As much as shill bidding isn’t that common, it is quite easy to detect. Some sellers use shill bidding to abuse auction sites. In most cases, the sites don’t have the capabilities to deal with the vice but solely depend on members. Vigilant members are often the ones who identify the practice and attempt to deal with it accordingly. With most of the sites having a provision known as hidden bidder feature, the method has become even more prone to happen. You might be at crossroads as to what shill bidding is and whether it affects you, worry not as your answer lies here.
What is shill bidding?
Essentially, shill bidding refers to the practice of a seller using another user identification, which they have created, then using it to bid on their listings. They sometimes even go to the extent of creating and using multiple accounts all in their favor. The sellers do this to affect the final price of the item positively. This increases the profits they make. Sometimes because of too much greed, the seller may end up winning their piece in the bidding exercise.
The main idea behind this is that the bidding will be high prices, hoping that a legitimate buyer comes along and bids even higher to win the goods for sale. As unfortunate as it may sound, it is a practice that is increasingly getting more and more popular.
Is shill bidding legal?
Shill bidding, though very common, is illegal. It’s an unfair method to get higher returns and is used by some merchants for mileage in a property sale. This is why it is considered to be an unfair way of competing with others. Auction sites have since denounced the practice and innovate new ways of dealing with it daily.
Does shill bidding affect me?
It can be somewhat of a challenge for the average person to notice a shill bidder. Often many are affected by the practice but don’t see it happening. However, it can be easy to notice shill bidding if you are keen enough. The following are some of the ways you can use to keep an eye on shill bidding:
1. Shill bidders remove more bids than regular users
Most of the auction sites like eBay for instance, permit their users to retract their efforts even after placing them. However, the removal of a bid is supposed to be anchored on particular reasons and not just a by the way. As much as this is made to sound like a good rule, it lacks actualization when it comes to the violations of the same. This means that you cannot do much if someone retracts a bid.
After all, no one can be forced to pay for an item that he or she has retracted a request. This makes it easy for shill bidders to place and remove bids at will. It is left for your discernment to know who a shill bidder is through the mode of operation.
2. Most shill bidders have little to no feedback
Shill bidders place and remove bids to favor themselves, so you don’t expect them to finish their transactions, do you? It is only after a deal is complete that you will be able to receive feedback. This means that most people who lack feedback on auction sites might be shill bidders. Mark the word might because not everyone who doesn’t have input is a shill bidder. This tip can, however, be of help when trying to identify shill bidders.
3. In most cases, shill bidders are newbies
Again here, you need to note that not all newbies are shill bidders. After all, anyone in an auction site has been a newbie before. Being a newbie isn’t a fault or mistake. The only unfortunate side of it is that most people would think that you are a shill bidder.
Generally, there is a way you can tell a legitimate newbie from a shill bidder. This is how, when you check the date that an account has been created and find out it is recent, monitor the activities first before concluding. Mostly a newbie who is constantly bidding on several auctions but of the same seller can pretty much be a shill bidder. This is because the aim is to offer only on the items of interest and not just everything. They aim to achieve a higher sale on a particular seller’s goods.
4. Ideally, a shill bidder will only place bids on specific auctions
The aim as discussed above is to raise the prices of some items and not to bid on all. This is why a shill bidder will only be placing their bids on auctions that belong to one specific seller. This is often one of the easiest ways to identify a shill bidder. To be sure of this, you can take a look at the current and completed actions of the seller and attempt to follow if the shill bidder has placed bids on the other auctions owned by that seller.
Some of the auction sites have started coming up with ways on how to track shill bidders. Sometimes the most used method to identify shill bidders would include monitoring the IP addresses. Here, if the seller and the bidder have the same IP address, then it would raise questions on legitimacy forcing the sites to take a keener look. These and many other practices have for a small level, helped to reduce the presence of shill bidders online.
It is also important to note that since shill bidders are continually increasing in number, sites have made more stringent rules to help reduce the vice. For instance, retraction or removal of a bid from an auction site is often considered as a black mark and can land you in surveillance from the site. Of course, this is not when you do it once or twice but when you continuously engage in the practice.
The site might start suspecting your activities, and even if you are not a shill bidder, you might be mistaken for one. For the shill bidders, they generally don’t care if their accounts get terminated as they would merely open new ones and keep on with their exercise. At the end of the day, shill bidding is often not worth it for any seller. It takes time and can sometimes even cost you more than you bargained for.