“Sold!” Or is it? Auction Houses & Chandelier Bidding
“Sold for $500 to Norma Bernstein!” The auctioneer slams their gavel and the auction moves forward after another successful sale.
However, there was no successful sale. Wait…What?!
The practice of Chandelier Bidding, otherwise known as Buy-In bidding, Rafter bidding, Off-the-wall bidding, Consecutive bidding, Vendor bidding, or Consignor bidding, is the practice where “the auctioneer pretends to take a bid from the room in order to encourage bidding, create the appearance of demand, or to push bidding closer to the reserve price” (Hyperallergic). In other words, it’s a fake bid.
Auction houses benefit from chandelier bidding because it gives the illusion of a stronger auction. Most auctions believe in the power that mood can have on the auction floor: The appearance of bids begets more bids, the appearance of passed lots begets more passed lots. According to this logic, buy-in bids actually produce a more successful auction overall by keeping spirits up on the floor. Likewise, buy-in bids can also encourage current bidders to bid past the reserve price (if bidding does not reach reserve price, the item remains unsold).
Auction houses argue that chandelier bidding is ethical because the true results of past lots is in the post-sale report. Consecutive bids only come into play on the auction floor for those in attendance. However, critics claim that the practice is misleading. The monetary value of art highly depends on its current popularity. Arguably, buy-in bids taint bidders from seeing the “true” level of interest their competitors have in a lot. Some areas, such as New York City, have banned chandelier bidding for this reason.
Is buy-in bidding useful or deceptive? As auction consultants for over 20 years, Drew & I have seen buy-in bids do nothing for some clients and help others. While chandelier bidding is certainly an auction house theatrical act to keep in mind, there are other auction practices I find even more critical for clients to know. Find a skilled representative to navigate the auction world for you so you make the most money.
For assistance consigning to auction, call Drew Magnusson today at 973-425-1550.
Co-Authors: Lynn Magnusson, ASA, AAA and Becky Lipnick, Communications Coordinator