Are mail bid auctions a HUGE DISGUSTING SCAM?

MrEureka

Got your attention, didn't I?

Seriously, a collector friend called a major auctioneer XXX and asked why his submitted bids for a mail bid auction were completely maxed. He was told participation for mail bid sales is usually light so the auctioneer can't always reduce bids to an increment over the second highest bid. If they did, too many coins would end up selling way too cheap. So the auctioneer simply maxes out the high bidder.

By comparison, anyone that watches Heritage or ANR auctions know that those companies run straight auctions. Internet and mail bidders USUALLY save money. That attracts MANY more bids, so few coins are given away.

Could it be that XXX is missing the boat? Are they cutting their own throat? If they ran a straight auction, maybe they would get more participation and not have to max out their bidders. Maybe they would have a chance to maintain their significant market share?

What do you think?

tradedollarnut

Twice I bid on items at Coin Galleries auctions and twice I won at my max bid. One turned out to be holed & repaired but not described as such [tho I didn't notice til years later]. Needless to say, I don't bid there any more.

MrEureka

Interesting. If TDN's the only one that has a problem with getting maxed out, I guess XXX might actually have the right idea. Which would make Heritage and ANR fools for running a straight mail bid auction. VERY interesting...

Coinosaurus

I suspect dealer ZZZ of running maxed-out deals as well. In such cases it's better to pay the 3-5% and have someone represent you at the auction.

MrEureka

In such cases it's better to pay the 3-5% and have someone represent you at the auction.

Tough to do at a mail bid auction.

dtkk49a

I belong to SLCC and I believe they max out the high bid in thier mail bid auctions. I've been meaning to email Sol Taylor about this.

gemtone65

A typical mail bid sale would be expected to draw only a fraction of the number of bidders as Heritage or ANR. As such, a second high bid (plus delta) auction framework will not work very well in these situations. But, rather than infer that Heritage and ANR should engage in either deceptive or high-bidder pays proxy-bid type auctions, a more reasonable proposal is to suggest that the typical mail bid firm should simply change its format and announce upfront that winning bidders will henceforth be liable for the full amount of their submitted bids. In short, different auction formats are best suited for different auction environments.

Lakesammman

Yes! Last time I participated was 1998. Was a small dealer. Thought they had died off.......:

Sunnywood

Think about what a mail bid auction REALLY is (in many cases):

A solicitation of offers to buy sight unseen merchandise with no return privilege.

Why would anyone play that game? You can only win if you bid too much. And yes, of course you are likely to get maxed out.

In my experience, every bid I ever submitted to Stack's other than a floor bid was maxed out. That included mail bids (to Coin Galleries mail bid sales), fax bids (for Stack's floor auctions), etc. When I say my bid was "maxed out," I do not denote that it was a deliberate action, but I can certainly report that this was the factual outcome. In other words, if my bid won the lot, it was always at my full bid amount. I have no problem naming names, because I am simply reporting the true facts about my bidding experience.

Conversely, my fax and internet bids placed with ANR and Heritage have often won lots at less than the maximum bid amount. My experience with other auction houses, (Goldberg, Superior, et al.) has been more complex, and I won't go into the details.

I don't consider it a "scam." It is a game and you have to know the rules. Assume that your bid will be maxed, that you are making an offer to buy that will not be reduced to a lower increment, and do NOT bid any more than you are certain that you are willing to pay. Unfortunately, collectors are likely to participate without fully understanding the situation, and they are likely to overbid in the hopes of beating out competitive bids that may not even exist, and they are thus likely to overpay. And any GOOD merchandise wouldn't be in a mail bid sale to begin with (although there are some exceptions, like sales of numismatic literature and other smaller sales that do not merit a floor sale).

Best,
Sunnywood

wayneherndon

I would have no problem with it if it was disclosed. The number and amount of my bids would differ depending on the two strategies, however. I would quit doing business with an auction company that consistently maxed out my bids unless that approach was disclosed.

WH

cointagious

<< <i>Are mail bid auctions a HUGE DISGUSTING SCAM? >>






<< <i>Seriously, a collector friend called a major auctioneer XXX and asked why his submitted bids for a mail bid auction were completely maxed. >>




Andy, you should just go ahead and name Smythe as this is surely a thinly veiled attempt to hide their true identity.

ldhair

I did a lot with B&M in the mid 90's.
The bid form had a spot you could check that let them increase your bid 5,10 or 15%
I think almost every coin I ever won was maxed. Sure seemed funny at the time.

The truth is I really didn't have a problem with it. If I bid I really wanted it.

Sunnywood

I remember that option on the Bowers & Merena bidding forms, where you could let them increase your bid. I always thought that was bizarre. If I wanted to bid 10% more, I would have put a higher number down. Why would anyone ever have selected that option? I guess it's a seemingly innocuous way of getting you to bid higher & spend more !!

Best,
Sunnywood

MrEureka

Andy, you should just go ahead and name Smythe as this is surely a thinly veiled attempt to hide their true identity.

I know you're joking but some may not. For the record, Smythe DOES reduce mail bids as much as possible. So do MOST auctioneers. But there are exceptions.

gemtone65 had the right idea. Auctioneers should state in their catalogs how mail bids will be handled. I'm going to suggest to PNG that they require their members to address this issue in their auction terms.

Julian

<FONT style="BACKGROUND-COLOR: #c0c0c0">Increments should be spelled out in all auctions.

I have always been hesitant to bid in mail bid sales, because they, for the most part, are not really auction sales, but like, as been stated before, make an offer events.

If there is something that I really want, I normally will contact the auctioneer, just prior to closing, or after, and ask what it will take to purchase the item.

When I first began attending auction sales, 40 years ago, mail bids were executed competitively, with the floor. That is the proper way to conduct an auction sale.

The major computer driven auctions of today are normally conducted that way and sellers, if they find it necessary, place reserves on the material.

I believe that the successful auctioneers have discovered that to be able to bring in the highest mail bids, that they need to represent their mail bids in that manner.

Many knew that in the past and got away from it, at some point, and are returning to it today.

All the major auctioneers of today, have at some time in the past, conducted themselves properly, but some have abused the mail bidders.

I hope that they can conduct proper auction sales, now, and in the future.
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