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

[bounce]

Is there any actual evidence that getting several people "involved" really yields higher prices all the time? That's as much urban legend as it is fact, which is to say "no, there is no consistent evidence". It takes exactly two and only two every time - the winner and the runner up.

I hate secret reserves, and I don't see how this can be good for anyone. So many people here have discussed how they "move" their funds between auctions at various points based on what they're winning or not. If you don't at least know it's a "reserve auction", even if you don't know what the reserve is, you've allocated your funds to that auction. Then you find out AFTER it's over that you didn't actually win because it didn't hit the reserve?

This one is simple - at least note there's a reserve so people know. Once the reserve it met, the auction should say it's live and will sell. Anything else is just silly.

As far as auction houses and their employees consigning/bidding, I probably don't have that big of an issue with it as long as there are some common sense rules and disclosure around it. Some of that has been suggested, like disclosing which auctions have bids from parties with potential "conflicts of interest". Another should be for the auction house itself - if they're bidding, bid once and once only at some point prior to final day. The idea that the auction house and their employees would have the same "rights" as other bidders is again good for no one, and it clearly fuels speculation of manipulation and improper price reporting post auction, as this thread and many others demonstrate.

For the most part I set a bid and forget it - if I win great, if I don't oh well. I do try to revisit late in the auction (day before final or final day) and search for overlooked items. Otherwise, I'm comfortable with what I bid which makes it easy to go to sleep and not worry about it. I have never woke up the following morning and been disappointed as a result. And yes, I'm the second bidder quite a bit, but when I am it reinforces that I set value correctly. You literally just can't win them all.

[Chris Ivy]

There seems to be a lot of misinformation and incorrect assumptions regarding the terms & conditions of Heritage Auctions, so I’m pleased to take this opportunity clarify.

Let’s begin by noting the definition of shill bidding. Shill bidding is the practice of placing bids on auction lots to intentionally raise the bid price with no interest in actually purchasing the lot.

Next, here is the term that is being referenced in our terms & conditions, term 21:

21. The Auctioneer, its affiliates, or their employees consign items to be sold in the Auction, and may bid on those lots or any other lots. Auctioneer or affiliates expressly reserve the right to modify any such bids at any time prior to the hammer based upon data made known to the Auctioneer or its affiliates. The Auctioneer may extend advances, guarantees, or loans to certain consignors.

Here is what this term means:

(1) Heritage does sometimes consign items that they own to the auctions and some of those items have reserves. The reserves are published online, and reserves are a form of bid placed by the consignor.

(2) Heritage will place bids at a wholesale level on lots owned by other consignors if we think that by buying it at that price we can make a profit in the future. These bids are placed strictly as potential buyers, and are without regard to any existing bids on the lot. In addition, bids placed by the house are entered a week before the close of our sports catalog auctions, well before the bulk of serious bidding begins. The part about modifying bids has to do with outside data regarding an item's value, such as a third party authenticator changing an opinion about a clubhouse signature on a team signed baseball.

(3) Many Heritage employees, including myself, are also collectors, and we will place bids on items that we want for our own collections. When I win something, I pay the full hammer price, the full buyer's premium, and Texas sales tax.

Heritage and Heritage employees do not shill bid. It is an illegal practice, no matter the state in which the business is based, and any employee that engages in the practice would be reprimanded and very likely terminated.

Our auctions do not have hidden reserves. All reserves are noted and published online 7 days prior to the auction close for catalog auctions (3 days for internet only auctions), and any item that does not meet reserve is listed as ‘Not Sold’ in our post auction results.

Last, while I can understand some skepticism from collectors given the previous scandals related to some other sports auction firms, Heritage has been conducting collectibles auctions for over 40 years and is the largest auction firm founded in the United States. The fact that our policies are disclosed publicly should leave no doubt that we have nothing to hide, and that our practices are both legal and well within the bounds of hobby ethics.

I hope that this post clears up any confusion or concerns about the terms & conditions of our auctions. This will serve as my only post on the matter so if anyone has any additional questions, then please feel free to contact me directly.

Regards,
Chris

Chris Ivy | Director of Sports Collectibles
HERITAGE AUCTIONS
3500 Maple Avenue | Dallas, TX 75219
877-HERITAGE | (877) 437-4824
Direct: (214) 409-1319 | Fax: (214) 409-2319
Chris@HA.com | www.HA.com
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[Rhotchkiss]

Thank you Chris for the explanation. I love the cards that Heritage sells and I spend a good deal of money with Heritage annually. So, I ask these questions not out of antagonism or spite, but as a customer who wants to truly understand the rules. Here is Rule 21, as you quote it:

"The Auctioneer, its affiliates, or their employees consign items to be sold in the Auction, and may bid on those lots or any other lots. Auctioneer or affiliates expressly reserve the right to modify any such bids at any time prior to the hammer based upon data made known to the Auctioneer or its affiliates. The Auctioneer may extend advances, guarantees, or loans to certain consignors."

A few questions:

1. Why can the Auctioneer, its affiliates or their employees bid on the lots that they consign? What would be the reason for someone bidding on their own lot, other than to shill? Indeed, if they truly wanted to buy it, they never would have consigned it.....

2. If I consign, can I bid on my own lots, assuming that I intend to pay the full hammer and BP if I win my own lot? If not, then why can he Auctioneer, its affiliates or their employees do so?

3. Are we allowed to modify our bids prior to hammer based on info that we find out? If not, than why is Auctioneer and its affiliates allowed to?

Seems that Auctioneer (and sometimes the employees), in its/their capacity as buyers, are given certain advantages that other buyers are not afforded, no? If I am wrong here, please explain.

Again, I love Heritage and I am customer, and plan on being one for a longtime. But I think these are legitimate questions, and some of the items that give board members heartburn.

[Peter_Spaeth]

It's good to hear from Heritage. It would be even better to hear from Heritage about their view on the altered card scandal enveloping the hobby, and what (if anything) they are doing in response.

For example, has the winner of this apparently trimmed and recolored 70K Hull rookie been contacted?
https://www.blowoutforums.com/showpo...postcount=1778

[steve B]

In a few live auctions where lots I've wanted have had reserves that weren't disclosed the way it worked was that I was bidding against the reserve which was handled as bids as if I was bidding against another buyer. Seems strange, but it worked pretty well, one place would announce when bidding was against the reserve, another wouldn't
Both would disclose the reserve when the bidding ended, or once it was exceeded. Both would usually then allow a bit at the reserve unless the high bid wasn't even close.

So like
all done at 120? hammer, "the reserve was 130 do you want it?"

[perezfan]

Originally Posted by Peter_Spaeth

It's good to hear from Heritage. It would be even better to hear from Heritage about their view on the altered card scandal enveloping the hobby, and what (if anything) they are doing in response.

For example, has the winner of this apparently trimmed and colored 70K Hull rookie been contacted?
https://www.blowoutforums.com/showpo...postcount=1778

Chris,

Your post here is much appreciated. Thank you.

I know you said that was to be your only post. But to Peter’s inquiry, please assure us that the winner of the altered Bobby Hull Card was notified!

It is not a poor reflection on Heritage whatsoever. A card doctor with nefarious intent submitted it to PSA, where it was issued a high numerical grade. The trouble is that once these altered cards are slabbed, they can (and will) end up everywhere in the hobby... trade shows, auctions, ebay, private sales, inheritances, and so on.

So rather than being a poor reflection on Heritage, the communication would be viewed as an enormous positive. Can Heritage notify the unsuspecting buyer, and more importantly report the consignor to Law Enforcement? Heritage can play an integral role in cleaning up the hobby!

Please let us know if necessary steps are being taken to alert the buyer and expose the consignor. True collectors will be forever thankful for any help in eradicating the corruption and deception that is plaguing this hobby.

To have a major player in the industry such as Heritage on our side would be a huge feather in your cap. Your loyal and core collector base would be forever thankful!

[Johnny630]

Originally Posted by perezfan

Chris,

Your post here is much appreciated. Thank you.

I know you said that was to be your only post. But to Peter’s inquiry, please assure us that the winner of the altered Bobby Hull Card was notified!

It is not a poor reflection on Heritage whatsoever. A card doctor with nefarious intent submitted it to PSA, where it was issued a high numerical grade. The trouble is that once these altered cards are slabbed, they can (and will) end up everywhere in the hobby... trade shows, auctions, ebay, private sales, inheritances, and so on.

So rather than being a poor reflection on Heritage, the communication would be viewed as an enormous positive. Can Heritage notify the unsuspecting buyer, and more importantly report the consignor to Law Enforcement? Heritage can play an integral role in cleaning up the hobby!

Please let us know if necessary steps are being taken to alert the buyer and expose the consignor. True collectors will be forever thankful for any help in eradicating the corruption and deception that is plaguing this hobby.

To have a major player in the industry such as Heritage on our side would be a huge feather in your cap. Your loyal and core collector base would be forever thankful!

+1 on above and Peters question

[ullmandds]

Again...this was not to be an AH bashing thread...but since chris came on here in the 1st place...I also would like to hear his responses to the questions posed.

Perhaps someone could email the questions to him and post his response here???

[CobbSpikedMe]

While I understand what Chris is saying, I still think its slimy of an auction house to bid in it's own auctions for any reason. Basically you have a multimillion dollar bidder that can outbid everyone on all the lots in the auction raising all lots to a "wholesale" price. Or bidding up others who may have had a shot at a good price on something if it was falling under the radar or demand happened to be low at that time. I just don't like it.