I have nothing against Darren Rovell, but after reading his article, Final Four biggest-ever test of digital tickets I realized how little people know or understand about the ticketing business, specifically the resale of tickets and how paperless tickets work. On the other hand, Dan Gilbert (owner of the Cleveland Cavaliers) is simply a genius. Why? Well let me tell you, he bought Veritix which solves the biggest problem the ticket industry encounters.

As an owner of a ticket exchange I deal with rampant fraud, and it’s not what you think it is.

Just the other day Christopher Ryan bought $9,000 worth of Ultra tickets. Obviously this transaction got flagged in our internal system, but American Express approved the transaction. Christopher was willing to do anything to prove he was legitimate, he sent us a copy of his ID and was willing to pick up the tickets in person.

Paperless Tickets - Why they are good

You would be shocked if you knew how easy it is for criminals to access stolen credit card numbers and other personal information.

 

Paperless Tickets – A Real Solution

Dan Gilbert’s solution to one of the biggest problems in the ticket industry: Flash Seats. Flash Seats, also known as paperless tickets, requires you to use your credit card to enter the venue. Though Gilbert may not have been thinking about the exact issue of fraudulent transactions when creating Flash Seats, I am sure he was thinking this would improve the ticket industry.

With Flash Seats fans are required to show their physical credit card for entry, which eliminates the ability for individuals to use stolen credit cards (via online purchases). There are still flaws and loop holes, but we estimate this method of entry eliminates 95% of all fraudulent transactions. Dan – email me at brett at tickpick.com and I’ll tell you a few things that you may want to change (I can’t disclose them here).

Flash Seats is not the only company that offers paperless tickets. You guessed it right: TicketMaster also offers paperless tickets. The difference is that TicketMaster’s paperless tickets are non-transferable. Fan First (a lobbyist group backed by TicketMaster) is battling Fan Freedom (a lobbyist group supported by Stubhub) on the legality of the resale of tickets (specifically paperless tickets). This corporate driven legal battle is not new. If TicketMaster allowed the resale of paperless tickets (even with some limitations as to the resale price) not only would they trump Flash Seats, but they would gain an invaluable advantage: the transfer of any ticket originally issued by TicketMaster would then have to be transferred through their system.

 

Paperless Tickets Stubhub – Selling, Guarantees & Problems

Darren – nothing personal, your article was informative and I am glad you have brought Paperless tickets to the public eye. Most of what you said is right, such as:

“The controversy over digital ticketing is over transferring & selling the seats.”

However, the statement below displays your biased opinion which probably has something to do with ESPN & Stubhub partnership / relationship:

“To bolster their case (paperless tickets), they say it’s also to cut down on fraud, even though other secondary ticketing sites guarantee that the tickets are real or offer an immediate replacement.”

This statement is simply not true.

Yes, sites like Stubhub and TickPick offer guarantees that tickets are real, and yes, if there is a problem with the tickets at the venue you can call and get replacements. But this is really a money back guarantee, not a guarantee that you are going to get in (although 99% of legitimate transactions go seamless). A couple years ago I had four tickets to a concert, I sold two on Stubhub and used the other two. The next day I got a call from Stubhub: the buyer couldn’t get in. Afterwards I figured out that by accident I sent the buyer the same two tickets I used.

Issues caused by etickets (i.e. tickets which are emailable):

Problems caused by the seller:

  1. Human error: seller sends the wrong tickets to the buyer by accident
  2. Double sale: seller sells the same tickets on different websites (occurs with larger sellers)
  3. Intentional fraud: seller sells multiple copies of etickets

Problems caused by the buyer:

  1. Stolen credit card: buyer uses stolen credit card (most likely to sell)
  2. Friendly fire: real consumer buys tickets & files a chargeback (with their credit card company)

Both problems caused by the buyer will result in the merchant (TickPick or Stubhub) not to receive payment yet owe payment to the seller.

Note: On TickPick we let users sell paperless tickets, however, you cannot sell paperless tickets on Stubhub. That’s because for a middleman to make sure that the transfer is successful it requires quite a bit of manual effort, thus customer support.

In Summary: Paperless Ticket Systems Are the Future

Capitalism will win, Criminals will lose and Bureaucrats will remain the same.

 

Brett Goldberg imageBrett Goldberg is an entrepreneur, live event fanatic and ex-investment banker. He is the Co-Founder of Tickpick, a ticket marketplace that allows users to buy, sell & bid on tickets to sports, concerts and other live events. TickPick strives to increase transparency and efficiency within the ticket industry.

Follow Brett on Google Plus or Twitter.

Also If you are interested in reading more about this topic check out The Future of Ticket Scalping Laws on TicketNews.

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