Simple way to solve this is to make SH an escrow service that requires the tickets up front.
Of course that would increase costs and their responsibility, so it will never happen.
Of course that would increase costs and their responsibility, so it will never happen.
Paper tickets have some benefits, but there should be a way to void a paper ticket and convert it to a digital ticket that can be transferred electronically. Escrow costs would be a lot lower of SH is only escrowing digital ownership that can be transferred back to the seller if the tickets haven't sold.
For instance, in my market they partner with the Minnesota Twins. Twins tickets purchased through StubHub are "digitally delivered" just as you suggest: http://minnesota.twins.mlb.com/ticketing/stubhub.jsp?c_id=mi...
On the other hand, the Minnesota Timberwolves have partnered with StubHub's competitor Flash Seats.