DENVER — Crystal Chaparro wanted to do something special with her teenage, guitar-playing son, so she started browsing StubHub for tickets to Carlos Santana at Red Rocks Amphitheater.
"It's my son's first concert, and who would not want to go see Carlos Santana at Red Rocks, of all places," said Chaparro.
She found what seemed to be a good ticket price, but after she entered her personal information, she saw the real bottom line. For two, $342 tickets, StubHub charged $245 in fees — more than a quarter of the total cost.
"It still makes my tummy drop," she said. "It just felt wrong. It just did not feel right at all."
StubHub experimented with all-in pricing in Jan. 2014 but switched back to the back-end fee price structure in Sept. 2015, according to a study published by the Institute for Operations Research and the Management Sciences. The study found that StubHub's customers spent more money through the back-end fee structure. The study also found that consumers upgraded to higher-quality products when they initially observed lower prices.
The back-end fee structure has caught the attention of federal regulators.
"What we've seen is that this has just gotten out of control," said Kiren Gopal, senior counsel with the Consumer Financial Protection Bureau, which has been taking action on so-called junk feesin banking andmortgages. "There's a disturbing trend in the economy where corporations are cheating instead of competing. Consumers are essentially lured in with a low price, but when they get to the register or to the online checkout, they discover that the price was never really available."
The Federal Trade Commission is proposing a rule to ban junk fees, "which would include bait-and-switch pricing tactics that hide mandatory fees and deceive consumers about the price."
Colorado is ahead of the consumer protection curve in this area. In June, Governor Jared Polis signed House Bill 24-1378 requiring "all-in pricing" for ticket sales, meaning sellers will have to include fees upfront in ticket prices. The law takes effect on Aug. 7. A StubHub spokesperson said the company plans to comply.
StubHub declined our Denver news partners' request for an interview but said customers can use a filter on the site to see the fees early on.
Chaparro bought the Red Rocks tickets despite the fees. She said she was willing to pay them off over time for memories with her son.
"I decided to buy them because I was worried they would go up in price," she said. "And I knew that, eventually, I would be able to pay it off and that my memories with my son are much more priceless than the ticket fees."
