Auction glossaryShill Bidding Definition: Fake Bids That Push Prices Up
Shill bidding is placing fake bids on an auction lot to drive up its price, done by the seller, the auction house or someone acting for them. The shill has no intention of buying; the goal is to make real bidders pay more. Auction platforms prohibit it, and it's widely treated as fraud.
How does shill bidding work?
Say a lot would naturally sell at $80. A shill keeps bidding against you, from a second account or through a friend, until you're at $150, then stops. You win, but pay $70 more than real competition would have cost.
Is a reserve price the same as shill bidding?
No. A reserve price is an open rule: the lot shows whether its minimum has been met and simply doesn't sell below it. Shill bidding is hidden and fakes competition that doesn't exist. Our guide to shill bidding covers the warning signs.
How does Auktia stop shill bidding?
Shill bidding is prohibited on Auktia, and accounts tied to the seller (auction house) by the same device, card or address are blocked. More on how Auktia keeps auctions fair.
Questions people ask
Is shill bidding illegal?
It's widely treated as deceptive and can be unlawful; rules vary by state. In Texas, auctioneers are licensed by TDLR, which takes complaints about licensees.
How can I protect myself from shill bidding?
Set a max bid based on what the lot is worth to you and don't chase past it. A shill can only push you up to your own limit.