Scams and other complications have caused some of my favorite HiBid coin auctioneers to ban certain bidders or require bank transfers to ensure payment.
Here’s an example from Stagecoach Auctions:
You’ll notice in the “bidding notice” at the bottom of the photo above is that the auction is not accepting new bidders from outside the United States.
Sheena Wallace of Stagecoach Auctions says laws for shipping coins, silver and gold, to other countries are changing at a rapid pace. “Many countries will no longer allow you to ship coins into the country. Additionally, you may not be able to prove delivery or utilize a signed delivery system.”
Scammers rely on sellers not being able to prove that merchandise has been delivered. Then, they execute a charge-back. When it comes to gold, that can cost an auction company thousands of dollars.
“Not only that,” Wallace says, “but Canadians tend to view time differently. Meaning, if you need to contact a buyer for any reason, it may take days or weeks to get a response. I do not have that kind of time. Taking over two weeks to return a call to make payment is not in our business model.”
Temchack Auctions has a generous business model with no buyer’s fees. That makes it a special venue for hobbyists seeking high-value coins and bullion. For instance, a one-ounce gold bar sells here for $2,000. That same lot would cost $2,300 at an auction charging a 15% buyer’s fee, and as much as $2,400 at one with a 20% fee.
As a result, Jay Temchack has encountered problems not only with Canadian buyers but also with ones from California and Minnesota.
“California is where I have the most buyers whose credit card address and shipping address don’t match,” Temchack says. “They try to pay with cash apps and then do a reverse withdrawal a few days later. Many also register at the start of or during the auction with stolen credit cards and place bids on the gold coins.”
Minnesota is one of a handful of states that require remote sellers to file sales tax paperwork. Visit the state site to see how complicated this gets. Here’s an excerpt:
A retailer not maintaining a place of business in this state and a marketplace provider not maintaining a place of business in this state shall:
(1) begin collecting and remitting sales and use taxes to the commissioner on the first day of a calendar month occurring no later than 60 days after the retailer or marketplace provider engages in regular or systematic soliciting of sales from potential customers in this state; and
(2) continue to collect and remit sales and use taxes to the commissioner until at least the last day of the 12th calendar month following the calendar month in which the retailer or marketplace provider began collecting and remitting sales and use taxes under clause (1).
(e) A retailer not maintaining a place of business in this state and a marketplace provider not maintaining a place of business in this state may cease collecting and remitting sales and use taxes to the commissioner after the period in paragraph (d), clause (2), if the retailer or marketplace provider no longer engages in regular or systematic soliciting of sales from potential customers in this state.
Temchack says, “I don’t want to get a sales tax number and have to collect and file more paperwork. I sell to a business, friend, or family member close to the border.”
He also has encountered the difficulties of selling to Canadians. “It takes time to fill out the customs forms, take the package to the post office and get the cost of the shipping, finish packing it, and then add it all to the invoice for payment.” He tries to take a picture of the package at the post office and emails it to the customer, so they know it was shipped.
He also has a workaround for buyers in Canada. “I will ship to a U.S. address, and they will pick up the package from a business, friend, or family member.”
Nevertheless, scams continue to plague the online auction business.
Jessica Janes, Bauer Auction Service, says, “Unfortunately, in my experience, problematic bidders are not limited to California or Canada. We have had ‘local’ bidder accounts attempt chargebacks and use false credit card information almost as frequently as we have had from addresses farther away.”
“We have increased our registration requirements through the HiBid platform and spend time manually reviewing bidder accounts. We spend more time communicating with account holders prior to their participation being approved. This is a very time-consuming process and has not eliminated the fraud cases completely but has cut down on them.”
In the end, our hobbyist dollars are at stake here. We have to support auctions by sellers mentioned here or ones that you have found reliant and professional. In addition, we have to read the terms of service and make sure that our payments are valid and on time. Otherwise, we will have to pay retail prices rather than auction ones that are, on average, lower than prices at coin shops or “buy it now” options on eBay.