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.
HI Sherry! I won an item from my alma mater’s online auction and the auction director says she put my winning item (a gift card for hundreds of dollars) in the mail. She didn’t think to send it first class or add a tracking number. That was over a week ago. If an auction item becomes lost in the mail, what kind of action should the winner take? I donate plenty to the school already, so excusing it away as “my yearly donation” doesn’t seem right.
This brings to mind a story I recall from an auctioneer who lives on the West coast. He was selling a grand piano in a live auction. The piano included “free shipping.” The auction team hadn’t considered that they’d have people attending from the East coast, and the buyer happened to live in NYC. Big shipping charge — and never again was the mistake made to include shipping without restrictions.
With your situation, have you talked to the Auction Chair about your disappointment or are you still waiting to see if the card arrives?
I think it starts with a conversation explaining that you have been a supporter, but that this would be more than you’re prepared to give this year. Then, give some options of what would resolve the situation in your eyes. For instance, they might try to get another card donated, buy a new gift card, or apply the value of the card in some comparable way, perhaps giving you credit to admission-driven activities they have at the school, such as sporting, theatre, or special events. It might be acknowledging you at a different level of support.
It depends quite a bit on the school (primary school? high school? university?), the gift card itself (is it something that can be “shut down” like a credit card, and re-issued?), true donor of the gift card (Was it really donated? Bought outright or at discount by a committee member? Part of a larger donation package, but then split up and sold individually in the online auction?), and what makes sense, given the physical locations of both parties.
Whatever the end decision, I anticipate that your story will become one of those expensive mistakes that the auction team makes once, with all future mailings being tracked.
Hi Sherry,
I have a situation and I’m not sure if this is normal or not and how I should go about it. I bid for a trip to Tuscany yesterday, and was outbid by someone. Paying 5K for the trip was my maximum investment, and a bidder outbid me by 400 dollars or so. When the auctioneer noticed I wasn’t bidding against the trip due to being outbid he said he was about to make the deal a lot better. He asked me if I would be willing to go in with the other bidder for the trip so I said yes. In that 15 second exchange, I was under the impression that he was asking if I would go in with the other bidder to each pay 50% of the winning bid ($5400). It seems stupid for thinking this way now, but by the way he said he was going to make the deal even better in my mind, it seemed like he was suggesting a discount. Now I am freaking out a bit because I am unsure of what I have actually agreed to. How can I navigate the situation? As I mentioned, I was outbid but then agreed to something else. 5K really was the max that I was willing to put to the trip and I’m feeling like I was slightly deceived in the exchange.
Hi Ashley,
There are several parts of this story that don’t make sense to me, but I’ll do my best to guess what is going on here.
My assumption is that the auctioneer was having you *match* the higher bidder.
(If the auctioneer actually said “go in with the other bidder,” that’s something else entirely. To my ear, that would mean you’d be traveling WITH the other bidder to Tuscany. I doubt that’s the case. I suspect you bought your OWN trip to Tuscany.)
My next assumption is that this is a consigned offering. Tuscany is a popular, common consignment item at fundraising auctions. Nonprofits can buy many of these trips inexpensively and sell them. My guess is that this is what you’ve bought. The charity secured a trip from any number of consignment businesses that offer them, and you happened to be one of the top bidders last night. (Sometimes the consignment company is listed as a “donor” in the auction catalog, although in reality, the charity is purchasing the trip from that consignor. Other times the charity gets a sponsor to underwrite the purchase of the trip from the consignor. I have an entire class on this as there are many consignors and there are multiple ways to work these offerings.)
Anyway, by buying these trips, the charity then has the advantage of selling multiple trips at its auction, thereby raising more money.
When selling multiples at an auction, the auctioneer takes two approaches.
1. The auctioneer attempts to get the back-up bidder (you, in this case) to agree to the higher winning bid amount. ($5400, per your story)
2. The auctioneer takes the top bidder DOWN to the back-up bidder’s last bid. ($5000, which you are stating is your last bid.)
It’s riskier to do the former, but the auctioneer will sometimes push it if he thinks he can get the back-up bidder to match the higher price. I’m guessing that is what happened here.
One of the elements that doesn’t make sense to me is that I can’t imagine a benefit auctioneer jumping from $5000 to $5400 in an increment. The logical increment would be either:
1. $5000 to $5100 to $5200 to $5300 to $5400, or
2. $5000 to $5250 to $5500.
Bids don’t typically move from $5000 to $5400. So if what you are remembering is correct, it makes me believe that either the auctioneer wasn’t a professional, or maybe the bidding was happening so fast that the numbers flew by, and you didn’t hear the $100 increments of $5100, $5200, and $5300?
Regardless, tomorrow morning call the charity and tell them that you’re prepared to pay $5k for that trip and need to verify that’s what you’re paying. I suspect that you surpassed the minimum required to sell the trip, so even if you only pay $5000 instead of $5400, you’d still be making a nice donation to the charity. I don’t think the $400 is going to be a deal killer; the charity wins AND you will have a fabulous trip. 🙂
Send me a postcard!
Yes it seems like I definitely need to reach out to the organization tomorrow morning to gain clarification. If in fact I did commit to buy the trip matching the other bidders price are there any other options I have if they would not negotiate down? I did a ton of research on the trip this morning, and the hotel that I would be staying in equals to about 150$ a night with average reviews. Its harder to warrant spending 5K on a trip that realistically cost about 900$ (flights aren’t included or anything else). But I also recognize that the purpose is to generate money and I can understand why they do that. In light of the scenario do you think I could offer to pay them a lower amount but also not take the trip? Meaning make a donation in lieu of buying the trip?
Thank you again for taking time to help me understand the situation. I really appreciate your time.
Ashley, if you committed to buy the trip, you buy the trip. Whether you use it or not is up to you. But you don’t renege on a $5k trip because you misunderstood a $400 match. The organization has now lost out on the opportunity to sell it to others interested.
Legally, you’re required to buy it. I just suspect the language around the doubling of the item was confusing which is where my comments stemmed.
I have an odd situation maybe you can help with. At a high-energy charity auction, a famous guest presenter (not the auctioneer) jumped up and offered a totally new package that he made up on the spot. It wasn’t in the brochure or anything. The crowd was pretty excited and someone bid a LOT on it and won, but when they got their package–it was just a single experience: a visit to a movie set. No airfare, hotel, etc. Now, it was silly to bid on something without knowing what it really was, but shouldn’t the nonprofit have gotten in touch with the bidder after the event to clarify what was offered/what they had bought? Every other package that went for this much include way more than a single experience. Any thoughts?
When this has happened at events I’ve worked, the charity typically follows up to get fulfillment information (such as contact information) from the presenter. But at that point, the charity has no need to know exactly what was offered. The presenter verbally presented the donation, the guest paid for it, and — at this point — the charity just needs to get details on how the buyer can fulfill the package that was offered from the stage.
What the other packages included and sold for is irrelevant.
We recently held a charity event which had a live auction portion. Someone bought a trip to A Villa and vineyard near Tuscany. The information was read clearly and the person won the bid for $6000. They were happy with the package and when told there would be another (same) package offered the bidder said he would take that package as well for another $4000 The bidder paid for both items. The next day he bidder said that his friend told him the golf course at the resort wasn’t good. He wants to get his money back and make a $2000 donation. We have told him that we lost a chance to sell the packages and we can not refund his money. He says he will contact a lawyer. Are we legally correct in keeping the bid/donation?
Gosh Larry,that’s a question for an attorney skilled in such matters. My understanding from working in the industry is that you’d be delving into UCC (Uniform Commercial Codes) to defend keeping the donation and would likely refer to your published auction rules, too.
I decided to donate to our communities silent auction to help raise money to fix up our local park. I donated 6 free cleanings from my small, single person cleaning business to the silent auction, however due to a family emergency I will be moving away to help family. Can I offer to pay the winner the money they spent on the donation, so they are not out anything or can I get into trouble if I am unable to complete the 6 cleanings? I want to do right by the winner but I am needed to help with my family.
That sounds reasonable, Teresa. I’d suggest you call the nonprofit first.
Is there legal action that can be taken if the winner is unhappy with this option? Just want to prepare for all different outcomes.
You would need to call an attorney if you want to get legal advice, Teresa. If it was me, I’d just start by calling the nonprofit. I have to say, though, that “legal action” is hardly the first thought that comes to my mind.