Ever since the upcoming Papal visit in Philadelphia was announced, my husband and I knew that we had to take our three kids into the city and attend the Pope Francis’ speech and Mass. Who knows whether we would ever have this opportunity again? After months of planning our weekend, we soon learned that we had to register for free tickets to attend the two events. And we tried – only to be shocked with our experience.
Never in my life have I ever seen tickets sell out so quickly. The first run lasted four minutes. The second and third only took two minutes each. Even more surprising is the appearance of these tickets on eBay and Craigslist within seconds after the purchase window closed. The price? Upwards of $1,000 each – for a ticket that was originally free.
Pope Francis is certainly not the only one affected by scalpers. Earlier this year, the annual experimental community and art festival Burning Man and even Republican presidential candidate Donald Trump were impacted. Scalpers are manufacturing fraudulent tickets, asking for four times over the face value, and shutting out eager consumers from ticketing e-commerce sites. It’s frustrating for buyers, and it’s not the experience event organizers want associated with their brand.
The secret digital science behind scalping
More people have discovered how lucrative scalping can be, thanks to the digital economy. Whether they’re making a quick couple hundred dollars or amassing as much as $300,000 a year, scalping has never been easier. James Fortner of Glassboro, N.J., who is selling tickets to various Papal events on Craigslist for $100 each, said in a recent USA Today article, “I figured if I’m sitting here, hitting refresh a thousand times, I might as well get paid for it. As far as I can see, it’s the American way.”
Whether you agree with Mr. Fortner or not, one thing is clear: Our perception of scalping needs to change. No longer is it limited to the guy hanging out in a back alley or parking lot who’s looking to unload a couple tickets. As some startups have shown, scalping is big business – complete with a global network.
According to a nonprofit organization that advocates for consumers victimized by deceptive scalping activity, there are five digital approaches popular among scalpers:
- Outsourcing. Scalpers pay people around the world to man computers. By reaching more than one server running the ticketing e-commerce site at the same time, scalpers are can increase their chances of picking up tickets.
- BOTS. These automated programs search for tickets at the exact moment they go on sale. They move faster through the ticketing process than individual consumers can.
- Portfolio of numerous accounts. As a loophole to restrictions such as purchase maximums per address and credit card, some scalpers obtain multiple purchase accounts, order and ship tickets to multiple addresses, or use numerous aliases. They get these accounts by using stolen identification information or purchasing from hackers in the underground data market.
- Appearance of digital legitimacy. Website designs, URLs, and search engine advertising are all used to help scalpers appear as a legitimate partner of a particular artist, team, or venue. Unfortunately, this tricks buyers into thinking that they are purchasing tickets from a secondary market – especially when those seats show as available on the event site.
- Invisible tickets. By using the trickery of approach #4, some scalpers post the sale of a ticket weeks before the e-commerce site is open. For unsuspecting consumers, this may sound like a great deal. However, this means that the consumer is paying a premium to have someone acquire the tickets for them. What if the scalper is unsuccessful? The buyer will get the money back – maybe.
Analytics and Big Data: Weapons in the battle against scalpers
For some event organizers, scalping is a painful subject matter that is unrelenting, unforgiving, and unsolvable. However, many artists and event fans still refuse to fall victim to it. For example, Burning Man fans are circulating petitions on Change.org and actively exposing bad sales practices and scalper names on social media.
Although these are all good – and sometimes amusing – tactics, event organizers can do much more. The inquiry from SAP Center for Business Insight “3 Ways to Fight Fraud, Waste, and Abuse in the Supply Chain” recently revealed that the rise of advanced analytics and Big Data is giving companies an opportunity to proactively manage the risk fraud and abuse. Whenever a ticket is purchased, a tremendous amount of data is generated about the buyer. By automatically and remotely monitoring purchases in real time, they can quickly detect patterns that uncover and prevent fraud.
Although building a smarter ticketing e-commerce site takes work, it’s an investment in the overall customer experience. Otherwise, organizers risk exposing themselves to potential scrutiny from consumers, stakeholders, management, media, and regulators.
Want more on how our increasingly connected world is creating new opportunities — as well as new challenges? See The Hyperconnected Economy.