In the first two installments we covered some basics of buying and selling at auctions. I now must touch on some of the tricks and scams pulled at auctions.
- House Numbers – Before you bid, look around. Some auction houses use what are called ‘house’ numbers. These are numbers the auction house has reserved to use to bump up the bidding. If you hear the same bidder number winning over and over, and you cannot associate it with a real person holding that number, the house may be bumping the bids and got stuck with the item.
- “PFA” (Pluck from air) or “OTW” (Off the wall) – These are both terms for the same thing. Some auctioneers will make up bids that do not actually exist in order to raise the selling price. Be observant and look where the auctioneer is looking when he is taking a bid from the audience. If you repeatedly fail to see a live person bidding, you may be witnessing this trick.
- Left bids (or Commission bids) – A true left bid gives buyers the opportunity to leave a list of items they wish to bid on and the maximum they are willing to pay. The auctioneer will bid for them as if they were there. The ethical method of doing this is for the auctioneer to open with a reasonable bid using the left bid if necessary. They should NOT open the bidding using the maximum bid left by the bidder. If you leave bids for items when you cannot attend, and they seem to always be close to, or at, the amount of your maximum bid, you are not being treated honestly. If you are outbid by a left bid, an honest auction house should allow you to see that it is a legitimate left bid. If they won’t, I’d suspect they were bumping the bid, got stuck with it, and they don’t want you to catch them.
- Shills (or Plants) – A common trick that some auction houses play is to put someone in the audience to bump the bids. This can be an employee or some even allow the consignor (the one who put the item in the auction) to bid on their own items. This is both unethical, and in some places illegal, but is widespread.
- False reserve – A reserve (the lowest price that an item can be sold for) is an honest procedure in auction. However, some auction houses use it to not sell an item if they aren’t getting enough for it. A good auction house will Annice that there is a reserve on an item before the bidding begins, not use it as an excuse not to sell an item when it doesn’t bring what they want. It is fine for the auctioneer to not sell an item if he/she feels it is going too cheaply (unless the auction is advertised as an ‘absolute’ auction, but it is not okay to use the ‘failed to meet reserve’ as an excuse.
These are but a few of the ways unscrupulous auction houses operate. If you attend a couple of auctions before you buy, you’ll be able to see if the auction is honest or is trying to pull something.