3 Important Rules For Running a Silent Auction

Most of us find rules to be constraining, especially when we are trying to advance our organizations and raise more money. However, some rules are critical, not just because they are "the law,” but because they can protect us from unwanted issues or unnecessary work.

While we don't offer legal advice, we do often consult with our customers on some best practices around running a silent auction. We are going to share with you three best practices that will reduce "angry guest” occurrences and reduce your post-event workload! 

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Rules for running a silent auction

Best Practice 1: Understand the Bidder / Seller Terms and Conditions used in your Software 

All Handbid clients when they register in our apps or online are required to agree to our bidder terms and conditions. While few probably read them, they provide a detailed description of the mobile bidding company's role in a transaction, the charity's role and obligations as the seller, and the bidder's obligations as the buyer.

For example, our terms of service state to the bidder:

By placing a bid on or offering to buy any Good, you irrevocably agree to pay the Total Purchase Price for the Good if you are the successful Buyer. Once you place a bid or offer, you may not cancel it. Each successful bid or offer creates a binding obligation on you, as Buyer, enforceable by each of Handbid® and the Seller, to pay fully and promptly all sums due and perform any other conditions of completion concerning the applicable sale.

That's a lot of legal language that basically says "if you bid on it and win it, you are obligated to buy it.”

So how are Bidders protected? Well, we also provide rules to our Sellers. These rules govern how the item is described and presented (disclosures of damage, fine print, etc.), and even the rules around bidding. We also offer "best practices” around how to set auction open and close times and how to keep bidders notified when they change. Finally, we provide some guidelines on how to handle "delete my bid requests” which we will cover in the next section.

Here is an excerpt from our Seller Terms and Conditions:

You (the Seller) will describe all Items offered by you truthfully and accurately. This includes text descriptions, images, and pictures of each item of Items including, without limitation, its physical condition, age, authenticity, provenance, and any other relevant data. All known or suspected modifications of the original Items, including damage or wear and tear to Items, must be clearly disclosed on Handbid. Additionally, the information in your listing must not be misleading, either through misstatement or omission.

All of these guidelines are there to increase participation, maximize revenue for our customers, and minimize potential disputes. 

In short, as a Seller, it is essential to understand the rules and obligations you have to describe items and operate your auction accurately.

As a bidder, you also need to know your responsibilities as they pertain to bidding, purchasing the item, and taking possession of it.

Best Practice 2: Require a Credit Card on file to Bid

Auction managers have historically been hesitant to require this, but we strongly encourage it for the following reasons:

1) It tremendously speeds up checkout. Bidders who just donated and don't have auction items to pick up can just go home at the end of the event, and you can process their card on file for their generous donation.

No need to have them stand in line when you have nothing to give them (their receipt is already in their email inbox with your pre-written thank you message on it!).

2) It will largely eliminate the post-auction collection process. It may not be you, but someone at a charity is spending days on the phone after an event trying to collect payment from people who pledged to give or purchased auction items but didn't have a card on file.

This will eliminate that list down to the select few who you want to call first (before you run $10,000 on their card) or those who had a declined card. The rest can be processed that night! 

3) Your guests are used to this now. Several years ago, we saw much more push-back from guests on this. But today, we don't see that at all. Most guests now realize that adding a card will allow them to pay from their phone or bypass checkout lines altogether. They are more than happy to provide a card on file to avoid a post-auction wait.

Moreover, with apps like Handbid, guests can add the card directly to their account from their phone if they don't feel comfortable having you swipe it at the door. 

Best Practice 3: Be careful when removing bids for bidders

Most mobile bidding software (including Handbid) makes bidders confirm their bid before they place it, so the situation where a user "accidentally bid” on the wrong item should not happen often. Of course, we realize you will have a situation from time to time when a "freaked out” and "nervous” bidder who just bid $1,000 on an item wants it removed; and, your "congratulatory jokes” aren't going over well with them.

So you set out to remove that bid... Here are a few things to think about:

1) Removing a bid can create a chain reaction on that item. If you have multiple bidders on an item and you remove the winning bid, you will now establish the previous bidder as the winner. But what if they have moved on and they no longer want it? So now you are removing their bid, and before you know it, you pulled on that pesky string and unraveled the whole sweater! Before you jump to remove a bid, first consider point #2 and #3 (below).

2) Encourage the current winner to "wait to get outbid.” In many cases, someone will outbid them, and the problem is solved, especially if the auction is just getting started. Assure them that "there is plenty of time” and let's just see what happens. If your auction is closing soon, offer to revisit it with them. 

3) A bid is binding. It's best to understand why a bidder no longer wants to bid on an item. Understand that in most systems (including Handbid) a bid is a binding agreement to purchase the item at that price. Do not be quick to accept excuses such as "I no longer want it,” or "I called my spouse, and they want to kill me.” Ultimately, it is up to you, and you don't want an unhappy bidder. Feel free to remove the bid if you can get the 2nd place bidder to agree to be the current winner. Otherwise, you may want to handle those situations on case by case basis. 

Do you have a bidder who often wants their bids removed? Some systems, like Handbid, allow managers to put a spending limit on those bidders to protect the organization from a bunch of deleted bids at the end of the auction.

There you have it! Three best practices around "Auction Rules” that we wanted to share.

Hopefully, these help you better manage your next event. If you want any details on how Handbid's software manages these or other legal issues (tax receipts, item taxation, etc), please reach out to us and schedule a demo with our team!

Good luck!