How eBay Sellers Fix Auctions 556
Boj writes "The Times online is carrying stories on fraud carried out on eBay using shill bidding. Citing eBay's changes to security as aiding the shill bidders and this fraud:
"Last November eBay changed its rules to conceal bidders' identity — making it even more difficult for customers to see whether sellers are bidding on their own lots.""
Ebay - Where there is a sucker born every minute. (Score:5, Insightful)
Go to ebay and do a search on 'wholesale list'. You will find people attepting to deceive the buyers, I'll even say that much of this is fraud.
I would bet that among the 'power sellers' (and others) there were organized 'teams' of people that artifically jack up the prices for profit.
Now, if ebay KNEW about these practices and did nothing to stop them, could they be found liable?
I have been a victim of Ebay fraud, complained and heard nothing back. I sucks, but I now expect that from both ebay and paypal.
"Last November eBay changed its rules to conceal bidders' identity making it even more difficult for customers to see whether sellers are bidding on their own lots."
What this also does is it keeps people that wish to help fix the problem from doing so. IE, I see an obvious fraud attempt on EBAY and try to contact the people that are about to be screwed. I can't do it.
Circumvention (Score:5, Insightful)
Re:Ebay - Where there is a sucker born every minut (Score:5, Insightful)
Personally, I avoid eBay like a plague. it's got sucker written all over it.
Tom
eBay welcomes the shill. (Score:4, Insightful)
Re:Ebay - Where there is a sucker born every minut (Score:2, Insightful)
Yes, everyone run around and complain as much as you want, this isn't going to change.
Whatever, I never trusted auction sites anyway.
Re:Ebay - Where there is a sucker born every minut (Score:5, Insightful)
Just remember Ebay is a flea market. The kind most people wouldn't enter if it existed as a real building. Treat going there as such and you won't get burned.
Shill bidding backfires half the time anyway.... (Score:5, Insightful)
Now, you have to make a decision. Will you pay a "fair price" for this radio, or will you duck out, saying "Oh well, I don't want one THAT bad. I was just hoping the seller was going to lose his/her ass on the sale." ? It's still completely up to you. And if you bail out, the seller has a real good chance of not getting a buyer at all, causing him/her to pay the listing and re-listing fees for nothing.
Voting with your dollar (Score:4, Insightful)
-If an auction costs more then you want to pay, DON'T BID.
-If a seller looks like they are cheating, DON'T BID.
And ultimately if you feel you have been cheated don't pay, sure you might get a negative feedback but why put up with unfair pricing. If you don't pay people will STOP doing it because they won't sell.
Re:Reserve Not Yet Met (Score:3, Insightful)
The biggest thing against reserve prices is that it is an option you have to pay for (as a seller). The whole point of shill bidding is to make a buck or two more... the cost of reserve fees. Why put a reserve price when you can freely have someone else bid up your merchandise?
In the end, I care. I occasionally buy stuff on eBay, and I want to know I paid the lowest price for what I want to buy. At the very least I want to know that I am not being cheated.
RonB
Re:Reserve Not Yet Met (Score:3, Insightful)
It's plain and simple fraud. And "Reserve Prices" don't have anything to do with it. There is nothing dishonest or fraudulent about selling something with a Reserve Price, because the buyer is notified of it. Shill bidding is not an honest practice in the slightest.
now wait a sec... (Score:5, Insightful)
Re:Reserve Not Yet Met (Score:3, Insightful)
You are not alone - count me in.
To me, eBay was always a gambling site. There is NO other point in auctioning.
I personally look only at "Buy It Now" marked wares. Rest? Not for me. If I wanted to gamble, I'd rather went to arcade/game center/whatever.
Re:Reserve Not Yet Met (Score:5, Insightful)
Set your starting price at what you want to make. Instead of trying to lure in buyers with $1 auctions and a $100 reserve or shilling a $1 auction up to over $100, try just starting the auction at $100. Gee, there's a thought.
duh? (Score:3, Insightful)
Re:Yep... seen it a couple of times. (Score:4, Insightful)
It's fun to write back and say "No Thanks, I found another one at at better price. Care to match the offer at $xx.00?
Re:Reserve Not Yet Met (Score:5, Insightful)
the good & the bad & the ugly (Score:2, Insightful)
the worst thing about ebay is, anyone can place bids...
considering the darker & greedier side of human nature this should be expected...
this is why i never buy anything from ebay, and do most my shopping @ brick & mortar mostly and only buy on line from reputable online retailers, it is worth the extra few bucks for peace of mind and a guarantee and/or warrenty...
Re:Shill bidding backfires half the time anyway... (Score:5, Insightful)
The problem with shill bids is that there's no similar recourse for the buyer. If the buyer's bid is a contract, then why shouldn't the seller's offer to agree to the honest outcome of the auction also be a contract?
Re:Who cares, it only affects morons anyway (Score:2, Insightful)
Re:Reserve Not Yet Met (Score:5, Insightful)
In a very real sense, eBay is encouraging shill bidders with their listing fees. They'd be gone overnight if listing fees were the same irrespective of the auction start value. After all, eBay is still getting their ending value fees.
Re:Ebay - Where there is a sucker born every minut (Score:3, Insightful)
Re:Reserve Not Yet Met (Score:3, Insightful)
I honestly don't see the problem here, on eBay, you should bid what you are willing to pay, and no more. I think the people who get "burned" are bidding higher than they should.
Shilling is fraud because... (Score:3, Insightful)
Shilled auctions DEFRAUD the bidder of the difference between those prices. Period.
Oh and btw (not directed at parent poster...) shilling is NOT equivalent to setting a reserve price on an auction. Reserve prices are set before an auction starts and represent the lowest price the seller would be willing to sell for. Not the same thing AT ALL.
Re:Reserve Not Yet Met (Score:3, Insightful)
In a real auction, I only bid when I am not winning. Once interest beyond mine drops, I get that price, even if it is $100 less than my max price.
But with eBay's proxy bidding, I put in my max price. Again for the above $100. Legitimate interest dropped off at $50. So my rightful price is $50. But if someone came in and artificially jacked up the price - that is illegal, and most certainly NOT in the spirit of the auction, though it is within the rules of the auction.
RonB
Re:Ebay - Where there is a sucker born every minut (Score:4, Insightful)
Simple rules for eBay users: (Score:4, Insightful)
Another rule is never risk more than the amount of money you feel comfortable risking. Determinations for that level of risk vary from person to person, but don't decide how you feel about it until you have read that seller's feedback and looked at the other items this person has bought or sold. If you still get a good feeling about it, then great!
*ALWAYS* look at the forms of payment accepted. People get caught up into uncomfortable payment situations when they don't notice beforehand.
*ALWAYS* know what the shipping costs are. This is a great one to pay attention to. If you think a PS3 for $20 is a great deal, check the shipping cost. It might be well over $500 or something ridiculous like that. Shipping costs are rarely, if ever, refundable.
These may seem like common sense for everyone, but common sense goes out the window when a buyer "really wants something" bad enough. It's that "really want it" disorder that really gets people mixed up into things they shouldn't... this "really want it" disorder is the reason spammers are so successful. Most sane people know they shouldn't buy from people who hide their identities, but when they "really want it" common sense just fades away. It's really like religion and beliefs in gods... they really want it, so logic, reason and common sense just fade away where that issue is concerned.
Re:Reserve Not Yet Met (Score:3, Insightful)
BTW - to those of you who pointed out that whole "Why pay $100 for something worth $50?" Again you missed the point, that was an example, an extreme one, but an example.
RonB
Re:duh? (Score:5, Insightful)
That's not to say it would be wrong to implement a straight bidding system where an offer of $100 is an offer of $100. But that's not the system that's being used, so shilling is fraud and tantamount to theft of the difference between the price due to legitimate bid competition and the shilled-up selling price.
Re:Reserve Not Yet Met (Score:5, Insightful)
There are many reasons why it's desirable to list a low-starting bid, no-reserve auction. These are attractive to bidders because they have the potential to be a really good deal. If you want this sort of attraction to your auction, then you have to accept the risk that you'll give away a few good deals if there's not the market you were hoping for. Cheating to eliminate that risk is fraud, plain and simple. Even if no one pays more than they were WILLING to pay, they pay more than they SHOULD have paid, according to the rules of the market.
Re:Who cares, it only affects morons anyway (Score:3, Insightful)
Entering a bid minutes before the auction ends *is* sniping.
Re:Ebay - Where there is a sucker born every minut (Score:4, Insightful)
I guess you should close down brick & morter storefronts if you see too many 5th graders inside using their parents money as well, right?
Your entire argument is nonsense.
First time I've seen the think-of-the-children argument used against ebay.
Why does it matter? (Score:4, Insightful)
a) Look at the item. b) Ignore any minimum bids, reserves, "buy it now" prices, current bid, history, etc; look only at the item itself. c) Decide how much you are willing to pay for it, shipped; d) determine the shipping cost; e) bid your maximum less shipping; f) take no further action whatsoever. Do not change your bid in response to any other ongoing bidding. If you are willing to raise it later, you weren't being honest with yourself when you determined your maximum earlier.
It seems to me that this makes you completely immune to sniping, shill bidding, etc. The only issues that remain are: a) the possibility of frequently being disappointed by not winning the auction; b) the unfairness of being unable to distinguish in advance between honest sellers, with which you may have a chance of getting a bargain if there are few other interested bidders, and dishonest ones, where there are always other interested bidders (i.e. shills).
Re:Reserve Not Yet Met (Score:3, Insightful)
Why does anyone bid on anything? Hell, why have auctions in the first place? Why don't we simply have everyone write down what they want to pay, turn it in, and the highest number wins? That would save everyone time and angst, and all those fast-talking auctioneers can go get jobs reading the fine print at the end of commercials.
Re:Reserve Not Yet Met (Score:3, Insightful)
Re:Ebay - Where there is a sucker born every minut (Score:5, Insightful)
Re:Ebay - Where there is a sucker born every minut (Score:3, Insightful)
That's not the only way shill bids happen -- it's just the most obvious. (Well, the second most obvious. The most obvious would be when the same account that's selling the item is bidding on the item -- but I'm guessing eBay's system prohibits that.)
Ultimately, shill bidding is difficult to detect (and even harder to prove) when done properly. But the evidence is that eBay doesn't really care, even when it's pretty obvious that it's shill bidding, especially when the offender sells a lot on eBay.
Getting ripped off and Fixing are two diff. things (Score:5, Insightful)
The fixing auctions, with shill bidders on the other hand, isn't as bad in my book. Just don't pay more than you want to pay for it. This is the sellers way of saying they don't want to sell it for less. Getting "caught up" in an auction for a common item is just dumb.
Just stick to the fixed price items, or just set your bid once (at the price want to pay for it) for the item you want. If you're bidding multiple times on an item, you're caught up in the game and have a problem.
Re:Ebay - Where there is a sucker born every minut (Score:5, Insightful)
Sure ebay isn't a brick'n'mortar auction house, and it has a different set of rules. So what? In the real world, people don't always pay the asking price --- they are free to haggle in an attempt to bring the price down. Is that also being an asshole? That's the way the market works --- the seller wants to maximize the selling price, and the buyer wants to minimize it. You understand the framework. My advice: If you are a buyer intent on winning, put in a high bid, or snipe it yourself. If you are a seller, set a reserve price. If you don't like the game, don't play.
Stop being a bunch of whiny children (Score:3, Insightful)
Re:Ebay - Where there is a sucker born every minut (Score:2, Insightful)
Re:Who cares, it only affects morons anyway (Score:2, Insightful)
Re:Ebay - Where there is a sucker born every minut (Score:1, Insightful)
The moral disconnect of the internet should not be overlooked here. By most standards the guy that sees a kid headed toward the last voltron toy in the store and then runs in front of him to grab it is an asshole. But many consider doing the same thing on the internet "fair game."
Re:Ebay - Where there is a sucker born every minut (Score:5, Insightful)
Sure it's easy enough to justify the action of sniping, just like paying some kid for his spot in line to get a playstation, but it's still an asshole move most often capitalized upon by people with less active lives that have time resources to snipe in whenever their auction of interest happens to be ending. I'm not sure if it's just laziness on the part of programmers at eBay, but I imagine they could gleam a better profit margin by emulating certain aspects of the time tested traditional auction format where bidding is extended upon attempted sniping.
In an ideal world, sniping should have absolutely no effect on the outcome of an auction. It shouldn't matter whether you put your bid in one second after the auction opens or one second before the auction ends, the winner will always be the highest bidder, sniper or not. Unfortunately, eBay is infested with morons. These morons think that they need to bid the minimum each time, like they do in the auction houses they've seen in old sitcoms. When they see that they've been outbid, they bid another dollar, then another, and another... In the span of thirty seconds, they'll place a dozen bids or more, each just a dollar higher than the last, not stopping until they have the high bid (regardless of what the item is actually worth). Considering that you are supposed to bid the maximum you are willing to pay, this behavior makes no sense; if the price you are willing to pay fluctuates that quickly, you should be too stupid to use a computer (unfortunately, this never seems to be the case...).
This problem is easily avoided by not signaling your intent to bid on the item until it is too late for the morons to place more clueless bids. You aren't cheating anyone, you are just holding the morons to their initial bids. People only have a problem with sniping when they think "I would have been willing to pay that price." They'll keep thinking, "It's just another dollar..." even though the fact is, someone was willing to pay more; the high bid is all that matters. If you can't make up your damn mind, you shouldn't be bidding at all.
Snipers do nothing illegal, immoral, unfair, unkind, rude, or unexpected. They place bids, just like everyone else on eBay. Sometimes they win the item, sometimes they don't (and many times they will pass on bidding on an item entirely because the price in the last few seconds is higher than they are willing to pay). Sniping actually forces a handicap on the bidder; by sniping, the bidder has only one chance to place a bid, and even then only if there are no technical issues that prevent the bid from being placed in time.
As for the idea of extending auctions when late bids are placed, that's just idiotic. In most cases you have 5 or 7 days to place a bid. If you can't figure out what you are willing to pay in a week, what good will another 15 minutes do? All I can see is that you might get swept up in the heat of the moment and bid way too much, raising prices for other bidders and giving the sellers the pleasure of trying to collect money from people who are incapable of making decisions - and driving an increasing number of users to alternatives that don't play stupid games with the auction's end time.
I have a solution for all of you who whine about snipers. It is really simple, 100 percent effective, and completely free. Bid more than you are willing to pay. That's it. If you get outbid, it's no big deal, because you never wanted to pay that much in the first place. If you win at your high bid, you may have spent too much, but you get that joy of winning that you seem so concerned about. Best of all, it requires no changes to anything else, so it couldn't be easier to implement.
Re:Ebay - Where there is a sucker born every minut (Score:4, Insightful)
I'm bidding on something and I get outbid, let's say the seller himself outbid me. I decide to go somewhere else. The seller is now stuck with the item and he still has to pay eBay their cut. He took a risk; it's a game and he lost. Or the buyer might decide to bid again if he feels that it's still a good deal.
What does it matter who bid before you? It doesn't. You look at the highest bid and then you ask yourself whether you'll pay more than that or not. It doesn't matter if there are 0 or 100 bids on the auction and if all bids are by different people or they're all by the seller. Just look at the highest bid, ask yourself whether you will bid or not, it's so simple.
I don't even see what fraud has to do with a seller bidding on his own auctions and I would hate to try to explain it to the police:
Me: "I think I got ripped off!"
Police officer: "OK, what happened?"
Me: "Well, I bought a shirt for $20 on eBay!"
Police officer: "Ah, and you never received it?"
Me: "Yes, I did!"
Police officer: "Ah, and the shirt turned out to be a knockoff?"
Me: "Nono, it's real, I'm very happy with it!"
Police officer: "So what happened?"
Me: "Well, I saw the shirt, it said $19 and that's cheap, so I bid $20 and won!"
Police officer: "So you saw something you liked, thought it was cheap and bought it. Where's the problem?"
Me: "Well, I suspect that someone else had bid on it before me, possibly even the seller!"
Police officer: "And this is a problem because...?"
And I would have NO idea what to say to that.
I realize it's very hard to catch people doing this if they take their precautions, but I don't even see what they're doing wrong. If someone wants to spend all his time outbidding his customers on his own auctions, thereby making no money and then paying eBay a percentage of every single non-existent sale, then I think we should just let him. I simply don't see what this has to do with fraud.
Re:Getting ripped off and Fixing are two diff. thi (Score:3, Insightful)
Re:Getting ripped off and Fixing are two diff. thi (Score:3, Insightful)
Last I checked, that's what the reserve price is for. Shill bidding is the seller's way of setting a reserve price while hiding that fact from the bidders. It's deceptive at best.
Ebay is an AUCTION SITE, not a retail marketplace. If a seller isn't willing to sell for the market value, he needs to find a different sales format.
Re:Getting ripped off and Fixing are two diff. thi (Score:3, Insightful)
So a seller doesn't use the minimum bid probably because ebay want more of the sale or because he knows he can get more money out of some one who actualy thinks he is in an auction. In the later, he bids up the price makeing it look like there is interest in the item by someone else. This is violating the basics of a contract for sale. If the buyer set out in a process and that process is changed on them, then that is defruading the buyer.
Imagine If you will, I have to widgets for sale and place an ad in the paper. Yourespond with them and I agree to sell themto you. Then I come out and claim someone has offered more money then your payig so if you want it, you better fork some more money over. You think about it and decide to pay up, then I made the same claim again. Now what has happend here is the I have defrauded you in at least two way at least three times. First I offer the widgets for sale for a price, not a price or best offer, second, there is no other person, you ar the only one responding to the add. You could probable press the issue in court and force me to sell the item as listed. I could probably goto jail or pay a fine for the bait and switching I am trying to do. Depending on where you live there are several consumer preditor laws that protect you on this.
So in an auction that is rigged, you are not getting what was advertise and i'm sure something could be done about it. Now i don't do Ebay but someone who was effected by this could likley have legal recoures.
Re:Here's why shilling hurts you (Score:3, Insightful)
I was going to ask you if you realized, that you can bid $1,000,000, but it doesn't mean you're going to pay that much, but clearly you understand this, since you're responding to the parent (who bid a hypothetical $200 and paid $160). So I'm flabbergasted trying to understand your statement:
I've actually used the same technique you describe (small incremental bids) not because I was shilling, but because my "best price" was "smallest allowable amount over the current winning bid, up to and including my max price"
Whenever you bid any amount, you automatically will pay the "smallest allowable amount over the current winning bid, up to and including my max price." Why do you need to incrementally bid, unless you don't really know what you want, and "$1 more than my max" always seems okay. When you look at eBay auctions after the fact, you rarely see someone who micro-bid up to some level & then gave up before they were ever the winner - micro bidders are always trying to just go over. This makes absolutely no sense, because all you're accomplishing by doing that is guaranteeing that the very next person to bid will out-bid you.
Why not just wait until the end of the auction & enter the amount you think is fair? If you're lucky, you'll get it for much less, if nobody else thought it was worth so much; otherwise you get nothing, or you take it for what you think was fair. In all scenarios, you "win", unless the item in question is one that comes up for sale very rarely and you need it soon.
-BbT
Re:Ebay - Where there is a sucker born every minut (Score:3, Insightful)
On the point of why this fraud is more profitable than a reserve price, is that you can prompt bidding on an item with limited interest far beyond what the market clearing price would be. If my reservation price is $500, and your reserve is $300, and no other buyers are interested, I get it for $300. If other (fake) buyers bid against me, you might fraudulently raise the price above and beyond your reserve, pushing me close to $500. Fake bidding allows you to act as a discriminating monopolist, charging up to the reserve price of the highest buyer on each unit. Monopolist is key here though, as if your good is fungible, people can just move on to the next auction and leave you to buy your own stuff. And of course, you end up with the unhappy deadweight loss associated with monopoly. The guy in the Times article is at least partly a monopolist in that he is dealing in antiquities, which are, well, rare. Though his might be fake. You own the only remaining print of that Van Gogh? Congratulations, you're a monopolist!
Re:Ebay - Where there is a sucker born every minut (Score:3, Insightful)
Re:Ebay - Where there is a sucker born every minut (Score:3, Insightful)
Yes it is, because neither is wrong. In the latter case, both the buyer and the kid are better off as a result of the exchange, and nobody else is affected. In the former case, if a sniper beats you, then he either bid more than you were willing to pay in which case you wouldn't have gotten the item if he bid normally, or he bid less than you were willing to pay, in which case why didn't you bid that much in the first place?
By most standards the guy that sees a kid headed toward the last voltron toy in the store and then runs in front of him to grab it is an asshole.
Yes, he is. But that has no relevance to either of the above scenarios.
Re:Ebay - Where there is a sucker born every minut (Score:2, Insightful)
An explanation of what, exactly, is wrong... (Score:2, Insightful)
See, the whole concept of auctions is that the item's owner is agreeing to sell the item to the highest bidder in an auction. He sets a minimum price for his item and then it's supposed to be up to the market.
Ebay's incremental bidding policy is supposed to ensure that you do not pay more than you are willing to pay BUT that you will NOT pay more than a tiny increment more than the next higher bidder's maximum price. Ebay has instituted protections like reserve prices ("I will not sell it for less than that...") and Buy It Now prices, for the auctioneer's benefit, but those protections come at a price which some people don't want to pay because it eats into their profits.
Many people seem to think that shill bidding simply results in the low bidder being outbid and the auction lister being forced to suck up the cost. That is not necessarily the truth. Sure, in some cases it is, generally when the minimum bid is just SO low and the bidder places a maximum bid comparatively low as well. If the deal really is too good, they're out nothing. If someone outbids them, they're out nothing.
Example A: If I see an item with a minimum bid of $1, and I know the item sells in the stores for $10, I place a bid for $5. For whatever reasons, I decide that if I have to pay $6 or more, I might as well purchase it in the store without waiting for the post office. Seller knows that the item goes for $10, is not interested in selling for less than $10 and only listed the item as $1 to avoid paying the increased listing fees for items with a starting bid over $1. His response is, using a new ebay account, pretending to be someone else (because by definition, adopting another identity is in fact pretending to be someone else) to bid the item up to $10.
The result in Ex. A is that seller now pays the low listing price for his $1, plus a theoretical commission of some percent (I don't remember what it is offhand and haven't used ebay in some time.) In practice, what happens is the seller uses other Ebay protections, instituted to protect sellers from fraudulent bidders, to cancel auctions at the last minute, refuse bids and such.
Obviously, Ebay's intention was not to give shill bidders a way of driving up their prices and then backing out if they don't like the results because they have tools, which they profit from when used, to allow sellers minimum prices.
Further compounding this is that Ebay then offers the option of re-listing the item for free, while not charging their typical end of auction fees because the fraudulent sale never went through. So the seller lists an item, agreeing to sell it to the highest bidder, provided that bidder is above any reserve or minimum bids. The buyer agrees to buy the item, at the lowest price above the next highest bidder. The seller does NOT pay a fraction of the inflated bid price. The seller does not pay to relist the item. The seller does not pay Ebay's fees for minimum prices, which the seller has, in practice, set.
Anyway, as I was saying, the relist situation is not the major problem with shill bidding.
Example 2: Seller lists the item at $1. He has no intention of letting the item go for less than $10 because that's what it sells for in stores. The Buyer bids a maximum price of $10 because, as an absolute maximum, that is what he will pay elsewhere. The Seller then steps in and bids 9.50, the result drives up the next minimum bid to $10, the amount he is willing to let the item go for. The buyer pays $10, the maximum he was willing to pay and often walks away unaware of any shill bidding.
Here is where some people seem to have trouble... Buyer is not agreeing to buy the item at $10. He is agreeing to pay the lowest amount over
Re:Getting ripped off and Fixing are two diff. thi (Score:2, Insightful)
I bid $300 for a item last week, the next lower bidder pushed my bid to something like $220, it didn't hit their reserve.
I couldn't find a way to push my bid to the $300 to see if it would exceed their reserve, except to setup a second acount, and thus push my own bid up (I didn't).
Re:Ebay - Where there is a sucker born every minut (Score:1, Insightful)
Well then, by that criterion, the whole system is set up to be inconsiderate by employing proxy bidding. I bid $5000, you bid $10, and the current bid is $11. You still don't know what I'm willing to pay.
It sounds to me like most of the buyers opposed to sniping (including yourself) are whining because they don't get to dictate the rules of the game. That still doesn't make it illegal, immoral, unfair, unkind, rude, or unexpected.