How to Recognize Shill Bidding on eBay Jan 13, 2016 23:03:36 GMT -6 smpratte, Reina Sierpe, and 18 more like this
Post by fourthstartcg on Jan 13, 2016 23:03:36 GMT -6
HOW TO RECOGNIZE EBAY SHILL BIDDINGUnfortunately shill bidding on eBay has become a fairly common practice in the Pokemon card hobby. I've made this guide explaining both the issues with shill bidding, and how to recognize it so you don't get caught paying more for a card than you should. A quick reminder that unscrupulous activities (including shill bidding) are not condoned by this forum and members who engage in these activities will be disciplined accordingly.
WHAT IS SHILL BIDDING?
Shill bidding is very simple. A seller posts an item for auction and then bids on that item themselves in order to raise the auction price higher. Ideally, the shill bidder bids the auction up to a price that they are comfortable selling for, and then waits to see if anyone bids over that price. The auction-style listing generates a high level of interest and attention from bidders, and shill bidding guarantees that a seller doesn't get burned by a low ending price. If the item goes for less than the seller wants (the shill bidding account wins) then the seller simply keeps the item to possibly relist at a later time.
WHY SHILL BIDDING IS BAD:
#1: Shill bidding creates artificially-inflated prices.
In a hobby where eBay sold listings are the most accessible and often best way of determining a card's value, listings that have been shill bid artificially skew the prices of cards higher. For example, let's take a fairly rare (yet usually available) card like a PSA 10 Charizard Gold Star (English). The generally accepted auction price range for that card is currently around $700-800 USD. If a shill bidder posts one up for auction and the auction goes for $1,300 USD, people would think that the card's value has somehow dramatically increased. Seeing that sold listing, people may pay more for PSA 10 Charizard Gold Stars than they should. Which leads to my second point:
#2: Shill bidding creates "price bubbles."
If shill bidding occurs (especially on multiple copies of a single card) people may believe the card is suddenly worth more when it's really not. As such, they will pay more. However, the card's true market value is lower. If they go to sell the item in the future, they will lose significant money as they overpaid for the card to begin with. As many collectors view Pokemon cards as an investment, this is problematic.
#3: Shill bidding goes against the spirit of an auction and is against eBay policy.
The spirit of an auction is that the item goes to the highest bidder. Shill bidding ruins this, makes it harder to find at-auction deals, and rigs the system in favor of the seller. Not to mention that shill bidding is not allowed on eBay and is grounds for suspension or removal of your eBay account.
HOW TO RECOGNIZE SHILL BIDDING:
eBay bidding histories are visible to all. If you are ever suspect of an auction's legitimacy, you can check the bid history (accessible directly from the auction page). Shill bidding accounts often have these three characteristics:
#1: Very low feedback numbers (not required, but common).
As shill bidding accounts are created by the seller simply to place bids on their own auctions, they usually have low feedback numbers (0-10). Feedback numbers are also publicly displayed in the bid history of an auction.
#2: High percentage bid activity with one Seller.
Clicking on an individual bidder from the bid history will bring you to a summary of the member's bidding activity over the past 30 days. At the top, there is one important metric, titled "Bid activity with this seller." If that number is in the 90-100% range, chances are it's a shill bidding account.
#3: Bidding on many (if not all) the seller's auctions.
If a seller has multiple auctions up, check for the same account bidding on many of the auctions. While it's not uncommon for people to bid on several items from one seller, shill bidding accounts often bid on anything and everything from a specific seller. Use your judgement and common sense in this case. One person bidding on 3 items from one seller probably shouldn't raise red flags, but if they're bidding on 20 different items, you should be suspicious.
Of course these are just general guidelines. Shill bidders aren't stupid, so they may get accounts with high feedback numbers to bid on their auctions, or only run one or two auctions at a time and shill bid them, so it's less obvious. The best metric of shill bidding is the percentage bid activity with the specific seller. The higher that is, the more likely it's a shill bidding account.
Keep in mind that people who shill bid aren't inherently terrible human beings that want to cheat you out of your money! More likely than not they just want their cards to sell for a price that they want, and are looking to get more out of their auctions. However shill bidding is not the answer to this issue.