Analysis of current AH's rules regarding shill/internal/sketchy bidding practices

steve B · #1 10-11-2019, 10:06 PM

A local antique auction I used to go to had something similar.

They would announce just before starting that the people helping out were dealers, and were allowed to bid on items. It was mostly because without allowing them to bid they wouldn't get any qualified help. (I always figured it was because they asked friends to help since they'd be there anyway. )
Each had a specialty, and would rarely bid on any other sort of item. One was a doll dealer, and usually won. A couple of the others had shops that I'd been to and saw items for sale that they'd won a week earlier.

On the face of it it did seem a bit shady, but I never got the impression that it was anything but what it was announced as.

Fred · #2 10-11-2019, 10:48 PM

So what's the difference between AHs allowing their own employees to bid on their own lots and what Mastro (and company) did?

ValKehl · #3 10-12-2019, 12:53 AM

I read the T&Cs for all the major auction I participate in. Although I don't leave max bids very often, I NEVER leave max bids with Mile High, Heritage, and other auction houses that have similar T&Cs. But, I will leave max bids on occasion with auction houses that I consider to be very ethical AND that have T&Cs similar to REA's and LOTG's. In fact, I was traveling during the close of the recent LOTG auction, so I left a max bid on a scarce, pricey (for me) card I really wanted, even though I was pretty sure this card was consigned by LOTG's owner (I later learned that it was); and, I won this card for LESS than my max bid.

bnorth · #4 10-12-2019, 09:43 AM

Quote:

Originally Posted by Fred

So what's the difference between AHs allowing their own employees to bid on their own lots and what Mastro (and company) did?

Location, location, location.

Buythatcard · #5 10-12-2019, 09:49 AM

I always found it a little strange when I would place max bids on multiple items at Heritage only to get outbid on most of them at the exact same time. I always felt like it was automated.

Republicaninmass · #6 10-12-2019, 09:56 AM

"But (HA, or insert auction co here) is a billion dollar company, why would they need to do this"

Says the crowd

ullmandds · #7 10-12-2019, 10:04 AM

I was kind of hoping that this thread would lead to some of you investigating some of the other auction House sites and ultimately we can compile a grid or a list of all the auction houses and they’re bidding behaviors.

My intention was not to bash any individual auction house just to make everyone aware of who does what.

I will add to this when I have a moment.

Rhotchkiss · #8 10-12-2019, 10:12 AM

Quote:

Originally Posted by ullmandds

I was kind of hoping that this thread would lead to some of you investigating some of the other auction House sites and ultimately we can compile a grid or a list of all the auction houses and they�re bidding behaviors.

My intention was not to bash any individual auction house just to make everyone aware of who does what.

I will add to this when I have a moment.

Pete, I am pretty sure that REA and memory lane use the same software, which I think precludes the AH from seeing a max bid. I also think both AHs forbid employees from bidding in their auctions; however, I think employees can consign.

Categories should be (1) can employees consign, (2) can employees bid, (3) can employees see max bids, (4) are reserves disclosed, and if so, at what point in the auction is it disclosed there is a reserve and at what point do we know what the reserve amount is.

ullmandds · #9 10-12-2019, 10:04 AM

Quote:

Originally Posted by Republicaninmass

"But (HA, or insert auction co here) is a billion dollar company, why would they need to do this"

Says the crowd

Maybe to become a $2 billion auction company??

ValKehl · #10 10-12-2019, 12:49 PM

Quote:

Originally Posted by Republicaninmass

"But (HA, or insert auction co here) is a billion dollar company, why would they need to do this"

Says the crowd

Because, Ted, otherwise, IMHO, lots of the great cards that get consigned to Mile High (e.g., the low-grade 1916 Holmes-to-Homes cards that just sold for insane prices), Heritage, and other auction houses with similar T&Cs would otherwise be consigned to "higher-integrity-T&C" auction houses like REA & LOTG.

perezfan · #11 10-12-2019, 12:48 PM

Quote:

Originally Posted by Buythatcard

I always found it a little strange when I would place max bids on multiple items at Heritage only to get outbid on most of them at the exact same time. I always felt like it was automated.

This is exactly what happened to me in Hunt's yesterday. The auction had just opened - I bid on a whole slew of items - and was instantly outbid on every single one! I have never had that happen before.... It's as if each lot already had a ceiling bid in place. Normally you are the high bidder for at least a short period.

I know Hunt has stated they are privy to use hidden reserves on certain items... but for every single lot (dozens actually) to receive outbids instantaneously feels like a mathematical impossibility.

x2drich2000 · #12 10-12-2019, 02:58 PM

Quote:

Originally Posted by perezfan

This is exactly what happened to me in Hunt's yesterday. The auction had just opened - I bid on a whole slew of items - and was instantly outbid on every single one! I have never had that happen before.... It's as if each lot already had a ceiling bid in place. Normally you are the high bidder for at least a short period.

I know Hunt has stated they are privy to use hidden reserves on certain items... but for every single lot (dozens actually) to receive outbids instantaneously feels like a mathematical impossibility.

While I'm not going to say there might not be an issue with some auctions, the AH placing automatic bids early doesn't make a lot of sense since they are also then limiting the number of potential bidders putting who may put in placeholder bids. I can also say it is not uncommon for me to go through the day an auction opens and put in a bid, and sometimes a bid several increments up if the opening bid is really low, on a majority of the card lots. Often I'll put in bids on lots up to say 50% of what I believe a lot should sell for with the idea to limit the number of other bidders. As someone who is willing to buy just about anything when the price is right, I do that to keep my options open during extended bidding when i go through looking for bargains. Have 2 or 3 people like me doing that and it is easy to see how you could get outbid immediately on multiple lots.

perezfan · #13 10-12-2019, 03:11 PM

Quote:

Originally Posted by x2drich2000

While I'm not going to say there might not be an issue with some auctions, the AH placing automatic bids early doesn't make a lot of sense since they are also then limiting the number of potential bidders putting who may put in placeholder bids. I can also say it is not uncommon for me to go through the day an auction opens and put in a bid, and sometimes a bid several increments up if the opening bid is really low, on a majority of the card lots. Often I'll put in bids on lots up to say 50% of what I believe a lot should sell for with the idea to limit the number of other bidders. As someone who is willing to buy just about anything when the price is right, I do that to keep my options open during extended bidding when i go through looking for bargains. Have 2 or 3 people like me doing that and it is easy to see how you could get outbid immediately on multiple lots.

I know what you're saying, but it felt more like I was bidding against hidden reserves. You may well be correct, but this was a vast array of items that were in no way related. Much of it being obscure stuff with limited mass appeal. I've bid in hundreds of these auctions over three decades, and never encountered an opening day shutout like that one. Weird.

Shoeless Moe · #14 10-12-2019, 10:16 AM

Quote:

Originally Posted by Fred

So what's the difference between AHs allowing their own employees to bid on their own lots and what Mastro (and company) did?

It's that they are telling you up front. Like when I go into a store I say very loudly when I'm shoplifting, "I'm stealing this!!!!!" then walk out the door.

As long as you say it, you're good.

Aquarian Sports Cards · #15 10-14-2019, 06:43 PM

Quote:

Originally Posted by Fred

So what's the difference between AHs allowing their own employees to bid on their own lots and what Mastro (and company) did?

Ostensibly these auction houses don't have knowledge of the bids of others.

ullmandds · #16 10-14-2019, 06:45 PM

It is just seeming more and more...to me...like AH's are like "the dealer" in vegas.

They have distinct advantages over the "players" and they win most of the time.

buymycards · #17 10-14-2019, 08:05 PM

Well, let me see if I have this straight:

1. I am bidding against the other bidders.

2. I am bidding against the employees of the auction house, some of whom are bidding on their own items.

3. I am bidding against the auction house, who is scooping up any good deals.

4. Items that I consign are competing for a limited amount of dollars with the auction house consigments and the employee consignments.

5. Heritage only charges me a 25% buyers fee for the privilege of of buying from them.

Sounds like a good deal to me. Where do I sign up?

Peter_Spaeth · #18 10-14-2019, 08:24 PM

I have a vision (relayed to me by a friend) of Bill Mastro back in the day at one of his own auctions, with a bid paddle.

When the house wins an auction, and of course doesn't pay a premium, how is the price reported to the community?

Flintboy · #19 10-14-2019, 09:20 PM

I give credit to Heritage, they came on here and said they bid on their own auctions. I guess my definition of shill bidding is different than theirs.

benjulmag · #20 10-15-2019, 04:19 AM

Quote:

Originally Posted by Peter_Spaeth

When the house wins an auction, and of course doesn't pay a premium, how is the price reported to the community?

From an economic perspective, inasmuch as by winning the item the AH has forgone the right to collect the BP from the underbidder, I would characterize that forgone revenue as an opportunity cost "paid" by the AH to win the item, and add it to the hammer price when reporting the realized price.

Whether in fact AHs do this I don't know, but IMO if they did they would not be mispresenting the realized price.

Fuddjcal · #21 10-16-2019, 11:45 AM

Quote:

Originally Posted by buymycards

Well, let me see if I have this straight:

1. I am bidding against the other bidders.

2. I am bidding against the employees of the auction house, some of whom are bidding on their own items.

3. I am bidding against the auction house, who is scooping up any good deals.

4. Items that I consign are competing for a limited amount of dollars with the auction house consigments and the employee consignments.

5. Heritage only charges me a 25% buyers fee for the privilege of of buying from them.

Sounds like a good deal to me. Where do I sign up?

No, I'm not. When I was in hot and heavy acquire mode, I would never pay 25% vig to anyone anytime to buy from them EVER for anything PERIOD what a total JOKE.

robertsmithnocure · #22 10-16-2019, 12:40 PM

Quote:

Originally Posted by Fuddjcal

No, I'm not. When I was in hot and heavy acquire mode, I would never pay 25% vig to anyone anytime to buy from them EVER for anything PERIOD what a total JOKE.

I do not understand what difference the buyer�s premium would make to the buyer. Whether it is 10% or 25%, I would assume that a buyer takes that into consideration and if he wants to bid a total of $100 all in, he would bid $91 with the one auction house and $80 with the second to come up with that number.

If anything, the buyer�s premium should matter more to the seller since his proceeds are calculated on the hammer price. I think that when buyer�s premiums are high that the seller is receiving part of it.

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Shill Bidding	ullmandds	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	27	05-11-2016 09:08 PM
Reporting Fraudulent Listing Practices on eBay, e.g., Shill Bidding	scotgreb	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	6	05-12-2014 05:19 PM
Shill bidding? Need some help.	bundy462	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	8	08-14-2013 06:26 AM
Shill bidding	Archive	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	3	12-05-2006 04:38 PM
Shill Bidding?	Archive	Net54baseball Vintage (WWII & Older) Baseball Cards & New Member Introductions	2	05-03-2003 12:04 AM