The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Consumer Confidential: StubHub Has A Confused Response To Its Confusing Web Page

By David Lazarus, Los Angeles Times (TNS)

When businesses screw up, they too often duck responsibility and tell customers to pound sand. Think of United Airlines recently saying it wouldn’t honor thousands of trans-Atlantic tickets mistakenly sold for as little as $75.

When consumers mess up, however, many businesses don’t hesitate to say that customers are responsible for any and all mistaken transactions, no matter how obvious it may be that an error occurred.

Rob Robinson’s experience with the online ticket seller StubHub shows how hard it can be to get a company to listen to reason.

Robinson’s wife, Linda, went on StubHub last week to purchase three tickets to a performance by the Los Angeles Philharmonic at Disney Hall.

She spent $299.69 for what she thought would be good seats. It wasn’t until she subsequently printed the tickets that she discovered she had bought $299.69 worth of parking spaces, not concert tickets.

“It’s actually an easy mistake to make,” her husband told me.

He’s right. I went to StubHub and ran a search for LA Philharmonic tickets. Two listings came up for March 12, one for the concert and one clearly marked “parking passes only.” They were right next to each other.

Trouble is, if you accidentally click on that second listing, you go to a page that asks, “Where do you want to sit?” And if you click the link below the available prices, you go to another page that lists “section” and “seats.”

So even though you’re buying parking spaces, StubHub’s surprisingly confusing design indicates to casual observers that seats to an event are being purchased.

Unlike Ticketmaster, which directly sells tickets to events, StubHub describes itself as a resale marketplace where people “can buy or sell tickets without restrictions or limitations.”

The website prides itself on its customer safeguards. StubHub’s FanProtect policy guarantees that you’ll receive a credit or refund if there’s a problem with your tickets or an event is canceled.

Yet when Robinson, 69, contacted StubHub to explain his situation and request a refund, he was given the brush-off.

“They told me they wouldn’t give us a refund or credit for another performance,” he said. “The best they could offer was for us to relist the parking spaces on their site and hope someone else would buy them.”
Robinson drove from his home to StubHub’s local office in downtown LA.

He once again explained what happened and pointed out how easy it is to mistakenly purchase parking spaces instead of concert tickets. Once again, StubHub’s service reps refused to budge.

This time, though, they added that they couldn’t do anything even if they wanted, Robinson said. The parking spaces, they noted, were sold through a website called Parking Panda, which is kind of like a StubHub for parking.

Mark McTamney, Parking Panda’s director of marketing, told me that the most likely scenario is that a scalper went on to his company’s site and purchased a bunch of downtown parking spaces for events at Disney Hall. The scalper then listed the spaces on StubHub to accompany concert tickets, he said.

“It had nothing to do with us,” McTamney said.

StubHub and Parking Panda are both right: This was the Robinsons’ problem, not the companies’. What’s noteworthy is the way each business responded to the situation.

Parking Panda, to its credit, didn’t hesitate to tell me that it would be open to refunding the Robinsons, though the fact that a reporter was calling might have had something to do with the company’s stand-up attitude.

StubHub demonstrated its knee-jerk inflexibility by blowing off Robinson not once but twice, on the phone and in person.

It wasn’t until Cameron Papp, a spokesman for the San Francisco company, got on the phone with me that a newfound benevolence entered the picture.

“Clearly these people tried to purchase tickets to the show, not parking,” he said. As a result, he said, StubHub will refund their money from its own pocket.

“We take these things on a case-by-case basis,” Papp explained. “We just need to make sure that the buyer is telling the truth and not trying to take advantage of us.”

That’s laudable, even though none of the service reps Robinson spoke with said anything about investigating things and offering refunds on a case-by-case basis.

I asked Papp to join me in retracing the Robinsons’ steps on StubHub’s site. I showed how even when you’ve clicked on a link to parking spaces, you’re seeing language suggesting that seats are being purchased.

“I can see how someone could get mixed up,” Papp acknowledged.

So StubHub will be fixing its site?

“No, we have no plans to make any changes,” Papp replied. “I would tell people to just pay attention to what you’re looking at.”

And I’d tell people to think twice about buying tickets from any website that doesn’t care enough about its customers to ensure the safest possible shopping experience.

Clearly it’s important that consumers be responsible for their actions. I told Robinson from the get-go that since this was his wife’s screw-up, he should be prepared to eat those $300 worth of parking spaces.

But that doesn’t let StubHub off the hook. If a site has a glitch that makes it look as if customers are buying one thing when they’re actually buying another, that would seem to give the benefit of the doubt in all cases to customers.

And if the company’s policy is to look at problems on a case-by-case basis, it should prominently tell people that _ and then act accordingly.

ABOUT THE WRITER
David Lazarus, a Los Angeles Times columnist, writes on consumer issues. He can be reached at david.lazarus@latimes.com.

(c)2015 Los Angeles Times, Distributed by Tribune Content Agency, LLC

Photo: Mike Mozart via flickr

Consumer Confidential: Costco-Visa Deal Shows Why Medicare Should Negotiate Drug Prices

By David Lazarus, Los Angeles Times (TNS)

Costco’s deal to replace American Express with Visa as its exclusive credit-card company highlights an economic principle that should surprise no one.

Consumers benefit when a business uses its market power to negotiate lower prices and passes along the savings to customers.

Conservatives have championed such market forces for decades, arguing that if government regulators just got out of the way of businesses, consumers would be the big winners.

That is, unless we’re talking about drug prices.

Medicare, the federal healthcare program, is prohibited by law from haggling with makers of prescription drugs over the prices paid by its 54 million beneficiaries.

That bizarre stipulation was put in place in 2003 by the administration of former President George W. Bush. It was part of a sweeping plan for Medicare to cover prescription drugs.

Republican lawmakers, backed by the powerful pharmaceutical industry, argued at the time that the private sector was in a better position to ensure fair pricing of prescription meds.

In subsequent years, Republicans have repeatedly beaten back attempts by Democratic lawmakers to lift this prohibition.

“Private competition works,” Sen. Charles Grassley, an Iowa Republican and a principal author of the 2003 law, declared in 2007. “The government has very little experience and a dismal track record figuring out what to pay for drugs.”

Sen. Harry Reid, the Nevada Democrat who was then the Senate majority leader, had a prudent response to this sentiment.

“The Department of Veterans Affairs is able to negotiate for lower-priced drugs,” he said. “HMOs can negotiate. Wal-Mart can negotiate. Why in the world shouldn’t Medicare be able to do that?”

Surely that had nothing to do with the almost $240,000 Grassley received from pharmaceutical interests in the 2002 election cycle, prior to his leadership role in drafting the Medicare legislation, according to the Center for Responsive Politics.

He was the Senate’s No. 2 recipient of pharmaceutical-industry money that year, after New Jersey Democrat Sen. Robert Torricelli, who received about $302,000 before quitting amid unrelated allegations of ethical misconduct.

And it’s probably just a coincidence that no industry spends more lobbying lawmakers than the drug industry. From 1998 to last year, the industry shelled out more than $3 billion, according to the center.

The reality, of course, is that conservative politicians and their profit-minded business allies have subverted market forces to ensure that Americans pay some of the highest drug prices in the world.

The United States spends almost $1,000 a person annually on prescription meds, according to the Organization for Economic Cooperation and Development.

That’s about twice as much as the likes of Canada, Japan, Germany and France, which permit their state-run insurance plans to negotiate the best possible terms with drug companies.

Now step back and admire the elegant simplicity of what Costco accomplished.

The buy-it-by-the-pallet discount retailer has been in bed with AmEx for 16 years. It was a sweet deal for Costco members.

The Costco AmEx card offered 3 percent cash back for gas purchases, 2 percent for restaurants and travel, and 1 percent back for everything else. There was no annual fee as long as you remained a Costco member.

The retailer clearly believed that accounting for about 10 percent of all AmEx cards in circulation was a big deal and worthy of special consideration from American Express. Presumably that meant seeking a lower fee to process credit card transactions.

But Costco wanted more than AmEx wanted to give up. Ken Chenault, the card issuer’s chief executive, said he was unable to come to terms with Costco “that would have made economic sense” for the company.

“It’s not easy to see a long-standing partnership end,” he told financial analysts. “But when the numbers no longer add up, it’s the only sensible outcome.”

Visa crunched the numbers and reached a different conclusion. Few details of Visa’s agreement with Costco were released when the deal was announced Monday, but it’s a safe bet that Visa made an aggressive bid to top rivals MasterCard and Discover.

Costco’s relationship with AmEx ends March 31, 2016. The Costco-branded Visa card will be issued by Citigroup and will feature its own rewards. Other Visa cards, however, also will be accepted.

Needless to say, this is how capitalism is supposed to work. Costco’s arrangement with Citi and Visa is a win-win-win-win for the companies and consumers.

Meantime, the 2003 Medicare drug program costs about $80 billion a year and is projected to cost twice that amount by 2022 as aging baby boomers place an increasing strain on health benefits.

Medicaid, the insurance program for low-income people, is allowed to negotiate discounts for members. The Congressional Budget Office estimates that if Medicare had the same bargaining power, it could save $116 billion over 10 years.

That’s serious money, and it’s your money we’re talking about. These are taxpayer dollars at stake.

But in the eyes of conservatives, a private company like Costco has more right than a government program like Medicare to reap the benefits of a free market.

It makes no sense. And the biggest losers are the American people.

About the Writer
David Lazarus, a Los Angeles Times columnist, writes on consumer issues. He can be reached at david.lazarus@latimes.com.

(c)2015 Los Angeles Times, Distributed by Tribune Content Agency, LLC

Image: Melanie Tata, Flickr

Wage Stagnation Puts The Squeeze On Ordinary Workers

LOS ANGELES — Laurie Chisum works as a manager for a small office-equipment company in Orange County. She puts in about 30 hours a week on the job and spends much of her time at home caring for her mother, who is afflicted with Alzheimer’s disease.

She’s not complaining — she’s thankful to have a steady paycheck. But no matter how hard she works, it feels as if she just can’t get ahead.

“It’s been six years since anyone at our company has had a raise,” said Chisum, 52. “It seems like I just keep falling further into a hole. The price of gas has gone down, but nothing else has.”

It’s a refrain we’ve heard throughout the year: wealth gap, income inequality, wage stagnation.

No matter how you say it, the upshot is the same. The rich are getting richer and everyone else is feeling squeezed.

The wealth gap in this country is now the widest it’s been in decades, according to a report this month from the Pew Research Center.

The median net worth of upper-income families reached $639,400 last year. That’s nearly seven times as much as for those in the middle and almost 70 times what people at the lower end of the economic spectrum are making.

That’s not just a data point. It’s sad proof of a system that grossly favors the rich over ordinary working families — even when the economy is improving.

“Far too many people simply aren’t feeling the benefits of this economic growth,” said U.S. Labor Secretary Thomas Perez. “People are working harder and smarter, but their sweat equity hasn’t translated into financial equity.”

David Neumark, director of the Center for Economics and Public Policy at the University of California, Irvine, said that “people at the top have had phenomenal wage growth,” whereas “people at the lower end of the spectrum have seen their real purchasing power decline.”

Corporate profits are at or near record levels. So’s the stock market. Chief executives are doing just fine, thank you very much. A recent report found that some of the biggest U.S. companies pay their CEOs more than they pay in federal income taxes.

For ordinary working stiffs, the numbers are more sobering. Average hourly wages rose an itsy-bitsy 0.4 percent in November, according to the Labor Department. And this was seen as good news because average wages increased a pitiful 0.1 percent in October and didn’t budge in September.

For the year, average hourly earnings through November rose 1.7 percent, according to the Bureau of Labor Statistics. Since the end of the recession in 2009, they’ve gained about 11 percent.

At the same time, though, the consumer price index — the cost of living — has increased 1.3 percent since the beginning of the year and about 11 percent since the end of the recession.

Wages, in other words, are barely keeping pace with overall inflation. That’s why many people feel as if they’re stuck in a financial rut.

“You wonder from month to month what else you’re going to have to cut back on,” said Chisum, a single mom who also is caring for a grown son with Down syndrome.

Things look even tougher when you tighten the focus on specific expenditures, such as food and rent.

Average food costs have climbed 12.5 percent since the end of the recession, according to the bureau. Average residential rents have risen 12 percent. The average cost of healthcare has jumped nearly 17 percent.

In that context, the 11 percent gain in wages since 2009 means that each of these necessities has taken a bigger bite out of family budgets and has left fewer dollars for other expenditures, such as the occasional restaurant meal or movie.

“There’s no evidence I can see that this is going to change in the near future,” said Edward Lawler, a professor at the University of Southern California’s Marshall School of Business. “These are tough times for workers.”

One key issue, he said, is that labor unions have less clout than they once enjoyed. This denies workers a unified voice at the bargaining table.

Improvements in technology have boosted productivity and allowed employers to limit hiring. And it’s become easy to ship jobs abroad, where people are willing to work for a fraction of the cost of American workers.

All these factors conspire to keep wages down while profits and the compensation of senior managers skyrocket.

Earlier this month, Microsoft shareholders approved an $84-million pay package for the company’s new chief executive, Satya Nadella, making him one of the country’s highest-paid corporate leaders. He’s run the company for less than a year.

Boeing, Ford, Chevron, Citigroup, Verizon Communications, JPMorgan Chase and General Motors each paid their CEOs more last year than they paid in income taxes to Uncle Sam, according to a report from the Center for Effective Government and the Institute for Policy Studies.

A recent study by Harvard Business School found that most Americans believe chief executives make roughly 30 times what the average U.S. worker makes. That was indeed the case in the 1960s. Nowadays, CEOs pull down more than 350 times the average worker.

Chief executives are important people, to be sure. But is their importance to a company 350 times that of their employees? I doubt most people — other than CEOs — would think so.

More effective unions would help, as would programs to give workers the skills they need to compete better in the 21st century workplace.

Chris Tilly, director of the University of California, Los Angeles’ Institute for Research on Labor and Employment, said a key step would be establishing a national minimum wage of $10 to $12 an hour, and then indexing that wage to consumer prices so that paychecks automatically rise with inflation.

“That way you wouldn’t have to wait for Congress to act every year,” he said. “This would be a basic decision that wages would keep up with the cost of living.”

Perez, the labor secretary, also called for a higher minimum wage, plus “strengthening overtime protections” and “ensuring that workers have a strong voice in the workplace.”

A rising tide lifts all boats. At least that’s how we’re told things are supposed to work.

The reality is that the tide is rising in a big way for some, and they’re comfortably sunning themselves on the decks of their yachts.

For most others, that rising tide is more like a stormy sea threatening to swamp the family lifeboat.

We’ll likely hear a lot in the coming year about how the economy is improving and businesses are thriving. Chief executives will point toward fast-rising stock prices as proof that they’re worth every million they’re paid.

And everyone else will try to make their 0.4 percent hourly pay hike go as far as they can.

David Lazarus, a Los Angeles Times columnist, writes on consumer issues. He can be reached at david.lazarus@latimes.com.

Photo: The All-Nite Images via Flickr