The Truth About Service Fees

Ever wonder about those pesky service fees you get charged on ticket brokers sites?

The truth of the matter is, if you're buying tickets on the secondary market (i.e. StubHub, Ticket Liquidator, and yes, even TicketProxy), 9.9 times out of 10 you're paying above face value.  That's the way this secondary market works, you have a limited comoditiy with high demand... once it sells out the prices rise; capitalism at it's best.  So now that we're clear on that... FEES!

This is where ticket brokers make their 'commission'.  Most times the broker you bought your ticket from doesn't actually own the ticket, it's owned by another broker!  So broker 'A', who originally bought the ticket sells it to broker 'B' at a 30% premium, broker 'B' then lists his ticket on Craigslist with a link to his website.  You, the consumer, go to the website and see that tickets for XYZ Band are selling $125/each.  But you figure it's worth it, the face value was $89 and it's been sold out for a while now.  You click the link to buy a ticket and BAM! service fee, in your face!  Suddenly that $125 ticket becomes $145 + $20 for shipping.  "That ain't right!", you think to yourself... but most consumers give up by this point and click "Buy" anyway. 

You probably already guessed what the service fees are all about... but another interesting tactic brokers take is called 'markdown'.  Markdown is when a broker lists another brokers tickets at a discounted rate (i.e. less than what he's actually paying).  So when you're looking around at the listed tickets, you might actually think you're getting a deal, but little do you know what lurks behind that "Buy Tickets" button... BAM! service fee... in your face!  :)  Whatever the broker losses in markdown, rest assured he'll make up for in the service fee! 

The greediest of the greedy employ markup AND service fees together.  Take the photo at the top of this blog for example, the Madonna tickets are listed for $1950, which is a 30% markup from what the holding broker is selling them for.  In addition there's an additional 3% handling fee (a nice way of saying service fee). 

I guess the point is... beware, most brokers will surprise you with service fees at checkout.  So search for a site that doesn't.  Also don't be mislead when the same ticket looks cheaper somewhere else... the broker will make up for that markdown in the service fee. 

Sites like StubHub take a 15% cut of the brokers sale, and another 10% of the consumer, which is absolutely absurd; seriously, the consumer is already paying above face value, and then StubHub is gonna stick them with another 10%?  That fee should rest solely on the broker, in my opinion.  To add insult to injury, most consumers are probably not aware that brokers actually mark their StubHub inventory up 10-15% just to compensate for those fees... so the consumer could really get a better deal elsewhere.  The only saving grace to StubHub is their outstanding customer service and their convenient pickup locations.

I beleive that in general, service fees are misleading, dishonest, and simply bad business practice.  Unless they're clearly stated up-front.  StubHub, well their just a little too greedy, but at least most people know where they stand with them.  As for us, I suppose it's not fair to keep it a secret... we have a markup typically between 10-20%, but it's shown in the ticket price and we DO NOT have any additional service fees to surprise consumers with at checkout, never will.  As an added bonus, if you've bought from us once, you'll soon be getting a previous customer discount for future purchases.  Follow us on Twitter... and we offer other discount codes!  I'd like to think that we at TicketProxy are the antithesis of greedy... of course that's not entirely true, or else we wouldn't run a secondary ticket marketplace. lol :)  pssst... us the discount code: TPTWEETS for discount on your next ticket purchase.

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