Service Fees: In or Out for Performing Arts Ticketing?
Use good sense
When it comes to performing arts tickets, there is no real reason to separate a ticketing or credit card fee. Although some people do this and list these fees as a convenience or service fee. We say there is no real reason because you probably wouldn’t allocate an orchestra fee, bookkeeping fee or cleaning fee, for example. Use your good sense! If there is no logical reason that an event ticket should include a separate service fee, then keep this cost embedded in the price of the ticket.
History of the service fee
Ticket buyers have become used to seeing service fees for performing arts ticketing, as well as for any other event ticketing. Ticketmaster was known to include service fees about 30 years ago. Back then, computer systems were very expensive for venues, and providing the convenience of placing a telephone order rather than driving to the venue and purchasing tickets was indeed a valuable service, meriting a service fee.
Tacking on service fees became a very profitable revenue stream – extra revenues that the ticketing company can share with the venue. Today, there is not just one fee but many. We have seen situations where there is a ticket service fee, then a delivery fee, then an email fee. Fees can get to upwards of 40% the cost of the ticket! This is why Stubhub uses an all-in pricing technique.
The psychology of pricing
Psychology is fascinating when it comes to pricing! The reason almost all retail prices end in .99, and that that the has been the practice for over a century, is because our brains focus on the bigger items and less on the details. When we see a price of $4.99, our brain quickly sees 4 bucks and some change. If we see $5.00, our brain quickly sees 5 bucks. We all know that $4.99 is basically the same as $5.00, but our brain focuses on the first number.
When it comes to ticketing, and if the service fee is not high, most ticket buyers will tend to dismiss it. Paying a $2 service fee on a $28 ticket is not that problematic. And it allows the performing arts organization to say their tickets are $28, rather than $30. When customers tell each other about prices or read about them in the paper, the service fees are never mentioned, only the ticket price.
So if one performing arts organization includes the service fee in the price of their ticket, and another keeps it separate, the one keeping it separate will sound like they have lower ticket prices.
What we recommend
In the name of ticket transparency, most customers do not really notice a small event ticket service fee. For performing arts venues, this means $2 or less, or about 8% of the ticket value. If you do, you may anger your customers. But, by all means, feel free to tack on the small fee. It provides more revenue, and most customers won’t mind.
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