I’m an experienced online coin buyer, blogger, and numismatist, and even I get caught on occasion when auctions do not mention flat bids in their terms of service, which I always read.
In an April 23 session on HiBid.com, there was no mention whatsoever that an online catalog was programmed to take flat bids—an amount that serves as both the opening and maximum bid all in one.
Case in point: If you state $100 for a coin lot, that becomes the starting bid. You will win that coin for that amount if no one else bids. In an online session that closes before the live onsite session, the auctioneer opens with your flat bid, and if no one bids higher, that coin is yours.
Of course, you might have won that coin with a $70 bid or even a $10 one. You’ll never know.
The issue with flat bids occurs when you think you are placing a maximum bid that will increase in small increments as the auction progresses and other buyers bid on your lots. In this case, because nothing was said about flat bidding in the terms of service, I assumed that my $100 would start at $1 and gradually work up to my maximum.
I bid on four lots and then saw that my maximums were matched immediately. I thought the auctioneer was shill bidding.
I emailed the auctioneer, stating, “Are you seeing maximum bids and allowing auctioneer/consignor bidding? All my bids were matched but not surpassed.” I added that regulations require posting of any shill bidding. I specifically mentioned the Uniform Commercial Code covering this illegal activity, which we discussed in my post last month titled “A Closer Look at the Law That Allows Shill Bidding.”
“I have no idea what you’re talking about,” the auctioneer replied.
I mentioned that he must be seeing my bids because as soon as I placed them, he was matching them.
The auctioneer had a little time to think about what I was alleging and then wrote: “We started the flat bid about 2 months ago, perhaps I need to update our terms.”
I asked him to deduct $25 from each of my bids, but he couldn’t do that. He said he liked flat bids because his auctions are large and this speeds up the process on his end.
Since those pieces I have identified a few reputable auctioneers on HiBid, but many listed in the coins-and-currency category are not worth the effort because they do not ship, they ship through third parties (which you have to contact), or they take inferior photos of only the obverse.
On average, though, HiBid has lower buyer premiums, so it is worth checking out and identifying favorite sellers.
I still prefer Proxibid, though, because there I could have challenged what this auctioneer did to me with flat bids. I would have had no problem if he’d mentioned flat bidding in the terms of service. I would have known then how to bid.
I am also increasingly wary about raw coins in online auctions and have been bidding more on coins slabbed by reputable companies, such as PCGS, NGC, ANACS, and ICG. I also look for GSA dollars and Redfield/Paramount Morgans and Peace dollars.
Luckily for me, the coins that I won with those flat bids were Redfield Morgan dollars in good cases (1879-S, 1880-S, and 1881-S). The 1880-S is toned and the 1881-S may grade MS65+, so I might get my money back. But the only way to do that now is to send them to NGC and hope for those grades.
(I prefer NGC with Redfield/Paramount dollars because they do not crack open the original holder and use bands for labels.)
Have you ever encountered flat bids or some other practice not specifically mentioned in the service terms? What have been your recent online coin bidding experiences?
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