We support new transparency rules by Proxibid, posting notices on auctions that allow consignors and auctioneers to bid on lots and/or permit auctioneers to see maximum bids. These notices helped explain a few past purchases. We also have received emails from bidders asking us to remove those companies from our Honor Rolls. We have decided not to do that because Proxibid transparency notices will succeed over time.
Just as we advocated for 15% or lower online buyers’ fees, we will continue promoting competition in the auctioneer tradition. This post explains our position on consignor bidding and maximum bid viewing.
Overall, it is better for the portal to allow consignor bidding than high reserves because presumably those buyback bids indicate a sale, meaning the auctioneer has to pay Proxibid fees. We applaud Proxibid for setting rules for timed auctions, so that high reserves cost the auction company fees; but the problem never has been timed auctions. The problem has to do with so-called live auctions that in reality are only Internet-based with high reserves week after week in the hope that some newbie bidder will pay over retail. We hope that Proxibid’s control officer will investigate that issue with select houses and put them on notice, the same way the company puts bidders on notice for too many retractions.
That said, allowing consignors and auctioneers to bid up lots is very close to shill bidding, illegal in some states. It also occurs to us that bid retractions also can be related to consignor shill bids, a common occurrence on eBay and other portals.
We caution bidders reading Proxiblog to exercise care with auction houses seeing maximum bids. Some auctions that see those bids do not raise them to maximum on each lot; they sell at Grey Sheet (or wholesale). Some auctions just want to know the maximums so that they also can handle floor bidding. However, a few “bad”-lot auctioneers spoil it for the rest. They routinely jump to the maximum. In as much as Proxibid is supposed to mirror the onsite competition and excitement of an auction, this detracts from the experience. Imagine if auctioneers in a live sale had the superhuman capability to view maximum bids glowing on the foreheads of buyers in the room?
In sum, here is what we advise:
- Bidders: Bid cautiously in auctions that allow sellers to bid on lots. Auctioneers: Sell coins to consignors at your normal buyers’ fee percentage and deduct an additional fee on the hammer price in paying funds to sellers who win back their own coins. That should stop shill bidding and also maintain portal fees.
- Bidders: Bid conservatively and keep records of your maximum bids to see how many of those you end up paying when you win lots. If you’re paying maximum bids on all lots, consider patronizing other houses. There are plenty of companies whose auctioneers believe in competition. Auctioneers: Keep track of your sales since the new transparency rules have gone up and see if your auction profits are lower. We think you might see a difference in the bottom line in the months ahead as more bidders become aware of questionable practices.
- Bidders: Think twice before patronizing auctions that allow both consignor bidding and maximum-bids viewing. Houses with more than 15% buyer’s fee–in addition to high opening bids–that also allow seller-bidding and see maximum lots may be doing themselves a disservice. Auctioneers: Nothing is more important in attracting return bidders as the integrity of the house. Do not short-sell your reputation.
Proxiblog will still keep companies on our Honor Rolls that engage in both questionable practices. We’ll monitor the situation in the months ahead and, of course, listen to our bidders’ and auctioneer views.
Proxiblog is an independent entity with no connection to the auction portal Proxibid. Our intent is to uphold basic numismatic standards as established by the American Numismatic Association and the National Auctioneer Association and to ensure a pleasurable bidding experience not only on Proxibid but also on similar portals such as iCollector and AuctionZip.