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

[perezfan]

Originally Posted by Buythatcard

I always found it a little strange when I would place max bids on multiple items at Heritage only to get outbid on most of them at the exact same time. I always felt like it was automated.

This is exactly what happened to me in Hunt's yesterday. The auction had just opened - I bid on a whole slew of items - and was instantly outbid on every single one! I have never had that happen before.... It's as if each lot already had a ceiling bid in place. Normally you are the high bidder for at least a short period.

I know Hunt has stated they are privy to use hidden reserves on certain items... but for every single lot (dozens actually) to receive outbids instantaneously feels like a mathematical impossibility.

[x2drich2000]

Originally Posted by perezfan

This is exactly what happened to me in Hunt's yesterday. The auction had just opened - I bid on a whole slew of items - and was instantly outbid on every single one! I have never had that happen before.... It's as if each lot already had a ceiling bid in place. Normally you are the high bidder for at least a short period.

I know Hunt has stated they are privy to use hidden reserves on certain items... but for every single lot (dozens actually) to receive outbids instantaneously feels like a mathematical impossibility.

While I'm not going to say there might not be an issue with some auctions, the AH placing automatic bids early doesn't make a lot of sense since they are also then limiting the number of potential bidders putting who may put in placeholder bids. I can also say it is not uncommon for me to go through the day an auction opens and put in a bid, and sometimes a bid several increments up if the opening bid is really low, on a majority of the card lots. Often I'll put in bids on lots up to say 50% of what I believe a lot should sell for with the idea to limit the number of other bidders. As someone who is willing to buy just about anything when the price is right, I do that to keep my options open during extended bidding when i go through looking for bargains. Have 2 or 3 people like me doing that and it is easy to see how you could get outbid immediately on multiple lots.

[perezfan]

Originally Posted by x2drich2000

While I'm not going to say there might not be an issue with some auctions, the AH placing automatic bids early doesn't make a lot of sense since they are also then limiting the number of potential bidders putting who may put in placeholder bids. I can also say it is not uncommon for me to go through the day an auction opens and put in a bid, and sometimes a bid several increments up if the opening bid is really low, on a majority of the card lots. Often I'll put in bids on lots up to say 50% of what I believe a lot should sell for with the idea to limit the number of other bidders. As someone who is willing to buy just about anything when the price is right, I do that to keep my options open during extended bidding when i go through looking for bargains. Have 2 or 3 people like me doing that and it is easy to see how you could get outbid immediately on multiple lots.

I know what you're saying, but it felt more like I was bidding against hidden reserves. You may well be correct, but this was a vast array of items that were in no way related. Much of it being obscure stuff with limited mass appeal. I've bid in hundreds of these auctions over three decades, and never encountered an opening day shutout like that one. Weird.

[BigBeerGut]

Yawn
Zzzzzz

Any one can buy any thing from any one any time online. Period. Posted rules from the AH matter not.

Just decide what you will pay and bid early or late. You sound like babys churning this same topic which has no answer. Just ketchup the fact the AH makes the item avalable to you!

Stop your wining

[Johnny630]

US economic recessions are the only time I’d contemplate bidding from auctions. This market is highly over inflated ....when it comes down its going to come down big.....a couple different issues may hit at the same time. Be patient and let the folk spend their money how they want. Don’t let emotions get you....save your money up and buy all this stuff at lower levels.
If not oh well you missed it ....B/S/T

[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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