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Shill bidding at major auctions?

Does it happen? If so what percent? Can the auction houses do anything to prevent it?

My answers yes I think it happens, maybe as much as 30% and unfortunately I don’t think the auction houses can do much to prevent it. I suspect the auction house only has it suspicions and difficult if not impossible to prove. I suspect very little effort is made to eliminate this behavior since it is so hard to prove.
I just hope that I am not under estimating my guesses. Any thoughts or solutions? It would be nice to hear from the auction houses what if anything they can do.

Comments

  • davewesendavewesen Posts: 3,311 ✭✭✭✭✭

    Is it really shill bidding if the bidder is willing to take possession at purchase price if they win? Maybe friends bid on each others items because they like them.

  • YQQYQQ Posts: 2,657 ✭✭✭✭✭
    edited May 10, 2019 7:48AM

    I have to be careful as to what I say here. However, it is the truth... maybe not with all Auction houses.
    BUT with many.
    Now, there are probably some auctioneers amongst the members here......and you may or may not agree.
    Auction houses do not "shill bid".
    they hire someone who does it for them, who sits in the audience or on the phone, or on the keyboard. That someone in the audience has strict instructions as when to bid. Usually they kick in to break a deadlock by one or two bids to get it going again., or to push up when it looks like the max might be reached.
    My German friend experienced it when bidding for expensive German gold colonial coins. He ended up proving interference with the bids by an independent agent hired by the auction house. Its a long story, but it was all admitted and settled without legalities before it became public.
    Why do you think auction houses like the Pre-bids? simply to find the best starting level and to estimate participation and level of interest for a certain item. when the live auction starts it often is a multi fold of the original estimate. Why do you think a certain house start many items at $1 in their ads, and when the auction starts it is already sky high...... read the rules.
    a personal experience on the phone a few years ago: auction phone person at 2AM my time:** another 100 and it is yours !!!!** How did he know at a bit of 3,200 ???
    there were only 2 of us bidding: the other bidder at the location and myself on the phone.
    Fact is, I still got a bargain.
    There is a lot more to IT than simply auction off an item...just read the contract when you submit items...... the very fine print!

    Today is the first day of the rest of my life
  • SmudgeSmudge Posts: 5,921 ✭✭✭✭✭

    When you get about 20% of the price of a sold item, why would you not want items to sell for higher prices. Not saying it happens or not and no one wants to "rock the boat". As long as everyone is ok with the experience, let it be. No one is forcing anyone to participate.

  • TradesWithChopsTradesWithChops Posts: 571 ✭✭✭✭

    @Smudge said:
    When you get about 20% of the price of a sold item, why would you not want items to sell for higher prices. Not saying it happens or not and no one wants to "rock the boat". As long as everyone is ok with the experience, let it be. No one is forcing anyone to participate.

    When shill bidding exists, it affects the "price of a sold item". It artificially creates a bubble that will break. AKA: the consumer is not protected, and youre buying in to something at a higher price than it is worth.

    Often, the price of something is based on how much "other things" sell for. If youre manipulating the price of those "other things", then that pushes the values higher (when in fact the true values of coins today are decreasing except for rarities).

    Minor Variety Trade dollar's with chop marks set:
    More Than It's Chopped Up To Be

  • skier07skier07 Posts: 1,771 ✭✭✭✭✭

    Whenever money is involved and as the dollar amount gets large enough there will always be cheating. It happens everywhere ie. the stock market, gambling, sports betting, insider trading, etc.

  • rickoricko Posts: 76,493 ✭✭✭✭✭

    Shill bidding has been a practice since auctions existed... both by sellers and the auction houses...Not sure how widespread it is, but it no doubt exists... I have seen it on ebay....Cheers, RickO

  • Moxie15Moxie15 Posts: 303 ✭✭✭

    I know nothing of the big houses that deal with big numbers, but a local auction that I used to sometimes attend had in their small print certain wording that the house reserved the right to bid up to one bid below any set reserve.
    Some called it bidding against the potted plant.

    Then there is always the game which I call "Pain", several people here have cried 'Shilling' and carried on righteous indignation on this forum when they were an obvious victim of the Pain Game.

  • djmdjm Posts: 1,060 ✭✭✭

    I don't think there is much shill bidding anymore. The auctioneer would have to pay the shill to attend the auction and bid. The auctioneers have more efficient ways to raise the bid. They can take bids from the back of the room, take bids from pre-bids, take bids from the telephone, or sell to the book after the item closes.

    If you are asking if auction companies manipulate bids then the answer is yes.

  • amwldcoinamwldcoin Posts: 8,026 ✭✭✭✭✭

    Did I shill bid when I had a friend buy back for me 2 very inaccurately presented coins I consigned to Heritage? Cost me a few grand but in the end I came out ahead.

  • StaircoinsStaircoins Posts: 2,509 ✭✭✭
    edited May 10, 2019 8:07PM

    Let's just say there's more than one type of "plant" in the back of the room.

  • amwldcoinamwldcoin Posts: 8,026 ✭✭✭✭✭

    Ya think? Will you let someone misrepresent your coins? Plain and simple I bought the coins back and sold them for enough more later to cover my loss! They hammered for less than 1/2 of what similar coins sold for less than a year before in their auction. Not only that they did not show any of the results of their previous auctions in the listing! They did allow 1 to show from over 10 years prior!

    @washingtonrainbows said:

    @amwldcoin said:
    Did I shill bid when I had a friend buy back for me 2 very inaccurately presented coins I consigned to Heritage? Cost me a few grand but in the end I came out ahead.

    As described yes.

  • jmlanzafjmlanzaf Posts: 13,476 ✭✭✭✭✭

    @Moxie15 said:
    I know nothing of the big houses that deal with big numbers, but a local auction that I used to sometimes attend had in their small print certain wording that the house reserved the right to bid up to one bid below any set reserve.
    Some called it bidding against the potted plant.

    Then there is always the game which I call "Pain", several people here have cried 'Shilling' and carried on righteous indignation on this forum when they were an obvious victim of the Pain Game.

    It is not a "shill" to bid against "the potted plant" as you describe it. They are simply asking for an opening bid equal to the reserve. That is common practice as the whole point of a reserve is that the coin cannot sell for below the reserve.

  • jmlanzafjmlanzaf Posts: 13,476 ✭✭✭✭✭

    @washingtonrainbows said:

    @amwldcoin said:
    Did I shill bid when I had a friend buy back for me 2 very inaccurately presented coins I consigned to Heritage? Cost me a few grand but in the end I came out ahead.

    As described yes.

    Yes, that is technically "shilling" but I really don't have a problem with that. As long as the shill is going to buy it and pay all subsequent fees, so be it.

  • jmlanzafjmlanzaf Posts: 13,476 ✭✭✭✭✭

    @amwldcoin said:
    Ya think? Will you let someone misrepresent your coins? Plain and simple I bought the coins back and sold them for enough more later to cover my loss! They hammered for less than 1/2 of what similar coins sold for less than a year before in their auction. Not only that they did not show any of the results of their previous auctions in the listing! They did allow 1 to show from over 10 years prior!

    @washingtonrainbows said:

    @amwldcoin said:
    Did I shill bid when I had a friend buy back for me 2 very inaccurately presented coins I consigned to Heritage? Cost me a few grand but in the end I came out ahead.

    As described yes.

    Whether you had a "good reason" or not, that is shill bidding.

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