Misc.

eBay’s Gets Tougher on Bid Retraction and Non-Payment Rules

Prices of assets rise and fall over time. That fluctuation in prices is part of what makes up asset classes. After 2020, it has become undeniable that the prior hobby of collectibles has matured into collectibles being treated as an alternative asset class. This means that money which may have been invested in stocks or bonds or property may end up in high-end sports cards, comic books, stamps, coins or even fine art.

As the evolution of collectibles has been seen, there are becoming more intense rules and focus that aim to protect the markets that underpin the buying and selling process. Sales at conventions and directly from dealers are generally considered to be final sales, but various policies have been changing within auction houses. Some private auction firms have begun a tiered process in a manner that might keep high-end auction items more exclusive.

Now it also appears that eBay Inc. is becoming more strict about bid retractions while reiterating its more firm stance of non-payment of auction items. This new policy may seem harsh and that it is heavily in favor of the sellers rather than being in favor of the buyers, but the buyers should understand that protection is needed on both sides of an auction for these to operate as they were intended and at the same time there is an alternative asset class taking shape.

Some of the buying and selling policies of eBay have been in need of change for years. These two newer policies should be fairly obvious considering that eBay is the effectively the world’s largest collective seller of items directly from seller to buyer within collectibles.

The evolution of trading stocks has routinely dealt with some changes, and some of these newer efforts will sound familiar to those collectors and collectible investors who are also familiar with stock trading regulations. Exchanges (and regulators) have become more active in policing bid spoofing and bid layering (and other practices) to counter against market manipulation. And also worth noting, and far more easily to prove, exchanges and brokerage firms have strict rules of busting trades or covering losses when it comes to non-payment by buyers.

eBay’s bid retraction policy change will apply to sports trading cards, non-sports trading cards, and to collectible card games auctions. Beginning on June 30, 2021, eBay buyers will no longer be able to retract bids on trading cards auctions without the approval by the seller. eBay’s new policy change is that the decision by the seller to accept or reject any auction bid retraction requests will then be final.

eBay explained how its bid retraction will take effect:

Starting June 30, if you want to retract an auction bid, you will need to contact the seller via messaging on eBay and request a retraction. The seller, at their sole discretion, will be able to accept or decline your retraction request. If the seller does not accept your request, your bid can still win or lose the auction, and you will be required to make payment on any winning bid you submit. We also inform buyers on our “Bid Retraction Policy” page that “a bid is a binding contract.”

The latest move also doubles down on items which have faced non-payment. As of April 2021, items can be considered unpaid by the fifth calendar day after he auction. The rules allow a seller to cancel the order due to non-payment, and eBay warned that regularly missing payments may impact buyers’ accounts.

Online sellers should have certain rights in a transaction. Many bids in auctions later come with buyers’ remorse, and some buyers try to either cancel their bids late in the game (or after the fact) or they hold off on payment for long periods of time. As the prices of collectibles had risen above-normal in many cases in 2020 and into 2021, the risk of having capital tied up for longer periods can greatly impact a professional seller’s ability to operate in the black.

Collectors and investors alike should continue to expect rules to change in the months and years ahead. Maturing from hobby to an alternative investment class automatically means that there is a lot more money at stake than there used to be. And with higher dollars at risk, the markets between buyer and seller will almost certainly continue to evolve with more rules and regulations just like traditional asset classes.

Categories: Misc., Non-Sports, Sports

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