Should online storage auction sites require you to provide a credit card to be able to bid? What do you think?
HomeGrownPromos responded: I'll answer this here..
Yes... and the why...
Online storage auctions will draw a crowd from a much larger geographic than just the local people. For you and virtualstorageauction.com, this is a huge selling point for storage facilities.. "We require a credit card payment at the close of the auction, ensuring that you get paid for the sale of that unit..." This way, if someone in Philadelphia bids on a locker in upstate NY, Connecticut, Texas, California.. The storage facility gets their money in advance, the winning bidder has to make his or her arrangements to clear the locker or lose it.. If the room doesn't clear out, the facility can relist it and effectively double down..
The other side of the coin..
Someone wins the bid, pays via credit card. They can't or don't clear out the locker, lose their money and they file a dispute with their bank. You may or may not win that dispute because there's no precedence.
Travis responded: Yeah, good argument.
I think that requiring credit cards upfront has advantages and disadvantages.
Advantage - less chance a bidder will not pay.
Disadvantage - some users don't feel comfortable providing their credit card info just to bid. Some don't have a credit card or prefer to use cash.
VirtualStorageAuction.com is set up to process payments through PayPal; however, we have this feature disabled at this time until all the legal issues are worked out. A lot of states require the sale to take place at the facility. If someone pays online, technically the "sale" (the actual exchange of funds) didn't occur at the facility. I know, it's a lot of legal mumbo jumbo and hopefully it will all get worked out in the years to come.
HomeGrownPromos responded: Interesting..
There's gotta be a way to not require the credit card info up front, before the bid. To hook bidders.
Wonder if there's a way to have the facility process the payment? Perhaps you offer to cover their processing. That's the reason why these facilities don't like to accept credit cards for auction payments. This way the facility is processing the payment, circumventing the law? Or, you collect a deposit on the unit via Paypal/credit card and the facility cleans up the rest of the payment on premises?
Alloro responded: Yes, if for no other reason than to prevent fraud and shill bidding.
Travis responded: I don't believe requiring a credit card would prevent fraud and shill bidding. Most people have multiple credit cards in their name as well as their spouse's name. Not only that, one could easily purchase pre-paid credit cards and create multiple accounts.
We haven't seen a problem with fraud and shill bidding yet, but we are actively monitoring for it. If we do come across it, we will block the user from using the site in the future.
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April 04, 2015, 06:30:52 PM