Overbooking is regulated (though rarely prohibited) in many countries and industries, and companies that do practice it are often required or forced by market competition to offer large amounts of compensation to customers as an incentive for them to not take up their purchase.

This can be done by making reservations non-refundable, a common practice among low-cost carriers and railways, or requiring customers wishing to cancel their right to a service to pay a termination fee.

[1] Airlines may ask for volunteers to give away their seats, or refuse boarding to certain passengers, in exchange for compensation that may include cash, an additional free ticket and/or an upgrade on a later flight.

[7] In 2007, Air Deccan, the Indian low-cost airline was found by Directorate General of Civil Aviation to overbook even when they weren't permitted to do so.

[citation needed] They were accused of cheating passengers by tagging the confirmed tickets as no show for compensating the additional seats.

[11] They were able to do this and remain profitable as the majority of their customers are tourists, instead of business fliers, and their tickets are non-refundable, thereby lowering the chances of passengers missing their flights.

[16] One of the men selected to be removed refused, telling the United crew member that he was a doctor who needed to see patients the following morning, prompting the airline to call security.

[15] As seen in videos filmed by other passengers, the man was forcefully pulled from his seat, knocked unconscious and had his bloodied, limp body dragged down the aisle to the exit.

[15][16] On April 11, United said that Flight 3411 was not overbooked, but rather sold out – contrary to their earlier statement,[17] and a definition which differs from IATA's.

Rail networks accordingly often do not have a centralised booking system; as passengers can stand, tickets can be sold from automated machines and clerks with no knowledge of how many people intend to board a train.

In addition, rail networks have to deal with the unpredictable nature of season ticket holders, who have purchased a right to make unlimited use of a route; these passengers may often be allowed to join any train but not guaranteed a seat.

[21][22] In some situations over-booking is actively encouraged by rail companies in order to inflate sales and therefore the importance/prominence of a particular line in government statistics.

[citation needed] During times of high demand, hotels also practice overbooking and apply similar procedures to that of the airlines, in which a service equal to or greater than that which was booked must be provided to the customer.

[citation needed] Some hotels have specific company policies which determine which customers will be "walked" in order of priority.

[23] Building for typical rather than peak demand is considerably less expensive, but a telephone company can experience problems when large numbers of callers attempt to use the system at the same time.

Underlying the oversubscription model is the fact that statistically few users will attempt to utilize their allocated bandwidth simultaneously.

[24][25][26] In a cable network utilizing DOCSIS 1.1, for example, the full 38 Mbit/s download bandwidth[27] is typically shared by some 500 subscribers,[28] each of which may be allocated 7 Mbit/s.

It is not economically practical, environmentally reasonable, or technically feasible to provide dedicated access for every service to every customer.

That means no dropped calls on your cell phone, no busy signals when dialing, and no failed downloads on the Internet (for example).

They may have onerous restrictions and one-sided contracts that let them cancel the hosting of anybody that puts a strain on their system or fully uses their claimed allotments.

If, however, a customer wishes to run a high-traffic, professional or business website, an oversold hosting account can be detrimental.