How to Keep No-Pay Bidders Out of Your Sale

Every seller who has run an auction knows the feeling. The sale closes and the top bull brought what you hoped. Then the winning buyer stops answering the phone. In a live ring the auctioneer and the clerk have the buyer in the building. In an online sale, the buyer registered from a phone somewhere, and what stands between you and a no-pay is what you set up before bidding opened.

Why Do Some Winning Bidders Not Pay?

Some are not real buyers at all. They registered under a made-up name to run a price up or to cause trouble, and they had no intention of paying. Some are real people who bid in the heat of the last five minutes and regretted it by morning. Some meant to pay and had a problem on their end, a bank hold or a hauling arrangement that fell through. And some misunderstood the terms, thought delivery was included or thought they had longer to pay.

The first group gets stopped at registration. The rest get handled with clear terms and a fast follow-up.

Should You Require a Credit Card on File?

Yes, for most sales. On our platform the card-on-file requirement is optional, and it is one of the most used options we have, because it cuts down on buyers who win and do not pay.

When it is on, nobody can bid until they have put a valid credit card on file. The card is handled by Stripe, so no card number is stored on your sale website. A buyer who planned to bid under a made-up name and walk away now has to put a real card on file first.

It also gives you something to collect with. Your sale terms can say that if a buyer does not pay by the deadline, you may charge the card on file. Whether you do that or offer the lot to the next bidder is your call.

Some sellers worry that a card requirement will put off buyers who dislike typing a card number into a website. One plain sentence in your bidding guide explaining why it is there answers most of that, and our sample bidding guide has it written.

How Does Email Verification Help?

Every new buyer on the platform has to confirm their email address before they can bid. Their account stays inactive until they click the link in the confirmation email. That one step stops throwaway accounts made with a fake address, and it means the outbid and win emails the platform sends will reach the buyer.

What Should Your Sale Terms Say About Payment?

Spell it out before the catalog goes live, because buyers accept your terms when they register. The payment section of your terms should cover:

• When payment is due. A set number of hours or days after the close.
• How you take it. Card on file through Stripe, check, wire, or some combination.
• A convenience fee, if you charge one. Card fees come out through your Stripe account. If you want buyers to cover them, turn on the optional convenience fee and set the percentage yourself. State it in the terms so nobody is surprised.
• What happens if the buyer does not pay. Charge the card on file, offer the lot to the next bidder, or relist it. Name the remedy in advance.
• When risk passes and when the animal must be picked up, with the board charge after that date.

Our sample sale terms have blanks for each of these. Fill them in, then have your own attorney look them over.

Put the terms where buyers see them before they register, and point to them again in the bidding guide. A buyer who read that payment is due in 48 hours cannot say later that they thought they had two weeks.

How Fast Should You Collect After the Close?

Fast. Winning buyers get an email from the platform the moment the sale closes. Call or email each one that day while the sale is fresh, confirm the total, and tell them how to pay and when the cattle can be picked up.

Your dashboard shows every winning buyer and whether they have paid. A card payment through Stripe shows up on its own. If a buyer mails a check, record it in the dashboard and the buyer shows as paid. Anyone still marked unpaid as the deadline nears gets a second call.

What Do You Do When a Buyer Still Does Not Pay?

Follow the remedy you wrote into the terms. If the terms say you may charge the card on file, you can. If they say the lot goes to the next bidder, your reports show every bid on that lot and who placed it, so you know who to call and at what price. If your terms say you may relist the lot, call us and we will help you put it back up.

Keep the bid records. The software logs every bid with the buyer, the amount and the time, and your terms can say that any dispute about a bid is settled from those records.

Does Any of This Cost Your Buyers Anything?

No. Registering and bidding are free for buyers, with or without the card requirement. The card sits on file with Stripe and can be used for payment if the buyer wins. The only charge a buyer sees is a convenience fee, and only if you turn one on and the buyer pays by card. The full list of seller controls, from the card requirement to payment status reports, is on the features page, and the FAQ covers the common payment questions.

Want to Talk Through Your Payment Terms?

Tom has run online auctions since 2007 and can tell you which of these settings other sellers turn on and why. Start the conversation here.