What Makes Sense In Refund Policies?

Adam Natale writes about Fractured Atlas’ development process for the ticketing module of their ATHENA software. They are talking to different sized performing arts organizations at Community Design Sessions (CDS) to get feedback about the design and assemble a wish-list of features. His discussion of the software’s use for ticket exchanges caught my attention.

“So, in each CDS, I brought up the fact that the software should allow for patrons to easily exchange their tickets. Most people in the room freaked out — enabling patrons to do this would result in complete pandemonium! And then my dear friend at Theatre Bay Area, Jamye Divila, a box office administrator and guru, sided with me. She said something along the lines of, “We do over-the-phone exchanges for subscribers constantly and it takes a lot of staff time to do this. What if we could automate the process and simply build permissions and restrictions into the software so that it doesn’t allow the patrons to do things they shouldn’t be allowed to do?” Suddenly, the air cleared. There was a collective “Oh, software can do that?” sigh that filled the room. Yes, software can do that.”

This made me wonder what sort of criteria people were using to grant refunds that they felt they could provide good customer service via a set of programmed rules. Often the criteria I use is based on judgments that are very human. The death in the family/grave illness, you don’t really question much and given that people know this, it can easily used as an excuse. How can a computer program know that a rock slide was just reported and traffic can’t get through from one direction? Granted, if the program is designed well, the ticket office could reprogram the conditions to make it easy for anyone to request refunds in this case. There are many occasions when nuanced decisions need to be made and I suppose it will always have to be a human that makes them.

Refunding does take a lot of staff time so I can definitely see the benefit of having the computer handle refunds in the cases when snow storms or sick performers force a cancellation. In cases when you have multiple performances and can have the computer offer an exchange to another performance or show of equal value to avoid processing a refund, there also a benefit. It would certainly also be a boon in extending subscriber/donor exchange benefits to people on a 24 hour basis. Those organizations like my own that have single engagement events, might opt to create criteria where anyone who has purchased an average of X single tickets a year since 2005 will be allowed to exchange because they are clearly loyal.

That raises the question about the whys of exchange and refund policies. Why do we not allow refunds? I imagine commitment is probably one issue. We want people to follow through on their decision to attend, especially in these days when there are so many competing choices. For the record, I don’t think people are waiting until the last minute to buy tickets because of the no refund policy. They are generally uncertain about what to do in the face of so many choices.

It is certainly logical to resist granting refunds given that it is a time consuming process. Selling the tickets can be too, but paying employees to give money back has a certain sting to it. If a computer could process the refund for you, would you be more willing to grant a refund?

I also don’t utilize as monolithic a response to refund requests as I once did. I sense this is a better stance in the face of all the options people have. But is it diminishing the perceived value of what we offer to do so?

Is it time to reassess the practice of refusing refunds given that people seem to be waiting until they are absolutely sure they want to attend? Is there an opportunity to appear more customer friendly by having a more liberal policy given that 90% of your audience isn’t buying until the last three days? My suspicion is that most people won’t have any awareness of your policy until they want to use it so a change won’t generate general good will. If you really go out of your way to loudly publicize a very liberal policy, you may really undermine the perception of your product unless you do it very cleverly.

Limitations on refunds and exchanges are a part of everyday life so I am not suggesting that it should be scrapped for performances in order to meet changing expectations. I am just using the occasion of this post to suggest looking at policies to assess if they are still valid in the context of changing purchasing and attendance behaviors and how they play into your goals for community relations.

About Joe Patti

I have been writing Butts in the Seats (BitS) on topics of arts and cultural administration since 2004 (yikes!). Given the ever evolving concerns facing the sector, I have yet to exhaust the available subject matter. In addition to BitS, I am a founding contributor to the ArtsHacker (artshacker.com) website where I focus on topics related to boards, law, governance, policy and practice.

I am also an evangelist for the effort to Build Public Will For Arts and Culture being helmed by Arts Midwest and the Metropolitan Group. (http://www.creatingconnection.org/about/)

I am currently the Director of the Grand Opera House in Macon, GA.

Among the things I am most proud are having produced an opera in the Hawaiian language and a dance drama about Hawaii's snow goddess Poli'ahu while working as a Theater Manager in Hawaii. Though there are many more highlights than there is space here to list.


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4 thoughts on “What Makes Sense In Refund Policies?”

  1. Definitely a good topic to reassess.

    I am surprised you didn’t mention Inventory Management as a reason for restriction on exchange. Our concert restrictions are based on projected interest, we restrict where we can’t afford to limit purchase potential. And that also supports our single ticket add-on activity.

    • Ah, good point Jacalyn. It also occurred to me after I posted that discounting is also an area to limit refunds on. Just as you get better options when you pay for a higher airfare, you don’t want to be refunding tickets people got at a deep discount. Especially if you offer tickets through a service like Groupon. Not only are you giving away the tickets for half price and then having some of it go to Groupon, you would end up paying someone to process a refund on it. Insult to injury indeed!

  2. In Germany we have just about 150 theatres and opera houses largely subsidized by the local or state government. The sytem is build on ensembles and an extensive repertoire. Subscribers have always had the chance to exchange there tickets either for free or for a small fee, sometimes in steps: first exchange for free, second with a low fee, third and last exchange for a large fee. for subscribers there are no refunds – but a voucher for either the same performance (easy with a repertoire) or for any performance.

    this is definitely one of the USP’s for the subscription systems that are in use.

    nevertheless: over the last 20 years or so we did see in Germany a recline in fixed subscriptions, but it might have been worse with the exchange policies …


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