23 Jan 2020

Did you know? If a power failure hits your event, you may have to give people their money back

Crowd at a festival with cellphone lights up

What happens if the electricity abruptly cuts out during your event and you’re unable to continue? Aside from the crushing disappointment of having all your hard work go to waste, you may find yourself liable for refunding the cost of all those tickets, too.

We say “may” because consumer rights are hazy when it comes to refunds for events that are already underway. 

In most cases, if you simply cancel the event in advance, you will be expected to refund people for the face value of the ticket. Even if you haven’t explicitly stated this in your own refund policy, all the major ticketing companies in the US state that they will refund tickets for any events that are canceled, no matter what the reason (although not if they are postponed). 

This applies even if the power outage was out of your control. For example, in July 2019, New York City experienced an extensive blackout triggered by a malfunctioning cable and the failure of the connected relay-protection system. Unfortunately for fans, this coincided with a huge Jennifer Lopez concert in Madison Square Gardens, a Dave Chapelle stand-up comedy show and a number of other performances.

The Ticket marketplace Stubhub, which sold tickets for 27 events affected by the outage, had to refund over $500k to customers of the 25 that were simply canceled. The J-Lo and Dave Chapelle shows, however, were re-booked for another date, so the ticket holders were told they would be able to use their tickets at the new date or resell them without incurring a fee.

In some countries, consumer rights are legally enshrined. In the UK, for example, event-goers are protected by the STAR code of practice, while those who pay via credit card enjoy extra protections under Section 75 of the Consumer Credit Act. As such, if your event fails to go ahead as planned, it won’t only be angry consumers hounding you for their money back. You’ll also have to contend with credit card companies and any reputable ticket seller you’d wish to do business with in the future.

The tricky bit is determining at what point an event is “canceled”. If your power cut hits two-thirds of the way through the event, say, you could argue that only a third of it was actually canceled. Even so, you’re likely to face calls to refund a proportional amount of the ticket price to customers.

The crux of the matter is this, though: even if you can argue, from a legal standpoint, that your particular refund policy and the circumstances of the outage mean that you can’t be forced to pay everyone back, what will this do to your reputation?

Will any of these attendees come to one of your events again? Almost certainly not. Will many of them rant about their experience on social media, putting off their extended networks, too? Almost certainly. Could you attract negative media coverage that makes it harder for you to put on events in the future? Quite possibly.

As such, many event organizers agree, with good reason, to refund attendees for a negative experience caused by an unplanned outage. It’s simply not worth becoming notorious for ripping people off, not to mention the weeks, months or years of fielding complaints and possibly even lawsuits. No one wants to go down in history as the next Fyre Festival, after all. 

But an incident like this can wipe out your profits and undo months of hard work, while pushing up the costs on the day as you scramble to fix the problem. Take this carnival in Rochester, which suffered a power outage in June that shut down most of the rides. Even though this was a charity fundraiser, and even despite managing to shift over to a backup generator to get the festivities back up and running by the end of the night, the organizers still had to offer refunds to those who wanted them.

So what can you do to prevent things from getting that far? 

First of all, make sure that your utilities set up is fit for purpose. Are all your units sized correctly? Are you confident you can deal with power demand on the day? Have you tested the system?

Secondly, make sure you have a solid contingency plan in place that will allow you to switch over to a secondary power source as seamlessly as possible, as soon as you encounter problems. 

Typically, that means backup generators or even a complete temporary substation that can cover your event’s complete electricity needs even if you find yourself disconnected from the grid.

It also means conducting a complete audit of the site to check for any potential weak spots. Sometimes something as simple as a disconnected wire or a broken extension cord can create disastrous knock-on effects. Don’t ignore any details, however small. Figure out exactly what could go wrong and have a plan to address it in order to get back online, fast.

And third, get the right people around you to support you on the day. A team that’s stretched too thin leaves no leeway for unexpected problems and challenges. Complex and specialist equipment means you need people with the right expertise to manage it. Ideally, work with a temporary utilities provider who can remotely monitor your equipment, jumping in to handle any problems the second they emerge. This will take the weight off your shoulders, should anything happen.

And finally, whatever happens on the day, figure out in advance how you will communicate with attendees to keep them in the loop - and to keep them happy. Obviously, no one wants to stand around in the rain for an hour while technicians fix some broken cabling, but you’ll find that people are a lot more amenable if you’re honest with them when things go wrong, are respectful and apologetic, and do everything you can to fix things quickly. 

The better a sense of rapport you build with your audience, and the more professional and conscientious your behavior is when you run into a hurdle, the more likely people are to have your back - and the less likely they are to demand a refund after the event.

Outages are bad enough without losing your ticket revenues as well. When failure is not an option, contact Aggreko.

Aggreko Events Services