Goldin Auction - Honus Wagner “Rookie Card”

[benjulmag]

Originally Posted by Peter_Spaeth

So they can run you up to the reserve. I am surprised there has not been more angst about this. Back in the day there might have been.

Peter,

That is a recognized practice among most major auction houses, disclosure of which is buried in the fine print of the auction rules. I characterize it as legalized fraud, as its purpose is to induce bids on the mistaken belief there is genuine interest at that bidding level.

[Fred]

Originally Posted by benjulmag

Peter,

That is a recognized practice among most major auction houses, disclosure of which is buried in the fine print of the auction rules. I characterize it as legalized fraud, as its purpose is to induce bids on the mistaken belief there is genuine interest at that bidding level.

Uh, yeah!

Why is this type of auction/sale allowed. It's basically trying to induce people with a lot of money that don't know any better to purchase something very hyped.

Why is this legal? Is this a practice/tactic auction houses like Lloyd or Christies employ?

[Yoda]

I believe Aaron Seefeldt owned this card at one time. I am sure he could add something here.

[Peter_Spaeth]

Originally Posted by Yoda

I believe Aaron Seefeldt owned this card at one time. I am sure he could add something here.

Look on the other thread I referenced, he posted there.

[benjulmag]

Originally Posted by Fred

Uh, yeah!

Why is this type of auction/sale allowed. It's basically trying to induce people with a lot of money that don't know any better to purchase something very hyped.

Why is this legal? Is this a practice/tactic auction houses like Lloyd or Christies employ?

It is employed by Christies and Sotheby's.

[oldjudge]

I like the HA method where they just disclose the reserve late in the auction process. I was unaware that Goldin Auctions did this; I think they should be more transparent and change to the Heritage method.

[Aquarian Sports Cards]

Originally Posted by oldjudge

I like the HA method where they just disclose the reserve late in the auction process. I was unaware that Goldin Auctions did this; I think they should be more transparent and change to the Heritage method.

In their terms Heritage also states the right to bid an item up to the bid below its reserve.

[robertsmithnocure]

Originally Posted by Fred

Is this a practice/tactic auction houses like Lloyd or Christies employ?

I think that this practice is common with many of the major art auction houses.

Other niche auction houses, like some in our hobby, use a similar practice too.

This is from Mile High Card Company's Auction Rules on their website:

2d) ...A reserve price is the confidential minimum price that a consignor will accept before they will sell the material, this means that a bid of equal or greater than the confidential reserve must be placed for a successful bid to be accepted on that lot. MHCC may implement this reserve by bidding on behalf of the consignor and may place a bid up to the amount of the reserve, by placing successive bids if necessary. In the limited instances where MHCC has a financial interest in a lot beyond our commission, we may place a bid to protect our financial interest...

And from SCP Auctions' Terms and conditions:

Reserve bid prices are not publicly available and will not be published. SCP may implement this reserve by executing bids on behalf of the consigner and may place a bid up to the amount one increment below the reserve, by placing successive bids if necessary.

[Peter_Spaeth]

As I like to say, bidding shenanigans have been going on since the first bushel of wheat was sold in the agora, and probably before.

[Peter_Spaeth]

Originally Posted by benjulmag

Peter,

That is a recognized practice among most major auction houses, disclosure of which is buried in the fine print of the auction rules. I characterize it as legalized fraud, as its purpose is to induce bids on the mistaken belief there is genuine interest at that bidding level.

I get it, I was just expressing surprise it hasn't evoked more angst, as people used to bitch a ton about hidden reserves and such.

[Rhotchkiss]

Originally Posted by benjulmag

Peter,

That is a recognized practice among most major auction houses, disclosure of which is buried in the fine print of the auction rules. I characterize it as legalized fraud, as its purpose is to induce bids on the mistaken belief there is genuine interest at that bidding level.

+1. It’s dog shit and, while legal, ethical fraud. I don’t like a hidden reserve, but I get it and think it’s fair enough. But an AH should not be able to effectively shill up the price, making it seem that real bids are being placed, in an effort to get someone to place a real bid at the hidden reserve amount. I despise this practice. Now, just because an AH can do this does not necessarily mean they do it, although I expect they do/would if an item is below the hidden reserve- why not use the tool if you can.

[tjisonline]

I get why they do it but like many here, do not agree with the practice. It’s dogshit as you stated.

If a consigner (or AH) has a minimum price set, that’s perfectly fine. Just open the auction lot at that price instead of faking additional interest (bids).

Originally Posted by Rhotchkiss

+1. It’s dog shit and, while legal, ethical fraud. I don’t like a hidden reserve, but I get it and think it’s fair enough. But an AH should not be able to effectively shill up the price, making it seem that real bids are being placed, in an effort to get someone to place a real bid at the hidden reserve amount. I despise this practice. Now, just because an AH can do this does not necessarily mean they do it, although I expect they do/would if an item is below the hidden reserve- why not use the tool if you can.

[calvindog]

I don’t believe REA does this.

[tjisonline]

Originally Posted by calvindog

I don’t believe REA does this.

They look good
*******

16. No Consignor Bids. Consignors are prohibited from bidding on their own materials or having others secretly bid for them on their behalf. If any consignor directly or indirectly bids on his own items at auction, it is without REA's consent, and REA reserves the right, at its sole discretion, at any time and without any warning, to remove any bids it suspects of being fraudulent or placed in consort with a consignor.

17. No House Bids. There is no circumstance under which REA may execute bids for its own "house account," thereby unfairly competing with bidders. In fact, to be clear, REA does not have a "house account," unlike many other auction operators. Under no circumstance is any employee of REA authorized to place bids in this Auction on their personal accounts. Employees of REA (and REA) may consign their personal property or owned items to this Auction, provided they will be treated like any other consignor (including not being permitted to bid on their own lots).

13. Opening Bids and Reserve Amounts. Each lot in this Auction is accompanied by an opening bid (meaning a minimum bid amount). Select lots may have a confidential reserve placed on them by the consignor, which means that the lot will not be sold until a bidder bids an amount equal or greater than the reserve amount. A reserve is set by the consignor (not by REA) when the consignor determines that the value of a lot is such that they are not willing to sell the lot if its sale price does not attain the reserve amount. The reserve notification may not post to a lot until the Auction is in progress and as late in the Auction as on or about 24 hours prior to the Final Initial Bid Day’s conclusion at 9:00 PM ET that day. Check back before the Auction’s Final Initial Bid Day ending (i.e., prior to 9:00 PM ET that day) to see any applicable reserve. The absence of a reserve when the Auction commences and early in the Auction process should not be interpreted as there being no reserve applicable. Lots subject to a reserve will be clearly designated as subject to a reserve (or using similar language) on their individual pages online in accordance with the timeline posted above. REA does not update any physical (printed) Auction catalog with reserves announced after the catalog was mailed to recipients; for the most up to date information on reserves, bidders should consult the lot details online. Until such time that the confidential reserve is met, the lot page will display "Reserve Not Met" directly underneath the current bid. Bidders may continue to bid on such lots using all available bid increments.

Once the confidential reserve is met, the status of the lot will change to "Reserve Met" on the lot’s online page. Reserve amounts will not be disclosed online but may be available upon request unless the consignor has restricted disclosure. Items with a confidential reserve may be accompanied by an estimated value. The confidential reserve amount will be lower than or equal to this estimated value.

https://bid.robertedwardauctions.com/terms.pdf

[oldjudge]

Nor does LOTG

[bcbgcbrcb]

So we think most likely only one bidder against the auction house at some point. Any idea who that bidder might be and/or at what point everyone else was out?

At first, this looks like a lost opportunity from the consignor standpoint because of the high hidden reserve. But, let’s say the second bidder was out of the running at $350K. The consignor only gets that amount then. But now, they have the card back with a $850K comp (sort of), although noted that the card did not sell. A couple of years from now, they give the card to REA/Heritage/AH. Most likely, the opening bid will be much more reasonable and interested bidders researching past offerings of the card will find the not met reserve at $850K and that number will play a significant roll in how high they are willing to go. Of course, if the item description is more honest and straightforward, that will have a huge impact as well. So, potentially, this consignor might have ended up with $350K on a card whose prior highest sale was $51K, now they are working with an unsold number of $850K. This may not be a bad decision at all by the consignor, I can see the logic in possibly getting a much bigger payday down the road and Goldin played right into it by allowing the $1MM reserve.

[BRoberts]

Originally Posted by oldjudge

Nor does LOTG

Nor does Andy Sandler’s All Sports Collectibles Auctions.