At a benefit auction a few years ago, a woman in the back enthusiastically bid in the live auction. She enjoyed bidding a little too much.
After buying the trip to Hawaii, her husband let her have it — verbally.
In tears she told my auction team member that she couldn’t buy it.
“Ma’am,” my team member gently reminded her, “You’ve already bought it.”
“Sell it again,” she cried, “He’ll divorce me if I take it home.”
Has this happened to you?
If not, you just haven’t run enough benefit auctions.
It’s bound to happen, like crashing a motorcycle. When I took a bike safety class a few years ago, the instructor said, “It’s not a matter of IF you’ll lay down your motorcycle. It’s a matter of WHEN.”
The same is true of your gala auction sales. At some point, a buyer will renege. Your once-thrilled auction winner doesn’t pay.
The conversation might sound like this:
- “I thought XYZ came with this item and it doesn’t. I don’t want it.”
- “The restrictions are too restrictive. We wanted to use this over summer/winter.”
- “I thought you were selling the next item.”
- “I couldn’t understand the auctioneer.”
- “The auctioneer said XYZ was included. It’s not.”
- “My spouse said we can’t afford it.”
- “I’m embarrassed to say I was tipsy and got overly involved.”
I’ve seen or heard a lot.
- The band member who bids on a $5k package and is mortified when the auctioneer actually sells it to her. (She crawled under the banquet table to hide before being outed.)
- The guest in the back who wildly waves her bid card to catch the attention of her friend seated across the room. She can’t understand why the auctioneer thought she was bidding.
- The has-been celebrity who was paid to attend a gala, bids aggressively on an item (perhaps to still look relevant to the crowd?), and then reneges. At first, he offers to pay $1k of the $6k purchase. Then he talks to his lawyer. “My attorney said it’s a charity auction and I don’t have to pay for this.” (Not true. The law is on your side, but that’s another day’s topic.)
So, what should you do when it happens?
Here are some classy options.
- If it happens during the event and the benefit auctioneer is able to offer it again, she should do so. For instance, I resold the Hawaiian vacation mentioned above.
- Sell it after the event in an online auction. At an auction last month, one of the bidders approached the charity after the gala. “I thought I was bidding on a 6-person dinner,” the bidder said, “but it was a 2-person.” A $2500 donation disappeared. Fortunately the charity had the ability to sell items in an online auction.
- See if you can get a partial donation. “Now that our gala has ended and everyone has gone home, we don’t have an easy way to turn this donated item into cash,” you might say, “And we were really counting on this! Could you give us a partial amount, like $X?”
One thing you shouldn’t do is publicly “out” them.
Here’s a disappointing story worth reading. It’s about a high-rolling donor who pledged millions to Florida charities. He never paid.
The journalist interviewed several people. One nonprofit explained that it wasn’t the organization’s policy to state the names of reneging bidders.
My advice? Take that approach.
It might be tempting to call out the offender, but a small comment can have major impact.
Here’s a tweet I saved from a couple of years ago. A nonprofit was stiffed by a winning auction bidder. The nonprofit took fast action, announcing his name on their website.
Then someone (below) took notice and posted it on Twitter.
laurie_pringle: Just saw an animal rescue website that outted someone for defaulting on a fundraising auction item… Wow!
– Monday, 22 February 2010, 7:24 pm
Notice that Laurie Pringle didn’t mention the name of the charity.
Silence is golden in such situations. Or — if you’ve got an even better alternative — share your idea below in the comments.
Can you give me advice on what to do when a donor renegs on a silent auction golf outing worth over $2000. It was at a charity dinner that was using the money to welcome home our veterans. The charity has reached out to this guy but he doesn’t want to honor his commitment.
John, this doesn’t happen frequently, but it does happen. Without understanding the nuances of your registration and checkout process (and if you need help with that, I’ve got a DVD you can buy…), I suspect you had some silent auction rules written into your catalog, right? So could you take him to court using your rules? Sure, and you’d very likely win. Is that a good idea? Probably not for $2000. One of my groups banned a person who reneged on a $9000 item from ever attending another one of their events, but they didn’t take him to court.
Most groups will explain how this adversely impacts them, explaining how these items are tricky to resell as you only host your charity dinner once a year when many bidders convene. (Even if you sell it in an online auction format, it rarely brings in the same amount of money as when someone bought the trip “in the heat of the moment.”) Perhaps propose this: “It’s unusual for us to have this situation arise. And for our group, this $2000 is a big impact as a lot of our veterans rely on the donations made at our dinner. How about this. We’re going to make every effort to resell this and we hope that it sells for more when we auction it online. But if it doesn’t sell, would you be willing to pay the difference between what you agreed to pay at the dinner and what we’re able to sell it for in a second round?” Then you can either sell it in an online auction or a blind bid auction, asking guests to submit bids on the item via email.
Hi I just won an auction for a Steuben horse along with a few other glass pieces, but am just interested in the horse. I just discovered the horses feet are all chipped up. In the glass collecting world chips or damage make the piece almost worthless. I am very upset that the auction house did not list this damage in the listing. They are saying it’s my fault for not asking for a condition report. I do not want this lot now. I already paid for it a day ago by credit card but my boyfriend wants me to try and cancel it. Do I have any options? Thank you very much!
Amy, it seems that you’re referring to a commercial auction whereas my company only handles benefit auctions. Though they are both auctions, the manner in which items / donations are handled are different. For your situation, I’m not an expert in possible recourse, or whether it’s worth the trouble to attempt it anyway.
That said, as I read your situation, I’m reminded of that adage “let the buyer beware,” meaning it’s up to the consumer (the buyer) to oversee due diligence on a purchase. So personally, I’d be more likely to keep the horse and learn the lesson that was handed to me.
Hi Sherry,
It’s been two years since you answered a question, but maybe you are still checking here? I have a feeling I am going to win an online silent auction. Honestly I only meant to get the bidding started, not win the item. I have no problem paying, but I’m not that interested in the item. If I decline the item, but pay my bid, can I deduct the full amount of my bid? Have you come across this or a similar situation in the past?
Thanks!
John
Certainly tax matters are best left to a tax professional, so I’d start there (I’m not anywhere near qualified). And my understanding now (with changes in the tax code) is that many folks aren’t an incentivized from a tax perspective any more *anyway.*
But if what you’re doing is simply making a contribution to the nonprofit, I don’t know why that would be any different than if you were to simply write a nonprofit a check on any other day of the year, and get whatever deduction you’d normally be entitled to.
Can you tell me how to proceed if you have purchased an online auction item at an event and are not receiving it? I understand that it’s a donation, but it seems wrong to not deliver. Is there a length of time that is appropriate?
Tanya, the first step is to call the nonprofit running the auction and find out. Perhaps they also listed some guidelines in their online auction terms. But personally, I can’t think of any of my clients that have taken more than a month to get the item to the buyer.