StubHub begins warning customers that some paperless ticket sales might be refunded

Acknowledging that paperless tickets can present certain challenges for ticket buyers, StubHub has started using a pop-up disclaimer on its Web site that stresses the company will find alternative tickets or issue refunds for some paperless ticket sales.

Exactly when the company began using the disclaimer is unknown, but the company is perhaps the first resale marketplace to offer such a disclaimer. Earlier this year, StubHub President Chris Tsakalakis told Sports Business Journal that the company was still formulating its paperless ticket resale policy, but that it would continue to inform consumers about some of the drawbacks to the new technology.

“People often talk about the virtues of paperless ticketing, and there are some, but there are also two main negatives: It takes away fan rights and eliminates resale competition. And with no competition, you usually get a lower level of service and higher prices,” he said. StubHub is the nation’s largest ticket resale marketplace, according to TicketNews’ exclusive industry rankings.

On the Web site as a customer goes through the process of buying a ticket, the following disclaimer pops up (see the screen shot below for a Justin Bieber ticket purchase):

“In a few cases tickets may be restricted to Paperless Ticket Delivery. Should this be necessary, StubHub may cancel the order and attempt to find suitable replacements according to our Fan Protect Guarantee or your money back.”

A company spokesperson did not respond to questions concerning the disclaimer. StubHub’s FanProtect Guarantee reads, in part: “You will get your tickets in time for the event. Your tickets will be authentic and valid for entry. You will receive tickets comparable to or better than the tickets you ordered, or your money back. You will be refunded if the event is cancelled and is not rescheduled.”

Paperless ticketing technology primarily is being pushed by Live Nation Entertainment’s Ticketmaster division and by Texas-based company Veritix as a secure, easy to use alternative to traditional paper tickets. When using paperless tickets, to gain entry to an event, the ticket holder often swipes a credit card or magnetized identification card.

John Mayer’s upcoming summer tour will utilize paperless tickets, and last year Miley Cyrus’ tour was completely paperless. Despite the touted ease of use, the technology has been criticized by Tsakalakis and others for its lack of transferability across multiple platforms. Both Ticketmaster and Veritix allow for tickets to be transferred through their proprietary systems, but not over each others or different systems.

The lack of transferability is designed in part to cut down on ticket resales through the secondary market, though brokers have often resold paperless tickets and simply accompanied buyers to the gate and swiped them in in person.

Computer giant Apple is also reportedly interested in patenting and launching a digital ticketing system through its iTunes store.