Hidden Fees, Hidden Risks — Balancing Transparency and Revenue

Ever wondered why some customers complain about ticket fees while others seem fine? It’s not just about the numbers—it’s about how those numbers are presented. A recent academic paper, "The Effects of Partitioned Pricing on Sport Event Ticket Purchasers," explores the concept of Partitioned Pricing (PP), where the total price is broken into a base cost and additional fees. This strategy, commonly used by platforms like Ticketmaster and StubHub, leverages psychological principles to make the initial price seem more appealing. While PP can boost sales by drawing attention to the lower base price, it often leads to frustration when buyers are surprised by higher-than-expected final totals at checkout.

🔍 What Is Partitioned Pricing (PP)?

Partitioned pricing (PP) means splitting the total ticket cost into parts, like a base price and added fees. For example:

• Advertised price: $50

• Service fee: $10

• Processing fee: $5

• Total: $65

The alternative is All-Inclusive Pricing (AIP), where the price upfront is shown as $65. Seems simple, right? But the way these prices are presented can significantly influence how fans feel about their purchase.

⚖️ Why Does Partitioned Pricing Work?

Anchoring Effect

The advertised base price ($50) acts as an anchor—a number your brain fixates on. When additional fees appear, customers may underestimate the total cost because they’re stuck thinking about that lower anchor.

Salience and Attention

People focus on what’s most noticeable, like the base price. A small increase in fees can be less noticeable than raising the ticket’s base price, making it feel like a better deal.

🤔 Why Do Fans Get Upset About Fees?

Perceived Unfairness

If fans think fees are unreasonable or arbitrary, they’ll feel ripped off. But if fees are clearly justified (e.g., a “facility improvement charge”), they’re more likely to accept them.

Transparency Builds Trust

Hidden fees erode trust. Showing the full breakdown or being upfront with AIP can prevent accusations of sneaky practices.

🛠️ How to Apply Behavioral Science to Your Pricing

• Be Transparent: Show customers all fees upfront or make fees easy to spot. Avoid hiding them in fine print.

• Use Anchors Wisely: If you choose PP, keep the base price low but avoid shocking customers at checkout with unexpected high fees.

• Justify Your Fees: Explain what the fees cover, like venue maintenance or digital ticketing costs. Fans are more forgiving when they see the value.

• Tailor Your Approach: Die-hard fans may tolerate fees better than casual attendees. Know your audience and adjust accordingly.

💡 Examples of Behavioral Science in Action

• Airline Ads: Airlines often show low ticket prices with taxes and fees in fine print. This strategy draws attention to the "deal" while downplaying additional costs.

• Concert Tickets: Some events label fees as “venue improvement charges” to highlight their necessity and avoid backlash.

🤝 The Bigger Picture: Building Long-Term Trust

Pricing isn’t just about maximizing revenue—it’s about creating trust. Transparency and fairness can lead to stronger customer relationships, repeat sales, and positive word-of-mouth.

Credit: "The Effects of Partitioned Pricing on Sport Event Ticket Purchasers" by Armin Alberto Marquez