In the world of online auctions sites, shill bidding has become a popular practice but is a nuisance to those wanting to make an honest transaction.
Shill bidders attempt to increase the value of an auction for the seller; identifying a shill bidder takes some work. Dishonest bidders may be friends or family members of the seller, or the account may be owned and monitored by the seller. Watching bids and monitoring who the bidders are in an auction is a good way to spot possible shill bidders while in the process of bidding competitions.
There are a few things to look for when investigating a possible shill bidding situation on eBay. First the bidder must check the suspect’s account. Often times the shill bidder will have very little feedback and the account is usually fairly new. If any feedback on the suspected shill bidder’s account is from the seller offering the desired item, it is very likely that this is a shill bid situation. Sometimes a shill bidder may have even been the winning high bidder.
After this, the seller will immediately re-list the item. Another way to identify a shill bidder is to view the seller’s other items. Usually the shill bidder will be bidding on multiple items from the same seller, not just one.
Bidders who realize they have fallen victim should immediately stop bidding on the desired item and report their findings to the auction site if shill bidding is suspected. If the bidder has already placed the highest bid, it is possible to retract the bid and report the incident to the auction site.
Retractions should always accompany a formal complaint because any retraction, honest or not will count against a bidder’s account.
One of the best solutions to avoid shill bidding completely is to simply watch the desired item. Bidding on an item just a few minutes before its closing time is the best way to avoid competing with shill bidders; this takes away their time of opportunity to increase value. Bidders may also place their highest maximum bid seconds before the auction’s close to avoid spending more than originally planned.
Shill bidding also has a new reversed complexity on auction sites for sellers. Some shill bidders will often work as a team for an unsuspecting seller’s valuable item listed below its actual value. One person in the team will place a higher initial bid while the others bid to raise the price and the number of bids made to make it appear legitimate.
Toward the end of the auction the highest bidder will retract the bid and the seller’s item will wind up being bought for a price far below its actual worth by a team member.
Shill bidders who use eBay especially for house auctions will often retract high bids shortly before the auction’s end. Watching for very high first bids is important for sellers to spot shill bidding teams.
Sellers should report suspected shill bidding teams for investigation immediately if this is suspected.