Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Mon Feb 23 2015 21:49:22

Are Shill Bidders Worse than Liar Buyers on eBay?

By: Ina Steiner

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EcommerceBytes wrote about buyer fraud committed against eBay sellers in Monday's newsletter (liar buyers, they're called), but a reader responded, asking, what about shill bidding fraud committed by sellers?

"If I looked back in the past year I could easily point out 5 large dealers that have shill bidders regularly bid on their merchandise," he wrote. "I even turned them in do to it being soooo blatant, and not one time was a seller penalized that I could see."

"I figured you had done some articles….so I did a quick search….you have done many. But it still begs why nobody has gone after eBay….it seems its sooooo blatant!"

He pointed to an article from 2012, "eBay Relaxes Shill Bidding Provision in Major Policy Shift." And last year, we wrote about how sellers could actually "buy" shill bids from services such as Fiverr.

It's easy to see why sellers would be tempted to bid up their auctions - some say as long as buyers pay only the highest price they're willing to pay, there's no harm - but it's absolutely against eBay rules and is also illegal in many places.

How do you identify shill bidding, and is it common on eBay? 

Does eBay do enough to clamp down on shill bidders, and if not, what should it do?




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Readers Comments

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by: sasikat9 This user has validated their user name.

Mon Feb 23 22:52:32 2015

I would take a shill bidder anytime over the ebay liar.

Liars are the worst scourge on freedom. Ebay does nothing against either as neither slimy liar or the shill bidder can be proven.

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by: SparklyEyes7 This user has validated their user name.

Tue Feb 24 00:28:34 2015

Shill bidding is illegal everywhere although seldom enforced.

And eBay does nothing about it.  

When I first started selling a certain collectible item, I noticed the largest seller of that item getting top prices on all of its .99 starting auctions.  Then started looking at the bidding history.  They had a few people bidding on hundreds of their products each month yet never win one of them!  Either they are the unluckiest people on earth or as Ricky Ricardo said "You got some 'splaining to do"

I spoke with eBay and they sounded all concerned but nothing ever happened.

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This user has validated their user name. by: Bill

Tue Feb 24 00:45:39 2015

Plain and simple, shill bidding is what has killed auctions on eBay since it discourages many buyers from even attempting to bid. I have talked to many people through the years that used to bid on eBay and say that they do not have any interest any more becasue they always get outbid by certain buyers and they usually are the same ones for the same sellers.
Shill bidding IS illegal and should not be part of the process but eBay does not care one bit since they make money from it in their fees.
It is but another nail in the eBay coffin.

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by: DZT This user has validated their user name.

Tue Feb 24 01:08:52 2015

I recently was notified by a friend of mine that he was one of the 15,000 long time sellers that were purged by eBay in August 2014.
After numerous failed attempts to even find out why he was no longer allowed to sell on eBay....
He had to go through great lengths to use his daughter in laws computer & contact info. to create a new seller account.
He told me that he is still allowed to bid & make purchases on his old ''purged'' seller account & since eBay was underhanded enough to never give him a reason why they summarily purged his old seller account.... he now regularly shill bids on his own items with impunity because his new account is in no way traceable to his old account {as required by eBay}.
Another fine example of an unexpected consequence of the ill thought out policies at eBay.
 

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by: Volvo351 This user has validated their user name.

Tue Feb 24 02:00:02 2015

Shill bidding is a nasty bit of business and of course it should be controlled by eBay.  It can't be proven in an individual case but when you get a member ID that's constantly bidding on a particular seller's items but never WINNING them, you can  detect a pattern.  Most often the shill will enter multiple bids $1 or $2 apart, designed to see how far a legit bidder's automatic bid can be pushed up.  

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by: pfft!! This user has validated their user name.

Tue Feb 24 02:02:41 2015

If your "FRIEND" has no problem shill bidding an account he set up under his DAUGHTER IN LAWS name.........I feel sure there was probably a good reason he was purged under his OWN account.

Don't get me wrong.  a LOT of "GOOD" sellers have been purged wrongfully.  But your "friend" doesn't sound like he's one of them.

Has he considered the damage he'll be inflicting once he's burned this new account and it catches up with his "daughter in law" one day.......along with anyone else in her family whose own acct will now be linked to that mess?  My guess is he's either too dumb to think that far in advance OR just doesn't care.  

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by: pfft!! This user has validated their user name.

Tue Feb 24 02:03:40 2015

Sorry...the above reply was to DZT

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This user has validated their user name. by: Philip Cohen
Web Site

Tue Feb 24 06:52:49 2015

The simple fact is, undisclosed vendor bidding (shill bidding) is a false representation and that is a fraud under the common law and specifically under U.S. Federal Law. US Code, Title 18, Part I, Chapter 63, §1343, “Fraud by wire, radio, or television”, is the applicable Federal statute:

“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. …”

Aiding and abetting … http://en.wikipedia.org/wiki/Aiding_and_abetting

Misprision of felony … http://en.wikipedia.org/wiki/Misprision_of_felony

All the details anyone will ever need to know about shill bidding and eBay’s calculated facilitation thereof is detailed (at great length) at … http://bit.ly/11F2eas

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by: Caroline1 This user has validated their user name.

Tue Feb 24 07:04:06 2015

Ebay has made it harder to spot shillers since you can no longer see buyers' true IDs or what they've bid on. All in the name of "making Ebay a safer marketplace"—yeah, right.

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by: topdog This user has validated their user name.

Tue Feb 24 07:59:27 2015

shill bidding, lying buyers - they're two sides of the same coin. Both are dishonest behaviors used to rip people off. Both are a cancer which have destroyed a once-great site. EBay turned a blind eye to these (along with Chinese fakes) years ago so that they could pursue better metrics and more profits. They succeeded in the short run, but at the cost of killing any trust and credibility that they used to have.  

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by: FREDDY This user has validated their user name.

Tue Feb 24 08:53:49 2015

I no longer buy or sell on ebay. I just left that site because of the ''liar buyers'' and shill bidding.

If I remember correctly, it was about half of the items I didn't win in the bidding war that I would get a second offer to buy within 12 hours. That was way to many. What I was bidding on was vintage electronics, so it wasn't that they had multiple items on hand.

It is a toss up on which is worse. JD is going to bail before new government officials come in to play.  He does not want to fight it out in the legal system.  Right now he is being protected.  What  money can buy......

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by: Ebay Seller-Ebay Buyer This user has validated their user name.

Tue Feb 24 08:54:55 2015

Ebay has done all they can to allow shill bidding and to allow it to expand greatly. Not being able to see the bidders user id's was the single biggest factor that has allowed shill bidding to explode.

I buy a lot and simply have to be extremely disciplined with my bidding. I simply punch in the max I will spend on an item and will almost never go higher due to the explosion of shill bidding.

For what I buy, auctions are always the best way to go for getting the lowest prices, so it takes patience and discipline to get the best prices and shill bidding makes no difference if you punch in your max and don't go higher

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by: RichieC This user has validated their user name.

Tue Feb 24 09:00:21 2015


I Dont Believe!!!

You people got to stop picking on poor FleaBay / PrayPal!!

Seems like more information that FleaBay needs to hide from their Customers, ''The Sellers!''

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by: KathleenJohnson This user has validated their user name.
Web Site

Tue Feb 24 09:01:22 2015

Liar Buyers and Shill bidders - eBay enforcing the rules or not, both practices have destroyed the credibility of eBay.

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by: tgm This user has validated their user name.

Tue Feb 24 09:01:30 2015

There's no question that shill bidding happens...and I run into it routinely.  The other thing that I've begun running into more often is where I bid on an item by a particular buyer and I get a pop-up saying that I can't bid since I've won something in the last 7/10/30 days...

IMHO, eBay has gotten increasingly sloppy and near-sighted when it comes to patrolling those things it used to say were critical as they fight to get new listers and keep pace with Amazon and all the newer sites and retailers out there.  I've repeatedly reported fake product and product descriptions to eBay - fake turquoise, silver and jade are the norm these days on eBay - and they simply don't care.  

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by: Maui5150 This user has validated their user name.

Tue Feb 24 09:09:11 2015

This is basically the lesser of two evils.  Both are wrong.

Lying Buyers (not received when was) is really out right theft.  The seller loses the item, the money, and in most cases pays shipping and fees.  In short not only do they lose the financial loss of the item, they also pay additional penalties.

Shill bidding jacks up the price.  It does steal from the buyer in what they would pay in a fair and honest auction.  I have sometimes allowed myself to be shilled because I wanted the item and was o.k. with the higher price, but I knew I was shilled.  Other times, I have avoided bidding higher when I suspected shilling or played my little came... I call it "Am I being shilled"

How does the game work... You bid.  You see the shilling account out bid you, and this is where it gets tricky... You walk that fine line and try and get outbid.  You never bid more than you are willing to pay.  Ultimately your goal is to be the 2nd high bidder.  The auction ends and a few minutes later... Shazam... You have a second chance offer.  Some sellers will try and hide what they did... Oh I have two of them.  Since I deal in vintage clothing - "really?  Can I see pics.  I want to see the differences between the ones listed"  

This happens to me once a month - last week in fact.

Ebay promotes bid shilling because it increases their final value fee.  Ebay has also gone out of their way to hid bidder identities, and the like to obfuscate the process and try to mask the results.

One of the easiest ways to remedy this is to change the second chance process to make the offer the lowest of the next highest bid.  After all, if the shill bid was $500 and your highest was $490 and the next highest was $380, the real second chance offer should be $390, not $490

Another useful tool would be to show metrics on bidders that all could see to the number of Non-Paying Bidders a person has as well as number of canceled auctions.  

If a user sees the person running up the price has 15 cancelled auctions in the last year, it is obvious what is going on

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by: michaelsams This user has validated their user name.

Tue Feb 24 10:07:45 2015

And why would ebay care? More dollars in their pocket! Could you imagine them going to the shareholders and saying they have made improvements in shill bidding detections and by the way sales are down .0003%? They would get reamed.

Ebay is not your friend, they are the enemy.  

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by: RCL This user has validated their user name.

Tue Feb 24 10:37:56 2015

I guess I am surprised there has not been more exposure in the media of the degree that shill bidding is tolerated at eBay. It is one reason I RARELY buy at auction there anymore.

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This user has validated their user name. by: SalesBoy

Tue Feb 24 11:07:43 2015

This is yet another of the many good reasons why I sell, and also buy, almost exclusively via Buy It Now with a requirement for immediate payment.

This way I avoid the shill bidders, liar buyers, super-slow-mo payers and deadbeat bidders this way.  I know how to ofer, and find, a good deal that is fair to both buyer and seller.  Auction format is a has-been!

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by: Enough Is Enough! This user has validated their user name.

Tue Feb 24 11:13:35 2015

SIMPLE MATH AND ECONOMICS:

Shill Bidding- ILLEGAL AND IMMORAL

Lying, Thieving ''Buyers''- ILLEGAL AND IMMORAL

ebay Policies- ILLEGAL AND IMMORAL

ALL OF THE ABOVE= Money in ebay's Pocket

MONEY IN ebay's POCKET= Happy Shareholders

HAPPY SHAREHOLDERS- All That Matters To Corporations Nowadays

ALL THAT MATTERS TO CORPORATIONS NOWADAYS- Profits, NOT People

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