Manipulating Maximum Bids

We reported a dubious practice in apparent violation of Proxibid’s Unified User Agreement involving auction houses setting a reasonable opening bid (usually at or below wholesale) and then shortly before the auction raising the maximum bid to “Reserve Not Met.”

We wrote about this before as a Pet Peeve. Now we’re so peeved we’re calling on Proxibid to stop the practice and charge auction houses that do this a service fee.

It happened again this week. We bid on two dozen lots at or below grey sheet and saw them changed to “Reserve Not Met” a day before the auction. This is the auctioneer’s version of “bid retraction,” and the fact that it happens within hours of an auction is, frankly, troubling.

Proxibid generally does not allow bid retractions, and certainly not hours before a session is called. But that’s what’s happening here–in reverse. Why isn’t this practice in violation of 5.9 of the Unified User Agreement: “Items may be offered with a ‘minimum bid,’ in which case, the Seller agrees to sell the item to the highest bidder who bids at or above the minimum bid price”?

One house in particular posts 300-500 lots each month with the vast majority of those coins selling near retail when buyer’s fee and shipping are added. Many of those lots do not sell at all–a credit to Proxibidders’ numismatic knowledge. For instance, in last week’s auction, 300+ coin lots were marked as “passed” because high reserves were not met.

Even more troubling is the fact that the house in question allows bids to be raised by the auctioneer or employees (ghost bidding) and views all maximum bids. (Of course it does.)

In fairness, it is perfectly legitimate to place high reserves on lots; we’re talking about something altogether different–the few dozen lots that had wholesale reserves (or below) for more than a week but were changed to “reserve not met” and/or passed during the auction.

Should this company be charged a fee for passed lots according to 4.3c of the Unified User Agreement? Passed Lot Fee. If Seller conducts bidding for any lot within an Auction Event without allowing Buyers the opportunity to bid using the Proxibid Services (a “Passed Lot”), Proxibid may in its sole discretion charge Seller a fee per Passed Lot.

Some auction houses with practices like this should open an eBay store. They are not running an auction; they are running an online coin shop on Proxibid. We will never, ever bid with this house again, even if it changes its practices. And we advise all Proxibidders not only to do the same but also to complain to Proxibid’s quality control officials whenever it sees practices that violate the portal’s own service terms.

Voice your complaint or suggestion by contacting the company at this link.

It’s one thing for quality control to hold bidders to service terms and quite another to hold auctioneers. We realize that. We also realize that the sheer number of lots that actually do sell in an auction like this bring revenue to the Omaha-based company. But that’s not the bottom line. Reputation is, especially when the company’s theme (in large part, entirely deserved) is TRUST.

Apparent violations such as this give the entire portal a bad name, and increasingly, in fact, send more of us (including Proxiblog) back to eBay whose quality control is becoming ever stricter and creating an even playing field for bidder and seller alike.

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.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s