Current and former members of the company have reported not receiving event tickets on the timeline promised, scheduling snafus, trip cancelations, and unwanted charges to their credit cards. The company attributes the “kinks” to its rapid growth, as it now counts 40,000 members since its inception in 2014.
Magnises, a company that markets itself as the ultimate social group for “elite” young professionals, is facing the ire of members who claim the service hasn’t delivered on what was advertised, Business Insider reported.
Business Insider spoke with seven current and former Magnises members, all in New York City, who recounted similar stories of not receiving tickets on the timeline promised, of having to rearrange plans multiple times because of the startup’s scheduling snafus, and of trips being canceled outright—sometimes the day before they were scheduled to take place.
Several of the members said they received unwanted charges to their credit cards from Magnises, which in some cases took more than a month to refund their money, Business Insider reported.
Magnises members pay a $250 annual fee that allows them to attend happy hours and other events. The company works with concierges who can arrange restaurant reservations, book travel, or make suggestions for things to do in your city. Members make all these arrangements through an app called Magnises NOW, Business Insider reported.
Since its inception in 2014, the New York-based startup has expanded to Washington, DC, and San Francisco. It now has nearly 40,000 members with roughly 60% still in New York—a large increase from just 12,000 members in February 2016, Business Insider reported.
Founder and CEO Billy McFarland said the startup has raised $3.1 million in venture capital since its founding, and it has been cash-flow positive for the past year. It has 25 employees, Business Insider reported.
According to accounts from current and former members, Magnises’ customer-service reps generally blame the company’s shortcomings on its being a fast-moving startup that’s constantly responding to customers’ requests for new features. “We’ve hit some roadblocks along the way, and that’s what happens when you grow really quickly, and that’s on me,” McFarland said.
Magnises was originally known for a black card that would be linked with a member’s bank or credit card for payment purposes. By flashing your Magnises card, you could get discounts at restaurants, bars, or clubs and reserve experiences like private concerts and luxurious getaways, Business Insider reported.
“We’re building a complete platform that connects millennials with new businesses, online and offline. One thing that everyone carries with them at all times is their debit or credit card,” McFarland told Business Insider in July 2015. “So we tied it to that.” Since then, the company nixed the black cards in favor of the digital app.
Magnises bases most of its operations out of the Jue Lan Club in Chelsea. Last year, Magnises started to shift its focus from a club for networking and happy hours to one that could get its members tickets to the coolest events in town. It started offering hard-to-come-by tickets to concerts by artists like Rick Ross, Ja Rule, and, later, bigger names like Beyoncé, Adele, and Kanye West. Magnises would purchase these tickets from a third-party vendor and resell them to members, Business Insider reported.
For many of those who decided to join Magnises in the spring and summer of 2016, easy access to these in-demand tickets was a major draw. “We’ve sent 5,000 of our members to concerts or shows like ‘Hamilton’ since May,” McFarland recently told Business Insider.
But it seemed as more people signed up for Magnises, it became more difficult for the startup to fulfill its ticket requests. One former member, who spoke on condition of anonymity, said that they bought several tickets for several events—including Beyoncé’s concert at Citi Field, one of Adele’s shows at Madison Square Garden, and a performance of “Hamilton”—soon after joining Magnises in February 2016. This member claims to have had logistical issues with nearly every event for which they had purchased tickets, Business Insider reported.
Each time, just before the show (often the day before the event or even the day of) a representative for Magnises would send an email explaining that the startup would no longer be able to provide the purchased ticket and offer to help reschedule the seat for another date, Business Insider reported.
“They send the same email for every problem, but it’s like fill-in-the-blanks for what the problem is,” the source said.
Though the members Business Insider spoke with did say their issues were ultimately resolved, it was often only after days of rescheduling and back-and-forth with the company. Three of the former members we spoke with said they were asked to delete negative tweets by customer service reps who explained the mix-ups by saying that Magnises was still a startup working out the kinks of its business.
Several members have said that the point of paying $250 for an annual membership is to bypass the challenges that consumers sometimes face in gaining access to popular events. Some said their tickets have been rescheduled two or three times as a result of various problems Magnises encountered in planning, Business Insider reported.
“Our system was amazing when we had 18,000 members or 20,000 members, but once we got up to 40,000, we ran into some roadblocks scaling with our vendor,” McFarland told Business Insider. “We need to figure out a better relationship so that we can get to what we promised. We’re having growing pains and it’s tough, and we have to get through it.”
Two years ago Magnises launched a feature called Magnises Air, which was primarily focused on shuttling members from New York City to the Hamptons on SR-22 planes. McFarland said that 175 of these flights between Manhattan and the East End have taken place. But last July, Magnises started advertising a new set of private flights, most of which would take members to six destinations: New Orleans, Cuba, the Outer Banks, Miami, Lake Placid, and a trip for NBA All-Star weekend, Business Insider reported.
Robert Egan, a former Magnises member who works in private wealth management, decided it was a good enough deal to buy two tickets for two different trips: to Cuba in October and to Miami for Art Basel in December. Both trips were canceled and rescheduled. Around the same time, Magnises charged Egan $250 to renew his membership for the following year, even though it was December, and his membership would not have reached the one-year mark until February, Business Insider reported.
“That’s when I lost it. They said the refunding would take 10 days. I work in finance, and I know no transaction that small would take that long. I reported it to AmEx, and they immediately credited my account,” Egan said.
Magnises did end up refunding all of Egan’s money, though the membership-renewal charge took nearly a month to get back. McFarland explained that the trips are being arranged by several Magnises members who are pilots and operate their own planes, Business Insider reported.”
“The Cuba trip is going to happen,” McFarland said. “It’s in the members’ hands now. They just have a list of dates they have to pick.”
Another member, Elise Omaits, ended up filing a complaint with the Better Business Bureau after Magnises charged her five months early to renew her membership. She didn’t receive a refund until a month after contesting the charge with Magnises. Three other former members Business Insider spoke with reported similar experiences.
In a follow-up call, Magnises told her that about 100 people were affected by early charges because of a problem with Stripe, the payments system that the startup uses to process its memberships. Magnises’ customer-service team requested that Omaits take down her Better Business Bureau complaint and added that the startup is growing is so quickly that it didn’t have the time to offer proper apologies to each of its members, Business Insider reported.
Despite the hiccups it has faced, Magnises continues to expand the perks it offers members. In December it launched SportsPass, which offers members lower-level tickets for events at the Barclays Center, including Brooklyn Nets and New York Islanders games. It recently announced a partnership with Glam & Go, which aims to give members discounted pricing on blowouts as well as other wellness perks, Business Insider reported.
“Our general theme now is how we can impact the member on a daily basis,” McFarland said.
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