As some have suggested here, I decided to write a letter to the Club proposing a change in the Club auction rules. My suggestion would allow for minimum bids (quite a lot below market value) on consignments. I think this would be fair to all and would encourage the submission of very high-priced, unique chips that I know are not being submitted now due the prohibition of minimum opening bids (or reasonable reserves; I personally don't like reserves).

I am copy/pasting my letter here. Perhaps I'll get some good constructive criticism that I can use in the final version of the letter.

Before jumping on this letter, please consider that (1) some top-notch chips are not being submitted to the auction because of the anti-minimum bid rules (I know this as a fact), and (2) every top flight auction I know of (Christies, Sothebys, etc.) has reasonable reserves/minimum bids/whatever to protect consignors.

Here is the proposed letter:

"re: suggested change in club auction, starting in 2001

I propose changes in the club auction rules. The quality and size of the auction items might be nice now, and the auction may be the best chip auction in the world, and most may be satisfied with it, but that is beside the point.

We should have the best chip auction possible, and we are now far from achieving that because the current rule barring minimum bids surely keeps many of the best and most unique items away. Unlike our auction, in every major auction I know of there is a reserve allowed, or a minimum bid or a nominal buy-back commission charged the consignor.

My suggestions are contained the following copy of a post I made to a chip bulletin board (edited a little):

Regarding the Club annual auction, I wish people would calm down and reflect fairly on this. There is too much exaggeration, suggestion of impure motives in others, needling other members, digression from the main issue, setting up of straw men (issues) to knock over and self-interest.

The troubling current rules, introduced in 1998, are:
(1) very unfair to the consignor; and
(2) self-defeating for club money-raising. The club auction, nice as it is, is being deprived of rare, valuable, unique items it otherwise would have.

THE PROBLEM WITH THE CURRENT RULES:
The problem is that no minimum or reserve is allowed. The only way the consignor can protect his item from (in his mind) not archiving its value is for him to buy it in for himself (make a final bid) AND CONSEQUENTLY PAY THE CLUB BOTH A 10% SELLERS’ FEE AND A 10% BUYERS’ FEE.

I will give an example to show you how unfair this is. Let’s say I have an item that I think/hope is worth $1000:

Case #1 -- I think it is worth $1000 because I know others of the same chip sold for $1000. But in the Club auction it is bid up to only $475 because of a fluke, because most of the collectors who would pay $1000 for it already have the chip, because it has a small hard-to-reach group of collectors (European chip, mother-of-pearl, early token, etc.), who knows? We do know that auctions are not perfect. In the Club auction good things “slip by.” at times. So the consignor bids it in for $500. He has to pay a 10% buyers’ fee and a 10% sellers’ fee -- altogether a whopping $100. That is 10% of what he thinks the fair market value is ($100 divided by $1000 = 10%);

Case #2 -- Same facts as above, except let us say the consignor has made a mistake. He meant well, but the item is worth only $500. He does not know this and so bids it in for $500 as above. He must pay the Club $100. This time we can calculate the fee as 20% of the chip’s value (that is, $100 divided by $500 value equals 20%).

Either way, the $100 fee seems quite harsh.

I THINK THE RULES SHOULD BE CHANGED TO SOMETHING FAIR LIKE THIS:
(a) a consignor may consign items with no minimum bid,or he can leave it up to the auctioneer (or committee) to do as it pleases, minimum bid-wise. (Many or most will opt for this.)

(b) if the consignor insists on a minimum bid, the Club auctioneer or committee will agree with the consignor on an estimated value of the item, and the auction starts at a minimum bid of 66 to 80% of that value. If it does not get a bid, the consignor is charged a nominal amount (say, $5 plus the mailing cost to return it to the consignor).; and

(c) if the auctioneer (or committee) and the consignor can’t agree, and the consignor wants to list it anyway (with his minimum bid), and the auctioneer accepts the listing, the chip is listed with estimated fair market value (determined by the auctioneer), and the consignor pays the club 5% of the minimum bid if it does not receive a bid.

Robert"