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Ticket cancellation has always been a contentious issue, says Graham Berg.

Many venues adopt a no cancellation/no refund policy. Others, in an attempt to enhance their levels of customer care, are prepared to offer tickets for re-sale and some (much to the dismay of their accounts departments!) are happy to provide some form of credit note for redemption, say, within a 12 month time limit. The problem is that credit notes and ticket re-sales are both unpopular ? as, of course is a cancellation/refund policy. There is a way, however, of keeping customers happy at the same time as operating a financially sustainable refund policy: using ticket cancellation insurance.

This can operate in two ways. Customers can be given a choice as to whether they want to protect their tickets if venues offer optional cancellation insurance as an added-value service to bookers. If they do this, then a ?no refunds? policy is perfectly justifiable, as customers have had a choice as to whether to protect themselves against unforeseen circumstances. Alternatively (and more subtly) customers can be protected from the costs of cancellation if the organisation incorporates cancellation insurance within its booking fees, thus justifying what has always been a somewhat controversial charge!

The insurance is of real benefit to customers and arts organisations alike. It provides invaluable reassurance for customers, who can book tickets well in advance knowing that they will be protected should an unforeseen insured event prevent them or their group attending. The fear factor of booking say a pantomime 6 or 7 months ahead is effectively taken away. If a claim has to be made, rather than having to notify a venue of a cancellation using the normal booking line, patrons have the facility to use a designated cancellation help-line operated by an insurer who can process their claim with the minimum of fuss. The effect of booking fees is also cushioned to a certain extent in that booking fees are also refunded by the insurers together with the face value of the ticket.

The venues also benefit in a number of ways:
? the product greatly enhances the venue?s customer service profile.
? the venue will benefit from substantial additional commission revenue, by acting as an agent for the Insurer
? further revenue is available to the venue in the form of the value of any re-sold tickets.
? any additional administrative work relating to cancelled tickets is effectively taken away
? venues offering an exchange or refund scheme avoid the risk of severe losses in the event of local ?flu epidemics

Potential additional revenues can be substantial, and it is probably useful to see an example: A theatre with a seating capacity of 1,200 and 390 performances annually, which sells 85% of its tickets at an average cost of £30, may find that 67% of customers take up the insurance, meaning 267,000 £1 insurance policies would be sold (including Insurance Premium Tax).

Projected revenues:
Insurance Revenue £93,000
Value of re-sold tickets £20,000
Total revenue £113,000

The whole concept really is a win-win proposition and accordingly it is not surprising that it is rapidly becoming a standard customer requirement.

Graham Berg is Managing Director of TicketPlan, a cancellation insurance plan conceived together with and backed by Cornhill Insurance Plc. t: 01702 482284 e: ticketplan@efmgroup.co.uk w: http://www.ticketplangroup.com