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An auction participant recently commented:

    “I am somewhat new to the auction scene and was wondering if it is standard procedure for workers at an auction to bid on items that they are auctioning and win them for themselves. Along with this workers are hiding more valuable items they are interested in with junk lots. They also will hold items they want until the very end when most of the crowd has left and they win the items for themselves more easily. Please let me know if it is just me that seems to have issue with this practice.”

I will take this question in three parts:

  1. Is it standard procedure (is it okay) for workers at an auction to bid on items?
  2. Is it okay for those workers to be hiding more valuable items in the junk lots?
  3. Is it okay for those workers to hold items they want until the very end?
  1. Is it standard procedure (is it okay) for workers at an auction to bid on items? Auctioneers tend to disagree about this, as some think the workers bidding drives buyers away, and other auctioneers believe by the workers bidding, prices are enhanced.

    The fiduciary responsibility of the auctioneer is owed to the client, so first of all, this should be discussed with the seller prior to the auction. Secondly, making sure the bidders are fully aware of the right of the workers to bid is paramount as well. Lastly, any workers bidding should be genuine in intent — not done to just increase prices, or run other bidders. If the workers genuinely desire an item in the auction, I suggest allowing them bid on it.
  2. Is it okay for those workers to be hiding more valuable items in the junk lots? This is totally unacceptable. “Hiding” implies this is done to conceal the item from others, which would automatically put downward pressure on prices. Here again, the fiduciary responsibility of the auctioneer is owed to the client, so anything that is done to depress prices would be counter to the auctioneer’s duty.
  3. Is it okay for those workers to hold items they want until the very end? This is also totally unacceptable. “Holding items until the end,” when most other bidders have left would also put automatic downward pressure on prices. In this case as well, the fiduciary responsibility of the auctioneer is owed to the client, so anything that is done to depress prices would be counter to the auctioneer’s duty.

We discussed here What do auctioneers owe their clients and those duties include: Obedience, Loyalty, Disclosure, Confidentiality, Accountability and Reasonable Care. Certainly, workers bidding without the genuine intent to purchase, hiding items in junk lots, nor holding items for the very end of the auction satisfy the duties owed the client.

Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. His Facebook page is: www.facebook.com/mbauctioneer. He is Executive Director of The Ohio Auction School.