Arizona Treasure Hunt Auctions: Finding Valuables Among the Thorns
Why do you go to auctions?Is it because of the prospect of finding treasure or valuables previously undiscovered?This article talks about treasure hunt auctions and how some people get lucky - and why most don't.Specifics may vary from auction to auction; however, the following information includes helpful and important guidelines from which everyone can benefit.
A recent newspaper story spoke of a man in New Mexico who purchased a drug smuggler's forfeited car at a police auction.When the man removed the center console to fix the emergency brake, he discovered almost 10 pounds of cocaine.The police were embarrassed and the story made the national news services because of its amusing insight into the practice of police auctions.However, any person familiar with auctions would not be particularly amazed because it is the nature of auctions to find surprises amongst the auction purchases.
Unlike the cocaine that made it through the auction process and into the hands of the unsuspecting buyer, most auction surprises are actually discovered by the auctioneer prior to the sale.In fact, it is the auctioneer's job to prevent auction surprises because surprises mean that an auctioneer did not bring the maximum amount of money for selling the seller's merchandise.(Not that I am suggesting the auctioneer should have sold the cocaine in question.) A box of stuff with an undiscovered treasure buried in it does not bring nearly as much money as the box and treasure sold separately.
It is not at all unusual to find valuables hidden amongst the large amounts of household items in estate sales.People will hide valuables amongst clothing in a dresser or will wrap up antiques and place them in boxes of old clothing for safekeeping.To a lesser degree, the same trend in hidden treasures occurs in business liquidations where valuable items get thrown into boxes with lower value items.
The difficulty for an auctioneer is how much effort should be expended to discover these hidden surprises.An auctioneer cannot expend huge amounts of employee time looking through every box.The auctioneer needs to weigh the likelihood of something valuable being present.A working class household or tired small business is unlikely to have many hidden away treasures.
These hidden and unknown treasures are one of the most powerful incentives for employee theft.In retail the down of stealing from your employer is that the next inventory will catch the theft.An auction employee can steal an unknown item and it is likely neither the buyer nor auctioneer will ever know the theft has occurred.This is a stiff test of an employee's moral fiber.(How many of us would unfailingly behave in a moral fashion is we knew we would never be caught?) Don't allow employees to work alone when logging in unknown merchandise.Have at least two or three employees work closely together.Have supervisors poke around in stuff when it is received so employees are not sure whether at surprise has been discovered or not.
What if a seller gives you a box of merchandise and asks you to dispose of it.A cursory search of the box reveals something valuable contained in amongst the stuff.What are your obligations as an auctioneer?The auctioneer has a fiduciary responsibility to work in the best interest of the seller and would in breach of the contract if the auctioneer took advantage of the seller's oversight.
It is not only the job of the auctioneer to find the auction surprises but also to prevent people from intentionally creating auction surprises.People setting up an auction will sometimes salt a box of merchandise with something valuable and then outbid others who take the box at face value.One reason many organizations do not allow employees to bid at auction is the temptation to create these salted lots.One government auction had government employees bidding on boxes of outdated computer cables and when the employees won the bid, they removed new motherboards buried under the cables and then threw the box of cables in a nearby dumpster.
If an auctioneer allows auction employees to bid at their auctions, they need to take precautions to prevent this type of behavior from their own people.The temptation can be strong for even your best employees.Requiring employees to declare in advance what items they will be bidding on and inspecting each item during the preview can go a long way to prevent this sort of behavior.(Auctioneers are often warned to not let their employees bid at auction to prevent just the sorts of problems discussed above.However, auction employees could just as easily salt a lot and then let a bidder purchase the item for them.Allowing employees to bid openly as least keeps the honest employees honest.)
Surprises will always be one of the attractions of auctions but if the auction firm is doing the job right the surprises should be few and rare.
About the Author
Deb Weidenhamer is CEO of Auction Systems, the Southwest's most active auction and appraisal company.
Check out our website for the next scheduled Arizona treasure hunt auction or call 800-801-8880 for more information.
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