The move to online ticket sales has clearly benefited consumers, but creates challenges for merchnats. One such challenge stems from the high resale value of tickets, combined with an increase in the liquidity of secondary markets.
The global online event ticket market is strong and growing, valued at $30 billion annually, and exhibiting an impressive 19% compound annual growth rate. In the US alone, revenue is expected to exceed $10 billion in 2017.
The move online has clearly benefited consumers, but the changing business landscape creates challenges for ticket sellers. One such challenge stems from the high resale value of tickets, combined with an increase in the liquidity of secondary markets. This combination attracts fraudsters who are looking for a quick score. They can buy expensive tickets with stolen credit card information and then easily sell them secondhand.
We compiled a comprehensive report to share our findings, based on reviewing hundreds of thousands of online event ticket orders. In this blog post, I’ll share some findings from our full report.
Early birds are lucrative and safe
Die-hard fans tend to buy expensive seats long before an event, and this is reflected in our data. We analyzed the timeframe between the purchase date and event day to see if we could glean a meaningful pattern for fraud prevention purposes.
Orders made 60 days prior to an event are – on average – worth over twice as much as orders placed day-of. And approval rates for these orders are 4% higher. As the day of the event nears, approval rates and order values steadily decrease, and the rate of fraud attacks leaps. A fraudster is five times more likely to be behind an order made on the day of an event than an order made 60 days before.
We also took a closer look at the 24 hours leading up to an event and found that approval rates actually remain quite steady in the final hours before the event, hovering between 91% and 93%. The reason behind this is likely that fraudsters are calculating: when they buy tickets online they need to leave themselves enough time to turn them for a profit.
Which events do fraudsters prefer?
With online tickets covering such a wide range of entertainment options, fraud teams need to look at risk as it manifests across various events.
We broke down online event ticket sales into categories and analyzed the associated risk. Sporting events is the safest category, where merchants can approve at least 95% of orders. Theater tickets came in second (with safe approval rates near 92%), followed by concert tickets (88%) and festival tickets (near 80%).
The differences between the categories are quite significant, with an 18% difference in approval rates between the safest and riskiest. In fact, orders for festival tickets are four times more likely to be targeted by fraudsters when compared to orders for sporting event tickets, perhaps due to these mass events’ appeal to younger crowds. Nevertheless, merchants can and should approve 4 of 5 festival ticket orders.
Mapping out the risk
Driving accuracy in decisions involves corroborating the story behind an order. With physical goods, the shipping and billing address – along with the credit card BIN – can be revealing. But when selling digital tickets, the IP address takes center stage. Many-a-fraudster try to reroute their IP address to appear as though it’s coming from somewhere else – preferably from the BIN country. But with reliable IP detection in place, understanding geographic trends can help drive accuracy.
These are just some of the insights included in our special report on fraud in online ticket sales. The full report includes a breakdown of events, a unique look at false declines, and specific segments that merchants tend to single out despite them being quite safe. For more insights and fraud prevention best practices, download a complimentary copy of the report.