, , , , , , , , , , , , , ,

Natalie collects vintage street signs.

In fact, she has over 200 in her collection and they are all on display in her home, barn and garage.

Natalie began her interest in street signs at age six.

Her father worked for the city department in charge of street signs, and brought home obsolete or otherwise unusable signs.

Natalie continues to search for vintage street signs at auctions, garage sales, and otherwise. However, for purposes of our story today, Natalie could just as well collect anything …

As Natalie is searching auctions for street signs, she finds that Dubast Auction Company in Nebraska is hosting an auction with several such items. The auction has over 200 lots including traffic signals, gas pumps, street signs and the like.

The auction is being conducted live, with online bidding provided through Youragentbid (www.youragentbid.com) — and that’s seemingly good for Natalie, as she lives over 800 miles from the Dubast auction facility.

Natalie goes to Dubast’s website, and clicks on the “Bid here online” button. She is redirected to Youragentbid’s website, where she is asked to confirm the terms and conditions of Dubast’s auction. There she sees the following:

    Please note: This auction company permits the auctioneer, seller or anyone else to bid against you even if those bids are made solely for the purpose of increasing the bid (and not for the genuine intent to purchase.)
    To facilitate such disingenuous bidding, your maximum pre-bid is disclosed to the auctioneer so he (or she) can bid up to one bid less than yours to ensure you pay the maximum amount you leave as an absentee bid.

Natalie is surprised by this disclosure; she has been a bidder at 1000’s of auctions, and has never seen such a blatant admission of this type of policy.

Why would Natalie leave any maximum pre-bids with Youragentbid? It would be difficult to find a reason in her favor. It seems clear if she is willing to “pay as much as $500” for a sign, she’s going to pay $500 for it.

Despite there being nearly two dozen signs that interest her at Dubast’s auction, she decides to look elsewhere for signs. The detriment for Dubast’s seller(s)? She was prepared to spend in total over $6,000 on these signs — where now she will spend nothing at all.

Is Dubast Auction Company’s and/or Youragentbid’s policy illegal? It is not. The UCC 2-328 as adopted essentially permits the seller in a “with reserve” auction to bid as a form of reserve and/or withdrawal. The only penalties outlined in the UCC 2-328 regard this type of bidding without disclosure.

Our observation here doesn’t involve the legal or illegal status, as that is well established law. Rather, we note the severe disservice and harm this type of policy inflicts upon a seller.

Telling a bidder, “We’re going to take your absentee bid to the maximum you leave,” essentially says, “Don’t bid at our auction.” Almost assuredly, any gain by increasing the bids with such an adhesionary policy will be outweighed by a lack of bidder participation, and lower prices.

And the even more surprising fact about this policy is … Youragentbid could easily keep the maximum pre-bids confidential and have their software execute those bids in a truly competitive, auction-like, manner … but decided against that.

For auctioneers and online auction providers, such as Youragentbid, it’s important to see the forest and the trees. You see, for Natalie, it’s as simple as looking elsewhere for street signs.

* The above account including company names, events, etc. are purely fictional. This scenario has been created solely for educational purposes.

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 serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School.