The biggest name in online auctions found that “individuals associated with PWCC” had engaged in prohibited practices to drive up prices.
The largest cosigner and seller of trading cards on eBay, PWCC Marketplace, has had its listing and selling privileges restricted by the online auctions superpower. On Tuesday, eBay announced that PWCC had engaged in a practice known as shill bidding, a form of price and market manipulation that the platform expressly bans.
Since 1998, PWCC has provided a trusted service for selling trading cards. Sellers frequently send their cards to be held in the PWCC vault. Then, they would decide when they would like PWCC to sell those cards. Often, after an athlete breaks out into superstardom or records record-breaking performance, sellers will ask PWCC to auction select on-hold cards in order to maximize return.
As Darren Rovell of The Action Network notes, PWCC completed over $150 million in trading card transactions in the last year on eBay, and is in the midst of an FBI investigation into card-doctoring dating back to 2019. In late July, they announced the sale of what is currently the highest-priced football card of all time, a 1-of-1 Patrick Mahomes Panini National Treasures rookie card, for $4.3 million.
What is Shill Bidding?
“Shill bidding” involves multiple users placing a bid in an auction without the intention of actually purchasing the item. Rather, it’s meant to create the appearance the card is more valuable than its “real” market price range.
For years, there had always been a suspicion that some of the major trading card, collectible, and memorabilia sellers on eBay participated in shill bidding, but critically, it’s not all that difficult to spot an auction that’s victimized by the practice.
Subscribe for the biggest stories in the business of sports and entertainment, daily.
For example: Let’s say Card X is graded as a PSA 10 and has tended to sell for around $1,000 — but you see that the current bid on eBay is $1,500.
At that point, you’re likely looking at multiple editions of that card listed at lower “Buy it Now” prices of $1,200 or $1,300 in the same grade from the same seller. At that point, a committed buyer may only (1) purchase those “cheaper” options via Buy it Now or (2) accept an artificially inflated auction price.
Now, let’s say this keeps happening again and again within and around one specific seller. Eventually, what’s happening can no longer be considered a coincidence or simply “the market” at work.
The big sellers on eBay usually work off of a consignment model, and it’s obviously beneficial for both the seller and consignee when a card goes for an above-market sale price. But to say nothing of a buyer’s satisfaction, the systemic, artificial inflation of auction prices for reasons other than good-faith bidding isn’t permitted at reputable outlets.
And the tools for weeding out such tactics are only going to grow more sophisticated as the market for cards and collectibles expands.
This could be the first of several penalties for prohibited practices, as eBay is serious about becoming (and staying) the biggest, most trusted marketplace for trading card transactions. The company has already made major investments in the trading card space in 2021, as they’ve recently added a price guide feature that tracks previous sales for a given item over the past year, giving hobbyists and investors alike clear reference points for their grails.
So, does this major decision validate eBay as a trusted marketplace for sports trading cards, or do we not yet know the whole story? There could be other shoes to drop.
UPDATE 5:30 PM: PWCC Marketplace has issued an official statement in response to eBay’s claims and actions:
“PWCC is considering all available legal options in response to eBay’s defamatory press release and its bad-faith action to restrict PWCC’s privileges on eBay,” the statement reads. “PWCC has only just learned of these allegations and eBay has refused to share any details supporting its allegations.”
