SBJ/September 7 - 13, 1998/No Topic Name
Refund policy has NBA teams bouncing off walls
Published September 7, 1998
The NBA's ticket refund policy may be sending goodwill to basketball fans, but it is causing some major headaches for the league's 29 teams.
Ticket managers are just now preparing to deal with the refunds as the NBA lockout enters its third month. The likelihood of a work stoppage is becoming a distinct possibility and the potential of the cancellation of the entire season looms.
To placate fans, the NBA is promising season-ticket holders cash refunds plus 6 percent interest for any games canceled. Refunds will be paid automatically to season-ticket holders at the end of each month. Individual ticket holders will receive a cash refund or tickets to a later game.
A major problem, team sales managers said, is creating a method to process the refunds, especially for season tickets that have been bought with more than one credit card or through business accounts.
"This is a complicated issue, and it's not as easy as it sounds," said one sales executive at a leading NBA team. "Some season-ticket accounts are split four ways, and others are split through company accounts, so you can't apply anything uniformly. You have to go account by account."
Another NBA team sales manager, who declined to be identified because of the million-dollar fines threatened by the NBA against teams that talk publicly about the lockout, said his team hasn't yet figured out the best way to process the refunds.
"It's going to be difficult, and it's a pain," the sales manager said. "Let's say you've paid $2,000 for 45 games, and I have to prorate how many games are canceled. It isn't easy from an information systems standpoint."
But by offering cash refunds, the league is sparing the teams from having to process the refunds through the various credit card companies.
"If there is a refund through the credit card, the fee would be paid back to the team or to the ticket service company," said Laura Hunter, assistant vice president of corporate affairs for NationsBank Corp. "But with a cash refund, the credit card transaction is handled as if there was never a refund."
The NBA is hardly moved by complaints about processing the refunds.
"There is the understanding that fans have made a substantial emotional and financial investment and the [refund policy] is just the right thing to do," said NBA spokesman Chris Brienza.