Will eBay Kick Me off the Site If I…?

Shill Bidding

Q: "I have a few items up for sale on eBay. I've received a couple of bids but nothing close to what the item is worth. Can I ask a friend to bid on these items to get some action going and possibly stimulate some interest in them?"

A: ABSOLUTELY, POSITIVELY NOT!! (Yes, I know I'm screaming!)

This is called shill bidding, and it is absolutely illegal. If eBay catches you doing this, not only will they kick you off the eBay site forever, they will report you to your state attorney general's office for criminal prosecution.

Here's how shill bidding works. A seller asks a confederate (usually a friend or family member), called a shill, to enter bids in his auctions to drive up the price. If the shill wins the auction, no money changes hands; the seller and the shill exchange positive feedback on eBay and, after a decent interval of time, the seller relists the item on eBay. If other, legitimate bidders enter the auction, the shill backs off and lets the auction proceed to its natural conclusion on eBay.

A variation on shill bidding involves the use of eBay's popular Second Chance Offer feature. A seller posts an auction listing on eBay, and the confederate, or shill, places a "sniper" bid on the item at an outrageously high price. Legitimate bidders bid on the item, and at the very last second the sniper shill's bid is entered and wins the item. Because the shill bid is only a dollar or two over the second-highest bidder's maximum bid amount, that amount is now revealed to the seller. After a day or two, the seller announces that the high bidder wouldn't go through with the transaction and offers the second-highest bidder a second chance offer to purchase the item—at the maximum amount the second-highest bidder was willing to bid!

It's extremely difficult to prove shill bidding on eBay, because you have to prove the existence of a relationship, an agreement, or collusion between the seller and the shill bidder. If someone is bidding consistently on a seller's items and always comes in second when the listing closes, that person may or may not be a shill bidder. If the person is bidding at the request or urging of the seller, he or she is a shill bidder. If the person is simply a bidder who lacks the confidence to submit winning bids (an "always a bridesmaid, never a bride" bidder), he or she may be a loser but is not a shill bidder.

To read eBay's shill bidding policy, go to pages.ebay.com/help/ policies/seller-shill-bidding.html.

Q: "I've been selling real estate on eBay for a while. Whenever I put up a listing I ask one or two of my friends to submit starter bids just to get the action going. Once real bidders start piling on, my friends back off and let the auction happen. Am I at risk for having my eBay listings taken down because of this?"

A: I have a phrase for this: "shill bidding with good intentions." Unlike most shill bidding operations, the goal here is not for the seller to get an artificially high price for the item. The idea, rather, is to show bidding activity on an item so that on the search results it stands out from other items that have attracted no bids.

As buyers, we have all searched on eBay for popular items where there are many listings. If most of the items have attracted no bidders, but there are two or three bids on others, we tend to focus our attention on the latter, on the theory that these other bidders have already separated the wheat from the chaff for us.

But, to paraphrase Gertrude Stein, "a shill bidder is a shill bidder is a shill bidder." If sellers use shill bidders to create bogus bids to make the listing more attractive to legitimate bidders, they are manipulating the auction results just as much as a classic shill bidding operation does. The shill bidding policy on eBay is very clear: Any bidding that artificially increases the item's price "or apparent desirability" is shill bidding. Don't even think about doing it!

Q: "I have an item up for auction on eBay, and there's a lot of spirited competition for this item from several bidders. One of the bidders has been e-mailing me daily with questions about the item, and I've been answering his e-mails promptly. Is there any way I can get into trouble by doing this? Should I be sharing this information with some or all of the other bidders?"

A: Yes, to both questions. The shill bidding policy on eBay specifically includes "bidding by individuals with a level of access to the seller's item information not available to the general Community." By favoring this buyer with information that is not available to other bidders, he now has a "level of access to the seller's item information not available to the general Community." Think about it: If this buyer were a personal friend of yours, isn't this exactly how you would manipulate the auction to ensure that he wins the item? What you should do here is post his e-mail questions, and your answers, on the listing site so that all bidders can see your exchanges. You can do this by amending the auction listing.