An Insider’s View of Auctions
What An Auction Consumer Should Be Aware Of
Auctioneer Tricks Let’s say an oil painting drops to $300.00 and several hands shoot up. The correct procedure is for the auctioneer to acknowledge the first bidder he sees or, if he sees several at once, to just pick one and carry on from there. But here’s the trick… A slick and slippery auctioneer will see three hands go up at once (each intending to bid $300.00), and he’ll point quickly to each, “$300.00, now $325.00, now $350.00″ There are two things wrong with this: First, none of those bidders offered a bid any higher than $300.00. Second, those two bids above $300.00 were “phantom bids” to the tune of $50.00. That’s illegal. It’s an offense reportable to the state licensing board.
So why would bidders allow an auctioneer to assign them higher phantom bids that they didn’t make? The auction is so fast-paced and adrenaline-charged that the auctioneer’s sleight-of-hand may not immediately register. They also probably defer to the auctioneer’s authority thinking, “Well, I had my hand in the air.” And most people do not know this little secret: By law, a bidder may retract his or her bid at any time before the auctioneer says “SOLD!”
[ Uniform Commercial Code §2-328(3) ]
At a live auction this means interrupting the auctioneer and bringing the sale to a temporary halt, which is another reason bidders let auctioneers get away with such antics.
Shill Bids As most people know, shill bidding is a scam whereby the auctioneer has one or more cronies pose as bidders to run up the final auction price. At live auctions, shill bidding is so transparent and risky as to be downright stupid. At a live auction you can watch for phantom bids and shill bids by standing in the back of the the crowd and observing both the auctioneer and the bidders simultaneously.
Reserve or Absolute? Per the Uniform Commercial Code [ §2-328(3) ], all auctions are deemed to be with reserve unless stated otherwise. If the advertising doesn’t specify “absolute,” then it’s automatically a reserve auction. This doesn’t necessarily mean that every item will have a minimum price. Most items probably will be sold absolute, even at a reserve price auction. It just means the auctioneer, acting on behalf of the seller, retains the right of refusal.
Buyer Beware As soon as you win something at auction, the staff will immediately hand it over to you. As the auction progresses, piles of merchandise will begin to accumulate around each buyer. Why don’t they just mark these items with your bidder number (like they do with large items) and hold them until you’re ready to leave? Under the arcana of auction law, the sale is consummated when the auctioneer says “SOLD!”, not when you check out and pay. Therefore, the risk of theft or damage immediately passes to you…unless the auction company volunteers to safeguard your purchases. And this is why your auction winnings get dropped in your lap forthwith.
