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Shill Bidding and Auction Ethics
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October 27, 2021 - 2:03 am
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Starting this one after an obvious shill scheme going on at a “ranch sale” in central Texas. The owner was so blatantly using shill bidders it was absurd. It took me about one quarter of the auction to realize the scheme and I didn’t buy one gun afterwards. 

I was there in person. 

Not only is this highly unethical and illegal in Texas, it artificially inflates the prices of firearms. It is a problem. 

I documented the goings on with video but I’m local and figured it wasn’t worth the bad blood to go after them. Although, I did quite delicately mention my opinion that there were some “illegal components” in the auction when it came to paying the bill the following Monday, they proceeded to chew me out before my explanation; the auction house showed it’s cards before I even brought up any accusation. They knew exactly what was going on. 

Any other experiences like this? It’s my understanding it is rampant in the auction industry. I have started a blacklist. 

Regards,

 

Robert Dean

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October 27, 2021 - 3:21 am
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 In some states pulling bids out of the air is legal. For example RIA under term and conditions section 12 Reserves states “If a lot is offered with a reserve, RIAC may implement that reserved by bidding on behalf of the consignor.” With live bidders, phone bidders, and internet bidders how do you know. Many guns are hammered sold only to later show up as no sale in the prices realized later. Some of the auction companies later offer these lots to high bidders a few days after the auction.

 Then some of the auction houses buy collections directly from the seller and sell them for themselves. This is big business, you play by their rules. T/R

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October 27, 2021 - 3:32 am
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If it’s possible to pull this off at a live auction, with people like you around to see what’s happening, consider how MUCH easier is it to shill online, with the bidders identities undisclosed!

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October 27, 2021 - 3:38 am
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TR said Some of the auction companies later offer these lots to high bidders a few days after the auction.
 

“The high bidder was a cheat who wouldn’t pay up, so LUCKY YOU–you can have it at YOUR price!”

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October 27, 2021 - 4:29 am
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clarence said

TR said Some of the auction companies later offer these lots to high bidders a few days after the auction.
 

“The high bidder was a cheat who wouldn’t pay up, so LUCKY YOU–you can have it at YOUR price!”  

  The high bidder was the auction house on the wrong side of the bid. In these cases the seller thinks it’s sold, finds out later it wasn’t and isn’t happy. The auction company has to quietly get the 2nd high bidder and the seller to agree on a price. The 2nd bidder can sometimes get it cheaper than his original bid. T/R

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October 27, 2021 - 9:46 am
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TR said
 In some states pulling bids out of the air is legal. For example RIA under term and conditions section 12 Reserves states “If a lot is offered with a reserve, RIAC may implement that reserved by bidding on behalf of the consignor.” With live bidders, phone bidders, and internet bidders how do you know. Many guns are hammered sold only to later show up as no sale in the prices realized later. Some of the auction companies later offer these lots to high bidders a few days after the auction.

 Then some of the auction houses buy collections directly from the seller and sell them for themselves. This is big business, you play by their rules. T/R  

Yes, it’s big business, indeed!

Bidding on behalf of the consigner is corrupt.  At what auction have you been to where the consigner is sitting in the audience allowed to bid on their items to their reserve?  But that’s what RIA does.  I can see someone wanting a reserve, but to bid on a firearm not against other actual bidders, but against the consigner is dishonest, to say the least.  There are plenty of other auction houses out there, you don’t have to patronize a particular one.  “Cast your ballot” elsewhere.

Some auction houses seem to exaggerate the qualities of what they peddle, to the point where it’s ridiculous!  Anyone recall this rifle which was analyzed on this forum? This rifle did not leave the factory in its current form and the storyline is pure fiction:

https://www.rockislandauction.com/detail/67/1025/world-record-winchester-1886-serial-1-presented-to-capt-lawton

Even a certain on line auction platform for firearms is rather shady.  I bid on a revolver once up to a fair price once towards the end of an auction, such that the price at my high bid wasn’t a bargain, but fair to buyer and seller.  At the end, a bidder came out of nowhere with no past history bidding against someone else pushing the price to a third over full retail.  I cannot recall if this particular revolver was resisted, but I have noted in the past that that particular seller often realists items later that supposedly had sold.

The bottom line is that there are many sharks out there, so set your bottom line on a particular firearm and stick to it.  If you don’t get it, it wasn’t meant to be and in my experience you often find something elsewhere for less.

There are decent auction houses out there that are more honest than others.  As you gain experience, you quickly determine which ones are more or less shady.

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October 27, 2021 - 5:37 pm
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I have witnessed many of these things first hand.  I have also had some of these things happen to me. Believe me you guys are just scratching the surface of what is really going on.

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October 27, 2021 - 5:59 pm
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I will admit that I often start the bidding at benefit auctions and sometimes move the bidding along when it gets bogged down. I occasionally “win” the item but I pay the price whether or not I wanted the item. I won’t bid it up over fair market value and sometimes I get a bargain. I don’t think what I’m doing is wrong and the auctioneers generally know what I’m doing. A local auctioneer does “estate auctions” and has had the same couple of rare firearms at multiple sales. I know he uses schill bidders and I’ve quit attending his auctions. All firearms are sold as “antiques” whether they are or not.

 

Mike

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October 27, 2021 - 10:52 pm
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There’s several different ways to look at this issue.  Mike provides the charity example which is a good one and I have no issue with it.  I had a friend selling a piece on an internet auction.  The bidding was on the low side.  I threw in several bids (without him asking) and much to my surprise, won.  Even though this piece was completely out of my genre, I simply sent him a check … the piece is still here… I don’t look at it all that often.  I find it possible to learn through the experience process at any age.

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October 28, 2021 - 2:44 am
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Inexperienced, yes, and quite naive, but it really saddened me as I read the last two posts – from respected and senior members of our community. 

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October 28, 2021 - 12:38 pm
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clarence said
If it’s possible to pull this off at a live auction, with people like you around to see what’s happening, consider how MUCH easier is it to shill online, with the bidders identities undisclosed!  

Exactly, Professional Auctioneers/Houses are experts at recognizing when they have a fully engaged bidder (sucker).

With online and on-the-phone bidders and shill bidders competing it is far too easy to have a crooked-game run against you.

And before you know it, you’re just getting “bumped” for more money and bidding against yourself.

There is such a thing known as “The Winners Curse”. 

Know when to walk away.

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October 28, 2021 - 4:44 pm
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foxfire said
Inexperienced, yes, and quite naive, but it really saddened me as I read the last two posts – from respected and senior members of our community.   

In my case, what I thought of being an ok idea somewhere around ten to fifteen years ago, doesn’t mean the same applies today.  I’ve evolved into giving deeper thought to the ethical dimension of things.  Ethics are not black and white.  Generally, there are examples most of us would agree as being clearly right or wrong, but there are also many examples where we won’t all come down on the same side of the line.  Many will attend a charity auction and bid higher on an item than they normally would as they are partially motivated to support the charity.  If I end up winning and know I’ve paid more than something was worth, I have the satisfaction of knowing it went to a good cause. I suppose those that bid less than me (and lost) might feel differently.

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October 28, 2021 - 6:41 pm
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Fair enough, so long as your intent is to win. Any bidding with no intent other than to separate others from their money is thievery, plain and simple. 

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October 30, 2021 - 9:00 pm
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mrcvs said

Yes, it’s big business, indeed!

Bidding on behalf of the consigner is corrupt.  At what auction have you been to where the consigner is sitting in the audience allowed to bid on their items to their reserve?  But that’s what RIA does.  I can see someone wanting a reserve, but to bid on a firearm not against other actual bidders, but against the consigner is dishonest, to say the least.  There are plenty of other auction houses out there, you don’t have to patronize a particular one.  “Cast your ballot” elsewhere.

Some auction houses seem to exaggerate the qualities of what they peddle, to the point where it’s ridiculous!  Anyone recall this rifle which was analyzed on this forum? This rifle did not leave the factory in its current form and the storyline is pure fiction:

https://www.rockislandauction.com/detail/67/1025/world-record-winchester-1886-serial-1-presented-to-capt-lawton

Even a certain on line auction platform for firearms is rather shady.  I bid on a revolver once up to a fair price once towards the end of an auction, such that the price at my high bid wasn’t a bargain, but fair to buyer and seller.  At the end, a bidder came out of nowhere with no past history bidding against someone else pushing the price to a third over full retail.  I cannot recall if this particular revolver was resisted, but I have noted in the past that that particular seller often realists items later that supposedly had sold.

The bottom line is that there are many sharks out there, so set your bottom line on a particular firearm and stick to it.  If you don’t get it, it wasn’t meant to be and in my experience you often find something elsewhere for less.

There are decent auction houses out there that are more honest than others.  As you gain experience, you quickly determine which ones are more or less shady.  

Yes, I agree with everything you said. I’m fairly new to the game and was really ticked off at how blatant it was at this particular auction. Either way I always set my top dollar and am disciplined at sticking to it. But on two particularly rare winchesters I was going after and on one of the 73’s after it got to about $3500 it was just me bidding against them (being the consignors son). Internet bidding had stopped and it was just them and I for sure. Figure it cost me several thousand dollars but my top dollar was $5500 and strangely thats exactly where the let me have it. It was almost as if they had seen my notes, which is entirely possible because I spent half the previous day at the preview bullshitting with the consignor and left my little notepad laying around pretty freely.  

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October 30, 2021 - 9:23 pm
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I have bid at auctions where I see it is just me and the auctioneer/owner.  If I want it bad enough I’ll stay in until he has made what he wants, but not always.  I always stop when I see I’m bidding against the auction employees/shills.

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