMillan's attorney Nick Coulson tells Billboard StubHub’s conduct is egregious.

“Dumping promised refunds for expiring coupons during the time of greatest financial suffering in recent history is cruel and wrong,” Coulson says. “Especially because people have no idea if they'll even be able to use the coupons -- we don't know what the next 12 months are going to look like. To the extent that StubHub claims financial constraints have forced its hand (into its customers' pockets), those constraints are entirely of its own making. Through this action, we hope to provide people some small bit of relief during this uncertain time.”

A spokesperson for StubHub told Billboard the company does not comment on pending litigation.