eBay consignor bids on his own items--how should a seller respond?
airplanenut
Posts: 22,404 ✭✭✭✭✭
Consider this scenario: After the close of an item on eBay, I checked the bid history and noticed that the second highest bidder was the consignor. As the second highest bidder, his bid directly influenced the final price of the item, raising it in the range of 15-25% over the closing price had the consignor not bid. The consignor had additional items, of which he bid on some, but was not the second highest bidder or winner on any of the others, so their prices were not affected by his bids. The consignor's claim is that he would have bought the item in question back at the price of his bid, and thus the bid was legitimate.
eBay's policies regarding shill bidding, begin by saying "Shill bidding happens when anyone—including family, friends, roommates, employees, or online connections—bids on an item with the intent to artificially increase its price or desirability." In addition, my terms of consignment state "The consignor agrees that all auctions will run their full course (unless an error is found in the listing) and the consignor will not bid, as this is against eBay policy and illegal in certain jurisdictions." eBay is not like other auction houses where the consignor is allowed to bid and buy an item back, and the bid of an item's owner is not equivalent to that of a third-party bidder as only the latter actually has to pay for the item; the former simply receives it back at no net cost (other than fees). In no way would I ever condone the bids of a consignor on his own items.
The consignor expressed dissatisfaction with the written descriptions of the coin (a details-graded piece), claiming that the description was the cause of the low selling price prompting his bid. Prior to selling the items, I discussed my thoughts on how to describe coins with damage: "My aim is to describe the items I sell in an honest and accurate way. Obviously if a coin is in a details holder, some amount of damage is known, and typically I'll simply mention it (pointing out the obvious) or if it's something I know won't show well in a photograph, provide a more detailed description so bidders know what they are getting. On the whole, I believe this helps, not hurts, prices. Buyers have a huge amount of power on eBay, and if I miss the mark on a description, something is liable to come back (where relisting usually results in a lower sale price), result in poor feedback, or result in low star ratings, which can cost me a lot of money (having high star ratings has allowed me to keep my consignment rates lower)"
I have sold hundreds (at least) of details-graded coins, and believe my descriptions are very consistent with what was written here; the number of consignors who continually send me such material would indicate a general high level of satisfaction with my work. I also note that the consignor never emailed me about the descriptions after seeing the listings, at which time they could have been taken down from eBay if there was such disagreement with what I wrote (it wouldn't be ideal, but certainly better than either removing details about the item and having a description that is in effect incomplete, or having this bidding scenario unfold). If minimum sale prices were a concern, I could have also listed with a minimum bid or reserve.
Now you get to put on your seller caps. In this situation, what do you do?
-Pretend it never happened. What the buyer doesn't know won't hurt him.
-Inform the buyer and offer a return based on this information.
-Inform the buyer and provide a refund to the close price had the consignor not bid. In this case, who pays, me or the consignor? The consignor violated the terms of the consignment, and I was unaware the terms were violated until after the auction ended. If it makes a difference, the bid was a snipe, so there would have been no way to react while the auction was live.
-Something else?
While I will not show the item here, it is my opinion that the quality (or lack thereof) of the description was not responsible for the final sale price, nor does it change the situation specifically at hand regarding the consignor's bid. The coin was described accurately in my opinion, and dealers with whom I've discussed this privately (who have seen the listing) have agreed.
eBay's policies regarding shill bidding, begin by saying "Shill bidding happens when anyone—including family, friends, roommates, employees, or online connections—bids on an item with the intent to artificially increase its price or desirability." In addition, my terms of consignment state "The consignor agrees that all auctions will run their full course (unless an error is found in the listing) and the consignor will not bid, as this is against eBay policy and illegal in certain jurisdictions." eBay is not like other auction houses where the consignor is allowed to bid and buy an item back, and the bid of an item's owner is not equivalent to that of a third-party bidder as only the latter actually has to pay for the item; the former simply receives it back at no net cost (other than fees). In no way would I ever condone the bids of a consignor on his own items.
The consignor expressed dissatisfaction with the written descriptions of the coin (a details-graded piece), claiming that the description was the cause of the low selling price prompting his bid. Prior to selling the items, I discussed my thoughts on how to describe coins with damage: "My aim is to describe the items I sell in an honest and accurate way. Obviously if a coin is in a details holder, some amount of damage is known, and typically I'll simply mention it (pointing out the obvious) or if it's something I know won't show well in a photograph, provide a more detailed description so bidders know what they are getting. On the whole, I believe this helps, not hurts, prices. Buyers have a huge amount of power on eBay, and if I miss the mark on a description, something is liable to come back (where relisting usually results in a lower sale price), result in poor feedback, or result in low star ratings, which can cost me a lot of money (having high star ratings has allowed me to keep my consignment rates lower)"
I have sold hundreds (at least) of details-graded coins, and believe my descriptions are very consistent with what was written here; the number of consignors who continually send me such material would indicate a general high level of satisfaction with my work. I also note that the consignor never emailed me about the descriptions after seeing the listings, at which time they could have been taken down from eBay if there was such disagreement with what I wrote (it wouldn't be ideal, but certainly better than either removing details about the item and having a description that is in effect incomplete, or having this bidding scenario unfold). If minimum sale prices were a concern, I could have also listed with a minimum bid or reserve.
Now you get to put on your seller caps. In this situation, what do you do?
-Pretend it never happened. What the buyer doesn't know won't hurt him.
-Inform the buyer and offer a return based on this information.
-Inform the buyer and provide a refund to the close price had the consignor not bid. In this case, who pays, me or the consignor? The consignor violated the terms of the consignment, and I was unaware the terms were violated until after the auction ended. If it makes a difference, the bid was a snipe, so there would have been no way to react while the auction was live.
-Something else?
While I will not show the item here, it is my opinion that the quality (or lack thereof) of the description was not responsible for the final sale price, nor does it change the situation specifically at hand regarding the consignor's bid. The coin was described accurately in my opinion, and dealers with whom I've discussed this privately (who have seen the listing) have agreed.
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0
Comments
<< <i>
-Inform the buyer and provide a refund to the close price had the consignor not bid. In this case, who pays, me or the consignor? The consignor violated the terms of the consignment, and I was unaware the terms were violated until after the auction ended. If it makes a difference, the bid was a snipe, so there would have been no way to react while the auction was live.
>>
Do this but don't do this explicitly . No good deed goes unpunished the buyer may neg you. Send the buyer a freebie , coupon etc. that makes him whole without his knowledge maybe.
Charge the consignor somehow , fire the idiot and out him. His actions have endangered your ebay account and your livelihood . People might think you are shilling if they decide something doesn't look right
We'll use our hands and hearts and if we must we'll use our heads.
<< <i>If he was willing to buy the coin back to protect his investment I can't see where he did anything wrong. The thing is you have to decide if was just shill bidding or being honest about buying it back. If he did it on several items I would be concerned I guess. >>
The thing he did wrong is he broke not only eBay's rules concerning shill bidding, but the terms of his consignment contract with the OP. It doesn't matter his motivation, he broke the rules.
The easy decision on your part is to never accept another consignment from this person again. The hard part is what to do about the shilled auction. Depending on the dollar amount, and considering it was only one coin affected, and as much as I would want to make it right with the winning bidder, I think I would just complete the sale. You could include a coupon or an offer of a future discount to the bidder, under the guise of a promotion rather than as an apology, to make yourself feel a little btter about the situation.
Sean Reynolds
"Keep in mind that most of what passes as numismatic information is no more than tested opinion at best, and marketing blather at worst. However, I try to choose my words carefully, since I know that you guys are always watching." - Joe O'Connor
<< <i>If he was willing to buy the coin back to protect his investment I can't see where he did anything wrong. The thing is you have to decide if was just shill bidding or being honest about buying it back. If he did it on several items I would be concerned I guess. >>
Unless you are personally prepared to pay the buyer the difference I would move on and likely not deal with the consignor again as he broke your terms of consignment.
Latin American Collection
Also, please PM me the buyer and his forum handle (if applicable) so I can block him on eBay and not deal with him on the BST.
<< <i>If he was willing to buy the coin back to protect his investment I can't see where he did anything wrong. The thing is you have to decide if was just shill bidding or being honest about buying it back. If he did it on several items I would be concerned I guess. >>
If he was honest about buying it back he would have said so and not left it up to airplanenut to discover the shilling activity. If he has consigned with you in the past you should look over some of the bidding on those items.
Needless to say, you should not deal with this individual again.
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<< <i>finalize your business relationship with the consignor and move on without him. >>
Yep. You can't police every auction and every consignor. If you find someone has broken your agreement, don't work with them again.
--Severian the Lame
Shilling is a pretty good way to make more money the downside is it can cost you your ebay account if you get caught. What would really be great is a way to shill freely with no risk.
Oh I have an idea , just consign the coins and then shill them secretly so that you get enough that the consignment fee is offset with no risk at all. If anything goes wrong it's someone else's seller account down in flames.
Cancel the sale
Report the shill bidder to eBay (that's what it is, no amount of weasel words gets past that - his/her bidding DID increase the ultimate price paid)
Return the item to the consigner and refuse to do business with him/her again
It's not always easy to do the correct (moral) thing, but you'll be a lot more comfortable with yourself and the small voice that talks to all of us in the dark hours around 3am because of it.
ANA 50 year/Life Member (now "Emeritus")
- Bob -
MPL's - Lincolns of Color
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BTW I think more actions are shilled than most people realize.
Did you have a contract with the consigner that he would not bid on his items or are just going by eBay's policy.
<< <i>Did you have a contract with the consigner that he would not bid on his items or are just going by eBay's policy.
>>
It is specifically stated in my terms of consignment: "The consignor agrees that all auctions will run their full course (unless an error is found in the listing) and the consignor will not bid, as this is against eBay policy and illegal in certain jurisdictions."
Buyer wants the item. If you cancel the auction, he will probably be angry at you and leave a neg. Just sell him
the coin and don't accept consignments from the seller any more. And don't lose any sleep over it.
Wondercoin
<< <i>finalize your business relationship with the consignor and move on without him. >>
THIS!!
In honor of the memory of Cpl. Michael E. Thompson
<< <i>Most state laws allow shilling when did eBay become a force of law.
BTW I think more actions are shilled than most people realize.
Did you have a contract with the consigner that he would not bid on his items or are just going by eBay's policy.
So how and when can eBay policy trump state or local laws?
<< <i>You point out ebay's policy on shill bidding, but his statement that he would have purchased the coin back at his bid does not fit the definition of shill bidding "to artificially increase its price or desirability". If this is the only bidding prohibition ebay has for someone with a financial relationship to the item, then he did not break ebay's rules. As such, it seems that your contract language is at least partially built upon a faulty reading of ebay policies. >>
I agree, I dont think the consignor violated ebay policies. He did violate your consignment agreement, but the reason you state for that policy isnt really right. Whether you keep your policy(rephrased or not) or get decide to get rid of your limitation, I think the consignor doing this on multiple lots without informing you is reason enough to not do further business with him. As to refunding the buyer, I would think yes. I dont know the ins and outs of ebay, but I think I would tell him there were problems with his auction, cancel if possible, and offer him a BIN at what you think the price should be.
Mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>You point out ebay's policy on shill bidding, but his statement that he would have purchased the coin back at his bid does not fit the definition of shill bidding "to artificially increase its price or desirability". If this is the only bidding prohibition ebay has for someone with a financial relationship to the item, then he did not break ebay's rules. As such, it seems that your contract language is at least partially built upon a faulty reading of ebay policies. >>
That's still shill bidding, the way I understand it. So you can bid on your own consigned stuff, as long as you "intend" to pay for it? Then if you mess up and "win" your own item, that's just the cost (ebay fees and commission) of doing your shilling. No bueno.
<< <i>
<< <i>finalize your business relationship with the consignor and move on without him. >>
Yep. You can't police every auction and every consignor. If you find someone has broken your agreement, don't work with them again. >>
On second thought, this is probably the best option. Doing what I (and others) suggested would open up a can of worms that Jeremy did not sign up for. Just settle, move on, and don't work with the consignor again.
<< <i>You point out ebay's policy on shill bidding, but his statement that he would have purchased the coin back at his bid does not fit the definition of shill bidding "to artificially increase its price or desirability". If this is the only bidding prohibition ebay has for someone with a financial relationship to the item, then he did not break ebay's rules. As such, it seems that your contract language is at least partially built upon a faulty reading of ebay policies. >>
I'm not sure I fully agree. Let's consider a hypothetical item which the seller values at $500. Let's assume there are two third party bidders, on valuing the coin at $400 and the other $500. The eBay system is built such that the value of an item is the greater of the minimum bid or one bid increment above the second highest bid. If the seller places a minimum bid of $500, the second bidder wins at $500 knowing no other buyer value the item at that price, but knowing the seller does. If the seller has no minimum bid, the item sells at $405, on increment above the lower bidder's maximum. The buyer knows he values the item the highest, but another bidder has confirmed there is a market around the final selling price. Now, consider a scenario where the seller places a bid of $499. The coin sells for $500 and indicates there are multiple bidders valuing the item at that level, but in reality there is only one. If the second bidder had instead bid $498, the consignor would have won, and other than fees would have paid nothing., but given the appearance that the coin was worth $499. That's the difference. With a minimum bid, there is transparency as to who is setting the value. If a consignor bids, there is an appearance of a market price, but there isn't one because the consignor has no financial outlay if he wins. That makes the price increase artificially.
Now, let's assume you don't buy that rationale. Does it change the terms of my consignment where bidding is explicitly forbidden? If one doesn't agree with the reasoning (which arguably isn't required, but is provided as background information) or wording of the terms, wouldn't the proper response be to either not do business, clarify the terms, or seek to make alternate terms that are agreeable to both sides? Simply not following them seems inexcusable to me.
My Ebay Store
Then, folks here suggested that eBay's policy says it's ok for the owner to bid, so long as his intent is not to inflate the selling price.
So, I took the time to take eBay's tutorial on shill bidding. The tutorial makes it perfectly clear with examples exactly analogous to this one that: (1) It doesn't matter if high bidder bid more than the owner, so was "willing to pay that amount." The owner's bid, according to eBay, "disrupts the bidding process" and is not allowed. Period. (2) If the owner has a price below which he/she doesn't want to sell the item, there are 3 and only 3 options: reserve price, BIN, or starting bid amount.
I am a teacher, and must deal, sometimes, with cheating. Often, the excuse is something like the owner's: It wasn't cheating, since it didn't affect the outcome. My answer is, "If it wasn't cheating, are you willing to stand up in front of your classmates and say what you did?" So far, no one has chosen that option. Because, at the end of the day, I think our hearts know the answer, no matter how much our brains look for loopholes.
If I were the buyer, I would have great respect and appreciation for a seller who came clean about this and offered to make it right. I know there is a risk to the seller, since not every buyer might feel that way. But I also know it is the ethical thing to do. The seller could stand up in front of the class with pride.
The buyer should get a refund from the consignor in the amount of the difference in the shill bid and the highest bidder. Failing that, the sale should be canceled.
Ethics can conflict with monetary profits sometimes, but I guess that's why ethics are a separate concept.
I believe I will be contacting the Jeffrey Fieger Law Firm . Someone will be paying for my pain and
suffering.
<< <i>This....... is horrifying. I am surely going to need therapy for several years.
I believe I will be contacting the Jeffrey Fieger Law Firm . Someone will be paying for my pain and
suffering.
Ah you must be a Detroit boy! Geoffrey Fieger of course represented Jack Kevorkian. He is also the older brother of Doug Fieger, the lead singer of The Knack. (My Sharona).
As far as OP is concerned I smell the classic idiom of, " no good deed goes unpunished" in the offing.
Mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>as a seller, whom do you value more. your consignor or the buyer ? which is paying you a commission ? >>
I value ethics and honesty. If making money means acting in a way I wouldn't be proud to make public, I would need to find a different line of work. I have zero desire to sell my integrity or reputation.
<< <i>Most state laws allow shilling when did eBay become a force of law.
BTW I think more actions are shilled than most people realize.
Did you have a contract with the consigner that he would not bid on his items or are just going by eBay's policy.
<< <i>Buyer wants the item. If you cancel the auction, he will probably be angry at you and leave a neg. Just sell him
the coin and don't accept consignments from the seller any more. And don't lose any sleep over it. >>
<< <i>You point out ebay's policy on shill bidding, but his statement that he would have purchased the coin back at his bid does not fit the definition of shill bidding "to artificially increase its price or desirability". If this is the only bidding prohibition ebay has for someone with a financial relationship to the item, then he did not break ebay's rules. As such, it seems that your contract language is at least partially built upon a faulty reading of ebay policies. >>
All three of these logical responses address the situation, IMO, and I really see no reason why this scenario was even posted in the first place.
At what point do you allow other folks to dictate to you how you run your business or "What you should do"?
If this were my business and I really felt that the consignor violated my "Terms of Consignment", then I would simply complete the consignment, return all unsold coins and notify the consignor that I will no longer accept consignments from them and why.
I would NOT bring my problems to a coin forum for advice because I know full well that the members of the forum would do their very best to find out exactly who this individual was and then proceed to brow beat them with their own forms of ethical justice!
The name is LEE!
<< <i>
<< <i>Most state laws allow shilling when did eBay become a force of law.
BTW I think more actions are shilled than most people realize.
Did you have a contract with the consigner that he would not bid on his items or are just going by eBay's policy.
So how and when can eBay policy trump state or local laws? >>
It doesn't.
eBay's "shill" policy is designed to protect eBay, as a viable auction venue, from the shadowy world of anonymous electronic bidders.
Is their an eBay policy which requires sellers that take consignments to notify eBay who their consignors are and whther or not they have eBay accounts? If not, then eBay would never know who actually owned the coins being sold and as such would never involve jkcoins in any actions regarding his consignor bidding on his own coins.
The name is LEE!
<< <i>Continue selling his coins for him but block him from bidding on them.
As silly as it may sound, this is probably a very good action for Jeremy to take for any future consignments provided he put it into his "Terms of Consignment".
If the consignor has an ebay account then block them until the item(s) sell, then unblock them.
The name is LEE!
BTW I bought 3 raw gold from your last auction and the pieces are amazing and it isn't the first time.
That said, If you do go with option C, "Inform the buyer and provide a refund to the close price had the consignor not bid"...yes, the consignor eats it. He breached the consignment terms (and ebay policy) by shilling his own item. It's YOUR reputation that is potentially at risk here, not his. IF I were to go that route, I'd pull the refund from his proceeds, send him the rest and decline to do further business with him. Keep copious records of everything, to include multiple screenshots showing that he was the underbidder who ran the price up.
JMHO
RIP Mom- 1932-2012
I easily could've bid it up, to either buy it back myself, or artificially raise the price.
However, my moral compass lit up, and told me that this was tantamount to shill bidding, and I declined to bid, losing my shirt (and pants) in the process.
As far as your consigner, pay him and tell him to not come back. Sounds like he was a pita anyway.
Do you have signed contracts with the consigners or just a long disclaimer that no one reads?
I make my living off of rent property, I have changed my rental forms to where I have them sign off on a few different points. I go over three key areas of concern and the have to sign each one. Eliminated a few headaches for me by making the renter fully on notice of a couple of items.
While you caught this one it is not hard to shill if that is your goal.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
I remember a large gold seller who always did Sunday evening eBay auctions. (he is since banished)
He auctioned an AU58 1854-D $3 Gold with a 99 cent starting bid. It got up over $50,000.
A few weeks later, it was back.
Naively, I thought "gutsy." In reality, no risk.
<< <i>
<< <i>Did you have a contract with the consigner that he would not bid on his items or are just going by eBay's policy.
>>
It is specifically stated in my terms of consignment: "The consignor agrees that all auctions will run their full course (unless an error is found in the listing) and the consignor will not bid, as this is against eBay policy and illegal in certain jurisdictions." >>
I didn't see this before. The guy screwed up. Was he aware of this?
We'll use our hands and hearts and if we must we'll use our heads.
Do you really think a consignor would ignore those terms too ?
"Everything is on its way to somewhere. Everything." - George Malley, Phenomenon
http://www.american-legacy-coins.com