How Shill Bidding is Ruining the Sports Card Hobby

By Eliud Alano June 12, 2024 03:21

In the past few years, there has been a resurgence of interest in the sports card hobby as collectors and enthusiasts have been eager to get in on the action of auctioning their cherished cards.

But one dark cloud hangs over this lively market: shill bidding, a fraudulent strategy used to drive up card prices that skews the market and frustrate real collectors and dealers.

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Understanding Shill Bidding

Shill bidding happens when you use a bunch of burner accounts to bid on an auctioned item, for the sole purpose of artificially raising the price.

This is an insidious tactic that further raises the demand and perceived value of said attached card and, as a result, the price at which it sells.

The shill bidder, even though they win the auction - usually - won't pay for the item, leaving the real seller with nothing in hand and thoroughly deflated.

The Damaging Impact

The negative effects of shill bidding go far and wide.

For one, it is a blemish on the buying experience for real sellers who need these sales for financial reasons.

Such an experience is disillusioning and it further damages the trust and the credibility of the card-collecting hobby when the card trader finally and belatedly realizes that he will not get the big bundle of money that he imagined that he would.

In addition, shill bidding artificially inflates what cards sell for to anywhere near these levels in the first place.

This misrepresentation can affect both buyers and sellers, making it difficult for individuals to truly determine the value of a card, and in turn creates resentment, frustration, and general disillusionment throughout the fanbase.

Because of this, it damages the integrity, the authenticity of the sports card hobby, which ultimately hurts the experience across the board for fans and collectors.

Identifying Shill Bidding

One of the biggest challenges an individual faces when participating in sports card auctions is the prevalence of shill bidding.

But there are a few tell-tale signs to help you identify potential shill bidding:

Continuous Bidder-Seller Relationship: Monitoring bidder consolidation with the seller. But the flip side of this is that a disproportionately high level of bid activity with one particular seller can set alarm bells ringing.
Unrealistic Price Spikes: Watch out for insanely high or low prices that are nowhere near the actual market value of the card. These spikes may show the signs of a faked auction via shill bidding.

Combatting Shill Bidding

To solve the problem of shill bidding and to protect the hobby of sports cards, we must take measures somehow before it blows up.

Better Enforcement and Monitoring: Stringent algorithms to nab any form of shill bidding happening on online platforms (such as eBay).
Community Awareness: The more the community is educated about shill-bidding, the less impact it will have.
Regulatory Intervention: This type of collusion between auction platforms and regulatory authorities would provide actionable insights for building strong policies to prevent and punish shill bidders.