No Reserve Auctions That Aren’t

noreserve

This so-called no reserve auction has three strikes against it: It’s a timed auction that allows the seller to see maximum bids and raise those bids. The third strike is against Proxibid for allowing this, undermining its brand of trust.



Star Coin and Currency runs genuine “no-reserve” auctions. Jim Haver, owner of Star Coin, states: “We do not view or have access to bidder maximum pre-bids. We also do not allow or bid on lots to increase amounts. All our auctions are $1 start, absolute, no reserve auctions. All items sell to the highest bidder.”

That’s the excitement of an auction, and Proxibid’s technology is programmed to bring that to you in your home.

But auctions like the one in question today not only undermine the purpose of Proxibid’s technology; they undermine tenets of a no-reserve auction.

First of all, a no-reserve auction is just that: all lots start out at $0 or $1 (no high opening bids). Consignors must rely on the auction house to generate an audience where bidders vie for lots on an even playing field.

Second, why does a seller have to see maximum bids in a timed auction, especially if that is labeled “no reserve”?

Third, shill-bidding is one of the worst practices allowed by Proxibid. The company’s service terms prohibit shill bidding; but it relies on its so-called “transparency” policy to sidestep the prohibition. In other words, as long as the bidder is informed, the practice is legal. This would be fine if the company’s brand wasn’t “trust.” To allow it in a timed auction is downright questionable and only hurts Proxibid and other sellers in the end.

As we have reported numerous times this year, Proxibid cannot claim to have a brand of trust and allow these practices. And again as we said it eventually hurts everyone, especially houses like Star Coin and others in the left sidebar, because disgruntled bidders migrate elsewhere, especially to eBay, which acts swiftly when informed its polices have been violated.

Proxibid is content to have a hand’s-off policy on issues like this. Too bad for everyone on the portal.

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.

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Who can explain timed auctions with bid viewing?

timed_seebids

What benefit does maximum bid viewing have for the auction house in a timed event on Proxibid? Perhaps the option should be banned because unintentionally it leaves the impression that someone is engaged in shill bidding without the proper transparency notice.


Perhaps we don’t understand the dynamics of seeing maximum bids in an auction that is timed technologically. True, the auctioneer can get a sense of how much bidders are willing to spend on a lot; but that transparency does no one any good if the session is run fair and square on the portal. It could be that the auction house can withdraw a lot that doesn’t seem to be doing well as time runs out; but we seldom, if ever, see that happen.

timed_maximumsWe hate to think that this option allows offsite shill bidding.

Proxibid has a brand of trust. We just don’t trust this option and think it should be banned … unless, of course, we are mistaken in our suspicion.

What do you think, if you are a bidder? If an auctioneer, what are we missing with this practice that can ease our concern?

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.

Auctions that Aren’t

allthemarbles
Click the above picture to expand

We grow weary with seeing so-called auctions like this on Proxibid. Coins open at or near retail. Buyer’s fee is high. Auctioneer sees maximum bids and can shill bid at will. These aren’t auctions. They’re online coin stores.

This auction company routinely opens at or near retail, charges a higher buyer’s fee, sees maximum bids and can shill bid to raise the price higher. Why are these so-called auctions on Proxibid?

We recommend against bidding with any company that sees maximum bids and allows auctioneering or consignor bidding. There are plenty of real auctions on Proxbid, in which there are no reserves, low opening bids, low buyer’s fee and good shipping. We don’t list any auction that sees maximum bids or allows shill bidding in our top rankings in the right sidebar.

If you want to patronize auctions like the one above, we recommend against Proxibid and for Heritage, Teletrade and Great Collections. They offer superior service, especially shipping. The same coin below sold recently at Heritage very near the above company’s opening bid.

heritagesale

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.

Online Auction Stoppers

Sometimes terms of service speak for themselves. Sometimes they need a comment to put them into perspective. Below are terms last week that stopped Proxiblog from bidding in an auction.

Additional Forms

AUCTION COMPANY: Your credit card will be charged for your purchases immediately following the auction. At that time, the Terms and Conditions Form that was agreed to when registering will be emailed to you. Buyer must print, sign and email, mail or fax form to our office before item(s) will be shipped.

Comment: Nothing like asking the online audience to register via Proxibid terms of service, pay for items, and then not send them until additional data is collected via email. We read this, and didn’t register for the auction. Proxibid sales team: Please work with this client!


Photography Shortcuts

Comment: No reverse photo on coins. This from a Proxibid house that sells coins regularly. (Click picture to expand.)


Failing to Update Service Terms

AUCTION COMPANY: Payment Instructions: We do take credit card numbers from Proxibid over the phone. For more information please call

Comment: We were about to bid in this auction when we read this service term. Turns out the company forgot to update its clauses. Proxibid auctioneers need to review their service terms on a regular basis and make changes as needed, or you’ll lose bidders with outdated info like this.


Contacting Bidders for Credit Card Information

AUCTION COMPANY: Auction house will contact buyer for payment information.

Comment: We know the auction house is footing the bill for the long distance call, but contacting buyers for credit card information over the phone is a surefire way to lose bidders. Worse, any thief can pretend to be you and steal identity. We never ever bid with companies with this service term. Proxibid sales team: Please work harder to get these houses to invest in APN clearance!


Asking Bidders to Foot Long-Distance Bills

AUCTION COMPANY: If you wish to pay by Credit Card you must call in the info. after the end of auction to our shop address. We do not use the APN billing system to charge items to Credit Card.


Shipping Phobias

AUCTION COMPANY: “20 % Buyer’s premium is added to all INTERNET purchases. … WE DO NOT HANDLE SHIPPING AND HANDLING PLEASE CONTACT OUR LOCAL UPS TO HANDLE ALL SHIPPING AND HANDLING. … WE DO NOT HANDLE SHIPPING AND HANDLING!!!!!!!! … SHIPPING AND HANDLING IS THE RESPONSIBILITY OF THE BUYER!!!!! . ((((WE HAVE PROVIDED THE INFORMATION FOR UPS SHIPPING. UPS WILL PICK UP YOUR ITEMS PACK THEM AND SHIP THEM TO YOU. THEIR PHONE NUMBER IS XXX-XXX-XXXX. STOREXXXX@THEUPSSTORE.COM ASK FOR XXXXX OR XXXXX))) THEY MIGHT BE ABLE TO GIVE YOU A QUOTE ON SHIPPING AN ITEM YOU ARE INTERESTED IN. YOU THEN CAN BE CONFIDENT WHEN YOU BUY THE ITEM THAT THE SHIPPPING IS RIGHT. !!!!!!! NOTE WHEN USING A SHIPPER IT IS YOUR RESPONSIBLITY TO MAKE SURE THE SHIPPER KNOWS WHAT HE NEEDS TO PICK UP.”

Comment: Worst example of shipping phobia on Proxibid.


Maximum-Bid Viewing and Auctioneer/Consignor Bidding
PLEASE READ: At the request of the auction company, this auction permits bids to be placed by the auctioneer, an employee of the auctioneer, or the seller or an agent on the seller’s behalf, even if such bids are placed solely for the purpose of increasing the bid. While Proxibid’s Unified User Agreement prohibits this behavior, in accordance with UCC 2-328, this auction is permitted to engage in this activity by providing this clear disclosure to you, the bidder.

PLEASE READ: This auction company has requested and been granted access to see all bids placed including any maximum pre-bids. This auction is permitted to engage in this activity by providing this clear disclosure to you, the bidder.

Comment: Some auctioneers who have these clauses are honest. Some, less so. We know a few where shill bidders are used to place a sale “on site,” raising lots until the bidders cry uncle or ghost-selling onsite to avoid paying Proxibid fees, with the same items up for sale in a future auction.

Post Script: We still do patronize a few auctions whose owners we know, but bid cautiously rather than confidently. We are pleased to learn, however, that more auction houses are dropping these terms. Watch for updated rankings this week!


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.

Consignor and maximum-bid policies

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:

  1. 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.
  2. 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.
  3. 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.

Proxibid should conceal maximum bids

Every now and then we offer constructive criticism, and this post concerns a bidding component that may be under reconsideration, and that is, sharing the maximum bid for a lot when that item appears on the digital block. We’re happy to have learned that Proxibid is working on this problem, which is yet another reason why we support the portal.

We believe that Proxibid is the best auction portal in the business because of the company’s technical expertise coupled with over-the-top customer and sales service. As its redesign indicates, the company’s success has to do largely with making the online auction experience as realistic as the onsite one. It does this with video, sound and nifty bidder windows.

We have had lingering concerns about sharing maximum bids with auctioneers when items come on the block. Not that we do not trust our Honor Roll companies or NAA-member firms; we do, with a few exceptions. We know the temptation to raise bids on lots that will sell below retail.

And we have posted several articles about high reserves and opening bids, such as this one.

Increasingly we have been reading terms of service like this one: The auctioneer may open bidding on any lot by placing a bid on behalf of the consignor. (That’s pretty close to shill-bidding, illegal in some states.)

Other service terms that in recent weeks have appeared more frequently allow the auctioneer to open bids at any level he sees fit.

If the auctioneer knows the maximum bid on a lot, then these service terms legally allow him to automatically raise the bid to the top level for any item.

This is not how auctions operate. Imagine if the onsite auctioneer had super-human powers, able to look at faces in the room and see maximum dollar signs glowing on their foreheads.

We know that Proxibid is aware of these issues and is working on a fix.

If changes are forthcoming, there may be some pushback from auctioneers about not viewing maximum bids. But they should be patient, because a policy like this will eventually mean more bidders for most auction houses within 3-6 months, as word spreads about the even playing field.

There are technological issues, too, in accomplishing this goal. We know the digital challenges but also feel a solution to the maximum-bid issue, which we presented here, will be a win-win-win situation for auctioneer, bidder and Proxibid.

Here’s why: The closer we can get on the Web to mirroring the real auction experience–where nothing is certain, by the way–the more trustworthy online maximum bids will become. That will dramatically increase the number of bidders at any Proxibid auction. It’s tantamount to have 200 rather than 100 bidders in the room in an onsite session.

That means more profit.

Proxibid’s unbridled success has been in mimicking technologically the online auction so that it provides the allure of the onsite one. We are more enthusiastic than ever about the company because it continues to work hard at achieving fairness and generating excitement in the traditional auction experience.

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.