Heritage Auction. Lost on my Bid but Coin is now back in Dealers Inventory?

RadioContestKing · February 25, 2017 2:34PM

I saw a coin on the Dealers website Several Months ago that I was interested in. He wanted 875 and when I inquired last month I was told the coin went to the Long Beach Auction.

Now I bid this coin up to 700 bucks and was outbid by someone. Coin sold for 763.75 I was a little disappointed that I did not win the coin but moved on.

Now today I go back to that Dealers Website and the coin is back up but price lowered to 815? I always thought if you were the person selling the coin you could not bid? Is Heritage different?

It Sure makes me wonder about others running up the price of a coin and if they don't get enough they just buy it themselves and put it back up on there own website? But wouldn't these folks have to pay the fees at Heritage for winning that lot? Is this just Normal? I almost feel like I got shilled up to the 700....

Just curious........Enjoy Tom

UltraHighRelief · February 25, 2017 2:41PM

That's called a buyback. It's pretty common.

Walkerfan · February 25, 2017 2:46PM

Consignors are allowed to bid, so it is a type of shill bidding, for sure.

I once bid a Walker up to 650 and was outbid by 675. It was a strong bid, as the coin had been selling for 300 to 375. One day later; I got an email from a rep (who completely misspelled my name) telling me that the buyer was "unable to pay". Hmmm...I thought that it was a binding contract. He asked me, if I wanted the coin for 675? With shipping it would have been 705. I said "are you kidding me? I get run up and the buyer can't pay, so now you want ME to buy it?" Heck no......that sh*t didn't flush right with me.

coinhack · February 25, 2017 2:59PM

On some Heritage auction lots they post a minimum opening bid.

coinhack · February 25, 2017 3:00PM

Walkerfan, I don't blame you. I wouldn't have bailed them out on that coin either. Sounds like the seller's shill bid one increment too high.

RadioContestKing · February 25, 2017 3:01PM

All I can say is WOW, I never knew this before and that will surely change my buying from Heritage. How many other coins did I over pay because I was getting run up? So this Buyback that you talk about, the dealer or Seller can bid on his own coin and if he wins there are no fees?

They don't allow that on Ebay so I can't understand why Heritage would? If they want a certain amount of Money than it should be a Minimum put on the coin but being able to run up the price sure does not sit well with me either.........

Thank's for the info.......Tom

Hydrant · February 25, 2017 3:07PM

I gave up on the auction scene about two years ago. I'm just not good at it. My approach was more or less that of having fun with it all. So, I came away many times feeling that I got burned somehow. Of course it was more a case of me burning myself mostly. When I come up with a better strategy maybe I'll get back into it. Probably not. It's hard to beat the pros. As it should be.

rkfish · February 25, 2017 3:14PM

When I consign to Heritage I have never been able to bid on my own lots. Buybacks, yes but usually the coin would be listed with a reserve.

spacehayduke · February 25, 2017 3:21PM

@rkfish said:
When I consign to Heritage I have never been able to bid on my own lots. Buybacks, yes but usually the coin would be listed with a reserve.

How specifically does the buyback work? When is the buyback option taken, etc.

Thanks, SH

rkfish · February 25, 2017 3:25PM

How specifically does the buyback work? When is the buyback option taken, etc.

Usually when you post a reserve and it's not met you have a "buyback" of 3-5%......

BillJones · February 25, 2017 3:29PM

Dealer's can buy back the lots they consign to an auction. It is simply the last bid at the auction, and if the items does sell, a bell rings and an announcement is made that there was no sale. It now shows that on the auction results.

I had this happen on a coin that appeared in a Heritage auction. I saw the coin and was not excited about it, but later the dealer who owned sent it to me on approval. We had an negociation, and I ended up with the piece for quite a bit less that the "no sale" price at the auction.

RadioContestKing · February 25, 2017 3:42PM

Bill, so your saying that someone else WAS bidding on the coin and even tho there bid was higher than mine they too did not win the coin? I do not remember any bells or announcement that there was no sale...In fact I thought it showed and still does that the coin sold for the 763.75 There was NO minimum put on this coin.......

spacehayduke · February 25, 2017 3:43PM

I understand consignors can buyback, but when can they buy back? Is it only if a reserve is not met then they are required to buy back with a 3-5% fee, or is there other ways as well? It seems like the OP was actively bidding and was outbid (it seems it was all above a reserve or there was no reserve for this to happen), that seems different than a reserve not being met....

Best, SH

wondercoin · February 25, 2017 3:52PM

Tom. Might I suggest asking the dealer why the coin is back on the site after the auction?

I monitor all of the Washington quarter auctions the best I can and then what happens to the coins thereafter. It is very useful information to formulate buy prices later (and which auction prices to possibly totally disregard).

Wondercoin

epcjimi1 · February 25, 2017 3:55PM

@1tommy said:

Coin sold for 763.75 >

Guess not. Regardless the esoteric thread discussion. Yep,

davewesen · February 25, 2017 4:00PM

1tommy, don't forget that sometimes Heritage is bidding on coins for their inventory as well.

RadioContestKing · February 25, 2017 4:03PM

Mitch,

This Dealer is a Well respected Dealer and you don't think he would be offended with me asking how the coin ended up back on his site?

Since the fact I was the last bidder before who ever outbid me and its now back on his site I would think he was the one who outbid me.

Maybe I am wrong but I can supply you both links in a PM as I am not wanting to out the dealer when I still don't understand how he ended up with the coin back.

Dave this coin is back on the dealers site and was not bought for Heritage inventory...

Thanks tom

sparky64 · February 25, 2017 4:36PM

All sounds quite discouraging to me.
If you were out bid, so be it.
But to see it back up for sale at the original source, ouch. And at a price not too far from your bid.
It's not like you were trying to go lowball.

bestday · February 25, 2017 4:38PM

Heritage buying to also keep up their cred so that lots don't sell for lowball bids.

epcjimi1 · February 25, 2017 4:45PM

@bestday said:
Heritage buying to also keep up their cred so that lots don't sell for lowball bids.

I gotta ask. Heritage buys to keep up their cred and the coin re-appears on the dealers website.

How does this system work?

cameonut2011 · February 25, 2017 4:54PM

Perhaps the buyer/winning bidder defaulted on the item. In this case, the coin would be returned to the consignor or relisted for auction.

TommyType · February 25, 2017 5:14PM

https://coins.ha.com/c/ref/terms-and-conditions.zx?view=terms

Quoting item 13:

"13. Notice of the consignor’s liberty to place bids on his lots in the Auction is hereby made in
accordance with Article 2 of the Texas Business and Commercial Code. A “Minimum Bid” is an amount below which the lot will not sell. THE CONSIGNOR OF PROPERTY MAY PLACE
WRITTEN ”Minimum Bids” ON HIS LOTS IN ADVANCE OF THE AUCTION; ON SUCH LOTS, IF THE
HAMMER PRICE DOES NOT MEET THE “Minimum Bid”, THE CONSIGNOR MAY PAY A REDUCED
COMMISSION ON THOSE LOTS. ”Minimum Bids” are generally posted online several days prior to the
Auction closing. For any successful bid placed by a consignor on his Property on the Auction floor, or by
any means during the live session, or after the ”Minimum Bid” for an Auction have been posted, we will
require the consignor to pay full Buyer’s Premium and Seller’s Commissions on such lot."

The last couple of sentences are probably the pertinent ones here....

Commentary: While some will cry "FOUL", I think it's more of an acknowledgment that it's virtually impossible to stop bidding on your own item. Sure, you could prevent bidding using the same account...but who's to say that a spouse, or employee, or friend isn't bidding? Or that a "ghost" account isn't used?

Just realize that these things go on, and you can't be naïve about it. Set your price, and be prepared to walk away.

logger7 · February 25, 2017 5:19PM

Also HA allows dealers access to their virtual boarse, where they can list coins on their sight for sale.

RadioContestKing · February 25, 2017 5:33PM

This coin Never had a Minimum Bid Posted but if you read part of the above post,,,

For any successful bid placed by a consignor on his Property on the Auction floor, or by any means during the live session, or after the ”Minimum Bid” for an Auction have been posted, we will
require the consignor to pay full Buyer’s Premium and Seller’s Commissions on such lot."

So a Consignor does NOT have to have a minimum bid on his coin BUT they can bid without it and just have to pay both fees if they Win. So they can run up a coin and take a hit paying the fees. At least that the way I read that? Edit for comment to tommy....I am not crying foul as I stopped my bid where I felt comfortable but do want to understand how it got back on the dealers site. Trust me I am not going to buy the coin at 815 so will walk away.....

TomB · February 25, 2017 5:58PM

When I have consigned to Heritage I have been given the option of placing a published minimum or using a hidden reserve. Typically, a published minimum will be put in place a few or several days prior to an auction lot going off and folks will have to bid higher than that minimum to place the bid whereas a hidden reserve allows folks to place active bids even if they are below the reserve. In either case, if the reserve is not exceeded, the lot goes back to me and I am charged a modified buyer's premium, if you will, of approximately 10% or thereabouts of the reserve.

roadrunner · February 25, 2017 6:11PM

I described last week a series of auction buy backs by one dealer on a gem 1851 half. That coin went to auction 4-5X times over a period of 1-2 years, each time failing to sell. I could only surmise that the dealer did enough business with the auction house as to have a 0% buy back on any coins they supplied to them. It helps to fill up the auction for them. And when the coin wasn't in an auction, it was brought back to inventory until the next auction occurred. So figure anything can happen with reserves/buy backs based on what is negotiated between the house and their consignors. I would think that dealer consignors who can routinely bring $50K or more several times per year would be given more "favorable" terms.

On my last several auction contracts between 2 different major auction houses, I NEVER paid a buy back fee or any commission for a lot that didn't meet reserve. A 0% BB was penned into my contracts. That was the intent of setting a tight reserve agreed to by the house. If you're already setting up the coin to likely sell at "wholesale" levels, then getting hit with another 3-5% fee for spinning your wheels makes no sense to me. The higher reserves you set, which increases the odds the coin might not sell, the more likely the house will want some sort of a commission/BBF for any lots not selling.

You can get whatever you want into your contract if it works for you and the auction house. On one contract for 2 coins only totaling about $40K estimate, I had 0% BB, tight reserves, platinum night only, LB-summer ANA-FUN shows only, full page exposure on one lot - 1/4 page on the other. I also submitted the write ups for those lots which were pretty much followed, including detailed pedigrees. Auction contracts can be a negotiation....not a take it or leave it. Those 2 lots ended up bringing $83K, or much stronger than anticipated.

alefzero · February 25, 2017 6:22PM

Different auctions run buybacks/reserves differently. Don't know the specific case here, but those reserves are protection and not some racket. The consignor still has to pay a buyback ransom to get the coin returned. Suppose you have $1000 into a coin you have consigned and put a $750 reserve so you don't lose your shirt, limited to a 25% loss. You end up paying, say, 10% or $75 for the buyback, bringing it up to $1075 into the coin and still have to find a buyer. Is that better than losing $300 or $400 to a lower bid with no reserve? That's for the consignor to reason out. To the bidder, just bid what you are willing to buy it for; forget it is even an auction. If you get it, great. If you don't, it was priced higher than you were willing to pay. If it was the property of the auction house and they were manipulating things with no buyback skin in the game, then it would be a racket.

Some auctions, at least in the past, integrated the reserve into the bidding so the bidders couldn't know for certain if the other bid was just an automatic one from the consignor's reserve, another live bidder, or a mail/fax bid. My approach always was that the distinction never mattered. If I was pursuing the lot and had a maximum I was willing to pay for it, I bid it accordingly.

Lemoncadebay · February 25, 2017 6:38PM

Even if they ban bidding up your own items, they would still do it from another account. Back when I had a $500 eBay limit I'd get friends to place reserve bids for me. Like, if I wanted 1,300, I'd ask a friend to bid 1290. I didn't do it to cheat people out of money, but my seller restrictions forced me to do something to protect myself.

joebb21 · February 25, 2017 6:39PM

depending on whom you are determines the % you pay for a buyback.

RadioContestKing · February 25, 2017 6:42PM

Thanks Tom and Thanks Roadrunner for the explanation. I believe the hidden reserve is what happened in this case and at least I now understand the rules.......

I always try to do my Research on current prices for coins I am interested in and always try to stay within those limits. Thanks everyone.......

cameonut2011 · February 25, 2017 6:54PM

@Lemoncadebay said:
Even if they ban bidding up your own items, they would still do it from another account. Back when I had a $500 eBay limit I'd get friends to place reserve bids for me. Like, if I wanted 1,300, I'd ask a friend to bid 1290. I didn't do it to cheat people out of money, but my seller restrictions forced me to do something to protect myself.

Without disclosure in the terms of the auction or terms of use (as Heritage and the other auction houses do), shill bidding like this is blatant fraud.

7Jaguars · February 25, 2017 7:50PM

Hmm, stories like this support my contention that it is often difficult what a real sale is/was and how much actually for (as opposed to what is posted).

VanHalen · February 25, 2017 8:19PM

Over the years I've "lost" several coins on Heritage only to have them show up in their inventory at a later date. It's quite common for this type of thing to happen.

roadrunner · February 25, 2017 8:45PM

@joebb21 said:
depending on whom you are determines the % you pay for a buyback.

Exactly. Alefzero is incorrect stating everyone pays a BB fee to get their unsold coins back.

I never paid a BBF at major auctions, choosing instead to negotiate tighter reserves with a 0% BB written in to my contract. I still have a copy of those contracts too. I suspect that leading dealers who often supply coins to the auction houses to keep their auctions full, get 0% BB's too. I haven't consigned to a major auction since 2011. So maybe they do it differently now as major auction is becoming one of the last bastions to get decent prices for your "worthy" coins.

cameonut2011 · February 25, 2017 9:12PM

@alefzero said:
If it was the property of the auction house and they were manipulating things with no buyback skin in the game, then it would be a racket.

At least one of the major auction houses that engages in the practice DOES consign its own inventory to its auctions occasionally, so there is no way to know whether this is happening or not.

Elmhurst · February 25, 2017 9:21PM

Read the legalese at the front of the auction catalog. You will find that auction company can do anything they want, other than outright fraud.

wondercoin · February 25, 2017 9:53PM

I am informed and believe that upwards of 50% of the auction lots in some auctions are simply "house lots". I am not stating which company's auction(s), but am confident of the information. Hence, "sell through rates" can be meaningless it appears to me. It has been said here a million times... Work with a skilled dealer in your area of collecting and pay a small fee for the lots won and see much how better off you end up! Just my two cents. Wondercoin.

nwcoast · February 25, 2017 11:16PM

Some of you folks are making me feel like a real "chump" for selling my items in true auction form, with the assumed faith that an efficient market will dictate the final value and price realized.

I took an occasional bath on some items and wrote it up as just a sale gone south, and the risk of the true auction.

All of that has gone out the window upon reading this thread.
I can only see things getting worse from here.
Thanks for the splash of vinegar.

Greed trounces the efficiency of the true market.

nwcoast · February 25, 2017 11:25PM

But then again, I might just be a lousy businessman who has fallen behind the curve and had a clearly naive faith in business ethics.

BillJones · February 26, 2017 7:31AM

Some of what has been written here explains why I really prefer to avoid the auction route to acquire coins if I can. There are so many games behind the scenes that are not known to the bidders.

I have almost never gotten a bargain in an auction. Usually I feel lucky if I get what I view as a fair deal.

TwoSides2aCoin · February 26, 2017 7:38AM

Reads like an expensive way to keep what a guy doesn't want.

RadioContestKing · February 26, 2017 7:54AM

Well this now has me wondering, we always tell folks to not only go by the PCGS price guide but to look at Heritage Archives to see what current coins are selling for. Now if a consignor can bid on there own coins is it really a true auction?

Can PCGS really use those numbers to adjust there Guide? How many coins were run up by the consignor but were Never really sold? I guess the bottom line is I need to use Heritage when it comes time to sell my coins.

But I will no longer go by there Archives to see what a coin sold for recently as my experience has now proven those are more than likely not true auctions....if a consignor bids on his own coin AND wins than there should be NO sale posted but as I have now seen it shows the coin sold for 763 when in reality it did not......

Enjoy Tom

https://pcgs.com/SetRegistry/mysetregistry/set/78469

BillJones · February 26, 2017 8:00AM

Sometimes you just have a buy a coin at auction. It just doesn't show up at the shows, and of late the pickings have been really sparse at the bourse tables.

Doug Winter wrote an article about how a lot of the trading going on before the shows begin. Dealers buy up the best stuff for their want lists, and collectors, like me, never get to see the better material. There certainly seems to be a lot of truth in that. The retail market can't be totally filled with "dreck." You go to the shows and for some dealers all you see are the same "C quality" overpriced coins, show after show.

BIGAL2749 · February 26, 2017 8:30AM

@nwcoast said:
Some of you folks are making me feel like a real "chump" for selling my items in true auction form, with the assumed faith that an efficient market will dictate the final value and price realized.

I took an occasional bath on some items and wrote it up as just a sale gone south, and the risk of the true auction.

All of that has gone out the window upon reading this thread.
I can only see things getting worse from here.
Thanks for the splash of vinegar.

Greed trounces the efficiency of the true market.

Add me to your camp.

I felt I was doing well with my first auction consignment (125K) with the 105% hammer that they offered.
Put no reserves or ever talked about buy backs

Did alright save one $7K coin that sold for $4K

Someone suggested I talk to Mark Feld who even tough an employee of Heritage can give me a little more education on the whole auction system.

I want to believe in a true auction but I guess I want to believe in Santa

BIGAL2749 · February 26, 2017 8:38AM

Lest not forget that a 763.50 result was a 650 hammer price so only $650 (plus any negotiated deal) went to the seller.
If he has no discount on BB

@TwoSides2aCoin said:
Reads like an expensive way to keep what a guy doesn't want.

MFH · February 26, 2017 9:03AM

Interesting insights into the auction process .... Tommy: call the consigning dealer and
ask why he ended up getting his coin back ?

I'm not a newbie to the auction scene - but - the only time I can bid on my own things
is in person at the auction.... If it's an Internet only auction , I can't bid at all, unless I use
a dummy account ( which I do not have or have ever used ). To receive anything above
hammer price, I have had to agree to a No Reserve policy. If the coin has a reserve and doesn't
sell, I am obligated to pay the house their commission (less my pay back amount) . { Which
still equates to 12%}.

Tommy, good luck !!

RadioContestKing · February 26, 2017 9:43AM

Thanks Mike, Mitch suggested the same thing but I have sat here for the past 2 days wondering how do I ask him with out offending him? Should I say that I was the under bidder and wondering how the coin ended up back on your site?

This dealer knows I was interested in the coin and when we last talked he offered to pull the coin from heritage if I was interested. Of course I wanted to just bid on the coin and see where it went. So now if I send him a note trying to ask nicely how the coin ended up back on his site do you think he is going to be happy and reply?

I just think he is going to know that I was the under bidder and wondering why the coin is back on his site is really none of my business. At this point I just do not see any good from me asking him nicely how a coin he consigned is back on his site.....Will have to give this more thought today........Thanks everyone for the input.............Tom

MFH · February 26, 2017 9:48AM

Sending you a PM, Tommy....

roadrunner · February 26, 2017 9:53AM

@BIGAL2749 said:

Add me to your camp.

I felt I was doing well with my first auction consignment (125K) with the 105% hammer that they offered.
Put no reserves or ever talked about buy backs

Did alright save one $7K coin that sold for $4K

Someone suggested I talk to Mark Feld who even tough an employee of Heritage can give me a little more education on the whole auction system.

I want to believe in a true auction but I guess I want to believe in Santa

105% rate is not bad under the new 17.5% buyer's fee regime. That's a net 89.36% going to you. And congrats on not being one of those guys who think the "buyer" really pays the "buyer's fee." Getting 89-91% net is pretty typical for a $50K or better consignment. If you worked with Heritage, from my experiences they are tougher to get a higher rate out of than S/B. It's a trade-off to Heritage's increased audience vs. getting a higher net rate at S/B. It's also true that $125K in 100-200 items could be a ton of work for the auction house. If you had only 10-30 items I'd expect a considerably stronger rate. If your stuff was fresh and desirable like what Bill Jones looks for, then setting reserves or buy backs may not mean a thing. Those coins almost always do well in the market. In the end, it only matters how well your coins sold.

Maybe you could have pulled a 91% net rate (107% hammer) though on a $125K consignment we're talking $2K-$3K more, that could be easily frittered away in a poor venue or time of year. I'd rather have a prime venue at the 105% rate than a secondary or weaker venue at say 107%. That would be like putting your coins in the Jan FUN show vs. say a winter ANA show in Portland, Oregon. In the end, you just want the best results which means a lot of careful thought on which coast/city could be best, the importance of the attached show (if any), time of year, market strength, market liquidity, etc. Lots of factors to consider. And in the end, maybe not more than a "best guess." The auction house just wants to move the coins and get their cut. It's the consignor that has to say "woah"....slow it down.... let me figure out what's best for me. At my last Heritage sale I sacrificed a weaker net rate for optimum location, time of year, venue, and how/where the coins would appear in the Platinum night catalog. I also agreed to set very tight reserves which was also risky as I didn't want to see them sold for minimal money only to later be marked up by 20-30% in a dealer's inventory. In the end, that was the right choice for me as they fetched 2X total reserve prices in stiff competition and went directly to a long time collector. It still comes down to throwing the dice.

MFH · February 26, 2017 9:56AM

Roadrunner - you hit the nail on the head. The auction houses only care about one thing - bring in consignments -
sell them asap -make money and move on.

Coin Finder · February 26, 2017 11:32AM

The only bargains I ever got on coins at auction were mostly sub par coins . Maybe Heritage could weight in and help us understand their auctions better.

Heritage Auction. Lost on my Bid but Coin is now back in Dealers Inventory?

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