Interesting thread on the non-sports board

[Fred]

The bottom line is that the prices realized in the auctions influenced by house or consignor bidding creates a somewhat inflated view of the prices realized.

Whose to say that the house doesn't put a maximum bid on an item and that the consignor doesn't also bid it up. What happens if the house and consignor bid up the auction as the only two bidders (because the actual market value for the item is less) and the final hammer price (including juice) is used as a bench mark in value for that particular card. It's all bull$hit... lets make some money and to heck with the hobby(ist)... I suppose the above scenario doesn't play out too often but once is too much...

[buymycards]

Here are my thoughts: (As if anyone cares)

1. Bidding on items that are consigned to your auction. Totally unethical. The auction house has the chance to inspect the items and make a purchase offer before they are placed in the auction. Once the auction begins, then it should be hands off.

2. Bidding on your own items that you consigned to an auction house. Totally unethical.

3. An auction house putting their own items in their own auction. OK, as long as they are disclosed as their own items.

4. An auction house bidding on their own items in their own auction. Totally unethical.

5. Employees of an auction house bidding on items in their auction. Totally unethical.

Rick

[calvindog]

Originally Posted by buymycards

Here are my thoughts: (As if anyone cares)

1. Bidding on items that are consigned to your auction. Totally unethical. The auction house has the chance to inspect the items and make a purchase offer before they are placed in the auction. Once the auction begins, then it should be hands off.

2. Bidding on your own items that you consigned to an auction house. Totally unethical.

3. An auction house putting their own items in their own auction. OK, as long as they are disclosed as their own items.

4. An auction house bidding on their own items in their own auction. Totally unethical.

5. Employees of an auction house bidding on items in their auction. Totally unethical.

Rick

Now imagine if auction houses do all of these things -- and don't disclose any of this to its bidders. Suddenly, Heritage doesn't look so bad.

[PolarBear]

Originally Posted by calvindog

Now imagine if auction houses do all of these things -- and don't disclose any of this to its bidders. Suddenly, Heritage doesn't look so bad.

True, but being the least unethical compared to their peers, still isn't a place where a company should want to be.

[barrysloate]

Bobby- here's a hypothetical situation:

After you were high bidder at $1150, bidder #12 came in and left a ceiling bid of at least $1950. Then somebody else came in and left a bid of say $1800, which pushed bidder #12 near or at his maximum. Was there enough time between your bid of $1150, and the point you realized the bid was now $1950? That's a possible scenario.

As far as Heritage disclosing their questionable bidding practices, it is better that it is out front rather than hidden, but it still isn't a good thing. Given all the scandalous auction practices that have been revealed of late, this information can only get bidders angry.

[bobbyw8469]

Sloate...if your theory is true, then the bid # should have went from 12 to 14. Only one more bid was placed. It left a sour taste in my mouth.
I was bid #11. Bid #12 was the $1950. No more bids came in.......if someone else had bid like you said, then the bid count would have been #13 instead of #12. I am guessing the consignor bid his maximum he was willing to take for the set (which was not worth THAT much).....

[barrysloate]

If there was a bid count and you are certain that no other bids came in, then I agree my theory doesn't work. You might want to speak to someone at the auction house, and ask them how the bids progressed the way they did.

[Wesley]

Originally Posted by buymycards

Here are my thoughts: (As if anyone cares)

1. Bidding on items that are consigned to your auction. Totally unethical. The auction house has the chance to inspect the items and make a purchase offer before they are placed in the auction. Once the auction begins, then it should be hands off.

2. Bidding on your own items that you consigned to an auction house. Totally unethical.

3. An auction house putting their own items in their own auction. OK, as long as they are disclosed as their own items.

4. An auction house bidding on their own items in their own auction. Totally unethical.

5. Employees of an auction house bidding on items in their auction. Totally unethical.

Rick

That pretty much sums up my thoughts as well, Rick. Whether it is spelled out in their policies or not, I am simply not comfortable with Heritage placing bids.

[calvindog]

Originally Posted by Wesley

That pretty much sums up my thoughts as well, Rick. Whether it is spelled out in their policies or not, I am simply not comfortable with Heritage placing bids.

Of course, you guys are right, but good luck finding a single auction company that is fully ethical and honest -- you simply will not. Finding one that does not break the law is difficult enough.

[E93]

"21. The Auctioneer or its affiliates may 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 following scenarios are perfectly acceptable in a Heritage auction according to this rule as I understand it:

1. Chris Ivy can consign his own card. He can watch to see if any top all bids come in. When one comes in, with full knowledge of it, he can bid that person up to their maximum by stopping one increment short of the top all bid.

2. If no top all bid is placed, Chris can simply be an aggressive bidder in the closing minutes of the auction, continuing to artificially drive the price up, while watching who the other bidders (with knowledge of their previous bidding habits) are and how they are reacting. When it seems that his last bidding opponent won't go any further, Chris can simply withdraw ("modify") his last bid two seconds before the hammer falls, leaving the "underbidder" as the actual winner.

3. Chris can bid up a $1000 card of his own up to $4000, creating a new threshold of a "realized price" for that card. He can then re-sell the card in another format with that high number of a "price realized" on the record in places like VCP.


I don't know any of the folks at Heritage other than Peter (who I like) and have no evidence to suggest that they have done any of these things. But it seems reasonable to infer that they have these rules there for a reason. Chris Ivy suggested in this thread that they do not utilize the full powers of rule #21. If that is the case, why not change it. It leaves a terrible impression about the motivations and potential activities of the auction house. It makes me very uncomfortable bidding in their auctions.
JimB

[Wesley]

Maybe we will know soon enough whether Heritage's practices are legal or not. There is an ongoing lawsuit filed last summer in TX by a former Heritage employee or consultant that alleges shilling, bidding manipulation, RICO violations, etc. Who knows. It is possible their disclosures will be enough to protect them.

[ElCabron]

If it's so ethical to only bid on items in their own auction 7 days before they close, why not post a list of items they've bid on? That way, 7 days before any of their auctions end, potential bidders can go check this list to see if any of the items they're bidding on, or going to bid on, are being bidding on by the auction house.

Or would bidders then be less likely to bid on those items? Yeah, I guess that kind of transparency wouldn't be good for business.

-Ryan

[barrysloate]

While Chris himself may choose to hold his own actions to a high ethical standard, and not run up bids, Heritage's system would certainly allow a rogue employee to consign lots and then pull a lot of shenanigans during the auction. This is a horrendous policy. That said, they are the biggest collectibles auction house in the world, selling a few hundred million dollars worth of rare coins every year. Sports is a drop in the bucket. So something must be working for them.

[Rich Klein]

http://blogs.dallasobserver.com/unfa...age_auctio.php

As an aside, Sam Merten, who wrote this story for the Dallas Observer, used to work in the Beckett grading department and has a good knowledge of collectibles. I did not re-read the whole article or through all the comments; but I will later. There is no doubt that this is a fairly well balanced story and comments WERE well balanced and very interesting.

Rich