5 Silent Auction Rules and Guidelines to Know (+ Template)

Picture this: You're hosting a silent auction and everything is running smoothly... until you let guests know they have ten minutes left to bid. After the announcement, one guest approaches your team and asks to remove their bid on a high-value item. What do you do?

With a good understanding of your silent auction's rules and general best practices, you can handle situations just like this. Sure, some rules may make you unpopular when you enforce them. But in the end, most of your bidders will appreciate your consistency and quick response and feel safer bidding as a result.

We'll discuss five helpful rules and best practices to outline before your next auction to set you up for success. Let's dive in.

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Essential Silent Auction Rules for Fair Auctions

It’s important to be clear and upfront about how your auction will run so all attendees can participate on equal footing and feel comfortable placing bids.

Every organization has its own spin on how it runs auctions, so there aren't any standardized rules. However, here are five categories to consider when outlining guidelines for your next auction.

1. Bidding Rules

With today’s technology, there are many bidding challenges that can be mitigated by simply choosing the right mobile bidding software. Top auction solutions help you enforce bidding rules automatically by preventing guests from:

• Placing bids with bad handwriting, raising the wrong paddle, or writing down the wrong name. With auction software, guests can submit bids on their phones, computers, or tablets—no handwriting required.

• Bidding in incorrect bid increments. Silent auction software won't allow guests to place a bid under an item's minimum bid increment.

• Stealing bid sheets. This is one of many reasons that bid sheets, in general, should be avoided. When you don't have bid sheets because bidding happens digitally, they won't be stolen.

• Canceling bids. Make it clear that all bids are final before the first bids are entered, and your silent auction software will enforce this by not allowing a bidder to remove their own bids.

• Being surprised by final bidding announcements. Your platform might have a countdown timer to keep guests aware of closing times and drive participation until the final few moments.

However, there is also expected participant behavior that can't be mitigated using software. To make sure every guest understands and follows a fair bidding process, set silent auction rules about:

• Paying for items bid on.
• Providing accurate contact information.
• Minumum starting bids.
• Unclaimed items. 
• Unruly behavior. 

Outlining these additional bidding guidelines will bring much-needed order to your auctions. With these silent auction rules, all your guests can be sure that everyone else is following the same bidding procedures they are. This can make them feel secure, and maybe even competitive, when placing bids.

2. Auction Item Guidelines

While bidders are contributing to a charitable cause, there's still a monetary exchange involved. This means your guests aren't the only ones who need to follow silent auction rules! Your nonprofit should also establish and share seller guidelines to maintain transparency and earn your bidders' trust. 

Set guidelines relating specifically to items, as well as to the donors more generally. For example, you might set the following silent auction rules:

• All item descriptions should be true and accurate. This includes both descriptions and photos. Be sure to report any flaws, alterations, or damages to bidders. 

• You will establish the fair market value of auction items to the best of your ability. There is a chance that those who donate items might overestimate the items' market value, since they can use that number for tax purposes. Do your research! 

• You won't manipulate the bidding process. This includes placing bids or causing bids to be placed with the express purpose of artificially inflating the bid price of an item. 

• You will honor the transaction contract. This includes accepting payment for auction items that are won and delivering all auction items paid for. 

• You will provide a receipt of purchase. All winning bidders should get a receipt at the end of the auction that lists all purchases with the fair market value of each item vs. the purchase price. The receipt should also identify you (the nonprofit) as the seller.

When it comes to sharing these guidelines with your auction item donors, clear communication is key. Effectively communicating these guidelines ensures everyone is on the same page and helps prevent any misunderstandings down the road.

Start by providing a clear, concise document that outlines your expectations for item descriptions, fair market value, and bidding processes. This not only sets the standard for transparency but also answers common donor questions, such as how to report an item’s condition or determine its value. Be sure to explain the purpose behind these guidelines—your goal is to maintain integrity and create a positive experience for bidders and donors alike. By doing this, you’ll foster trust and professionalism, which are key to a successful auction.

3. Legal Considerations 

There is a ton of gray area around legal compliance for auctions as there aren't major laws dictating how your auction should function. However, you may run into state-specific tax rules.

We can't provide the rules for each state here, but there are a few specific tax considerations that can be helpful to research before planning your auction. For example:

• Will you be required to charge sales tax?
• Is sales tax charged for all items or only some?
• How is sales tax handled for bundled items?
• Are items purchased by bidders tax-deductible?

Since these answers aren’t always straightforward, do not tell bidders that their purchases are tax-deductible. Instead, you can tell them that any purchases above the fair market value of items may be deductible and advise the bidder to consult with a tax advisor.

Another legal consideration to keep in mind is setting age restrictions on certain auction items, such as alcohol, overnight trips, tobacco products, etc. While these can be competitive items, you don’t want to get into any legal trouble by allowing a 17-year-old to win them!

4. Silent Auction Checkout Rules

Let's be honest, the last thing you want is to reach the end of a long auction event and be staring down a long line of winners waiting to pay for their items and leave.

Mobile bidding software will drastically improve the checkout experience, as guests will be able to check out directly from their phones once the auction is over. However, you should also set a few silent auction rules to speed things up, such as:

• Credit cards must be on file before bidding. Several years ago, we saw much more push-back from guests on this. But today, we don't see that at all. Most guests now realize that adding a card will allow them to pay from their phone or bypass checkout lines altogether. They are more than happy to provide a card on file to avoid a post-auction wait.
• Staff and volunteers must be equipped with tablets. Do you have any loved ones who still use flip phones or don’t know how to work their smartphones? Probably. Strategically station staff and volunteers equipped with tablets around your auction space. They can tell guests without smartphones which items they've won and for how much. 

• Items should be numbered for quick distribution. Assign each auction item a number and train your crew to find items based on this system. Then, guests will give their number at checkout to receive the item. We recommend keeping it simple, such as assigning all gift certificates a number in the 100s, all physical items a number in the 200s, all bundles a number in the 300s, and so on. These categories help your team grab the correct item fast. 

• Guests must show that an item has been paid in full. Before you send a volunteer running for an item, ask guests to show you the PAID IN FULL invoice on their phone. Not only will this show you that the item has been purchased, but it'll give you the code for the item. The last thing you want to do is to send a volunteer off to grab a large grill and have them drag it up to the checkout only to realize that the guest won a grilling gift card, not the heavy home item.

5. Opening and Closing Times

When guests first sign up for your auction, let them know exactly when bidding opens and closes. This helps guests organize their schedules and can be especially helpful for your virtual auction attendees.

Make sure to finish your auction strong by providing your guests with a closing time warning, too. This can drive extra revenue from last-minute bids and give guests an extra heads-up. 

At in-person auctions, you can make a verbal announcement that bidding time is closing, but make sure to send text or push notifications as well to ensure everyone receives the message. For fully virtual auctions, you can stick to the text and push notifications.

Try to avoid extending auction close times, but if you must, give all bidders sufficient notice. Nothing frustrates a bidder more than to think they’ve won an item but find out the time was extended… and someone outbid them!

Best Practices for Using Your Silent Auction Rules

Outlining a few guidelines before your auction will create a strong foundation for the event and give you a plan in case roadblocks occur. 

But what about taking your auction to the next level‚ hosting a truly successful, fundraising-goal-surpassing, guest-impressing event? Consider incorporating these best practices into your planning.

Understand Your Software’s Terms

Before diving into any auction, it’s crucial to familiarize yourself with the terms of whatever software you’re using. Each platform has its own set of rules, and knowing these can help you avoid potential issues down the road. In this section, we’ll use Handbid as an example to highlight what you should look for when reviewing your software’s terms.

All Handbid clients (including bidders!) are required to agree to our bidder terms and conditions when they register in our apps or online. While few probably read them, they provide a detailed description of the mobile bidding company's role in a transaction, the charity's role and obligations as the seller, and the bidder's obligations as the buyer.

For example, here’s what our terms of service state for both bidders and sellers:

• Bidder Terms: “By placing a bid on or offering to buy any Good, you irrevocably agree to pay the Total Purchase Price for the Good if you are the successful Buyer. Once you place a bid or offer, you may not cancel it. Each successful bid or offer creates a binding obligation on you, as Buyer, enforceable by each of Handbid and the Seller, to pay fully and promptly all sums due and perform any other conditions of completion concerning the applicable sale.”‍
• Seller Terms: “You (the Seller) will describe all Items offered by you truthfully and accurately. This includes text descriptions, images, and pictures of each Item including, without limitation, its physical condition, age, authenticity, provenance, and any other relevant data. All known or suspected modifications of the original Items, including damage or wear and tear to Items, must be clearly disclosed on Handbid. Additionally, the information in your listing must not be misleading, either through misstatement or omission.”

Essentially, this means that if a bidder places a bid and wins, they are obligated to buy the item, while sellers must ensure they provide accurate and truthful descriptions of their items. 

That said, you may also be bound by seller guidelines or an Acceptable Use Policy (AUP) outlined by your mobile bidding software provider. Even if you only quickly scrolled past it when not-actually-reading the Terms and Conditions, you should look over these policies to ensure you follow the software provider’s rules. 

All of these guidelines are there to increase participation, maximize revenue for our customers, and minimize potential disputes.

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Encourage Bidding Wars

Setting starting bids and bid increments is more of an art than an exact science. If bid increments are set without consideration and calculation, this could lead to reduced engagement. 

To facilitate a fun event and reach your fundraising goals, however, you want to start a bidding war. Make sure to do this thoughtfully by considering what increments will attract the most attention. In most cases, this means setting bid increments as low as your nonprofit can bear. Here’s how you figure this out: 

1. Set your starting bid to 30-40% of an item’s fair market value (FMV).
2. Decide how much revenue you need using this formula: [Bid Revenue] = [FMV] – [Starting Bid] 
3. Divide your bid revenue by the number of bids you want: [Bid Increments] = [Bid Revenue]/[Number of Bids]

Don't be afraid to play around with this formula and adjust the exact totals you get from it. Ideally, your bid increments should be low enough that they drive additional bids while still making sense for the item based on its value.

Have a Plan for Removing Bids

Most mobile bidding software (including Handbid) makes bidders confirm their bid before they place it, so the situation where a user "accidentally bid” on the wrong item should not happen often. Of course, we realize you will have a situation from time to time when a nervous bidder who just bid $1,000 on an item wants it removed and your "congratulatory jokes” aren't going over well with them. That said, your nonprofit should still have a plan in place for if the situation comes up.

If a guest asks to remove a bid, here are three options for how you might respond:

1. Remind them that bids are final. It's best to understand why a bidder no longer wants to bid on an item. Understand that in most systems (including Handbid) a bid is a binding agreement to purchase the item at that price. Do not be quick to accept excuses such as "I no longer want it,” or "I called my spouse, and they want to kill me.” 
2. Encourage them to wait it out and hopefully get outbid. In many cases, someone will outbid them, and the problem is solved, especially if the auction is just getting started. Assure them that there is plenty of time and let's just see what happens. If your auction is closing soon, offer to revisit it with them.
3. Remove the bid (avoid this when possible). Ultimately, it is up to you, and you don't want an unhappy bidder. Feel free to remove the bid if you can get the second place bidder to agree to be the current winner. Otherwise, you may want to handle those situations on a case-by-case basis.

Do you have a bidder who often wants their bids removed? Some systems, like Handbid, allow managers to put a spending limit on those bidders to protect the organization from a bunch of deleted bids at the end of the auction.

Get Guests to Register Ahead of Time

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While some auctions are equipped to handle a few last-minute sign-ups, you can save your team a major headache by encouraging guests to register in advance. By doing so, you'll be able to:

• Create a faster checkout process. Checkout lines can turn into a bottleneck if your auction team isn't prepared. Have guests register a credit or debit card on file before your auction. That way, they'll be able to pay quickly, pick up their items, and move out of the way for other guests picking up items.‍
• Train your event team. Your event team is likely composed of staff members and volunteers. But how do you know how many volunteers to recruit? When your guests all register in advance, you'll know how big your audience is and can recruit and train the right number of volunteers to meet your guests' needs.

‍You can speed up the registration process for regular auction attendees by using a platform with universal accounts. Then, when previous guests sign up for events in the future, they won't need to re-enter their personal or financial information and can get straight to bidding.

Example Silent Auction Rules Template

Example Silent Auction Rules Template

Once your team decides on which rules to uphold, make sure your attendees receive the written rules prior to the event. We’ve got a template ready for you below, but feel free to make adjustments based on your nonprofit’s unique needs:

X’s Silent Auction Rules

1. To participate in bidding, each attendee must agree to all event rules and regulations. By completing your registration for the event, you are agreeing to these regulations.
2. [Name of organization] reserves the right to withdraw or add auction items without notice.
3. A credit card must be placed on file prior to the auction. Payments for items purchased must be paid in full on the night of the auction.
4. Minimum bid increments are $___, unless otherwise stated.
5. Bidding will close following an X-minute warning.
6. The silent auction will close at XX:XX p.m. Once the auction closes, additional bids will not be accepted or valid.
7. The highest qualifying bid within the bidding guidelines at the close of the auction will be declared the winning bid for each item.
8. All bids are final. No bids may be altered or removed before or after closing time. 
9. All sales are final. Exchanges and refunds are not permitted. No item may be redeemed for cash. An item’s safety and security are the winning bidder’s responsibility once claimed.
10. Auction item value listed is based on FMV (Fair Market Value). Unless noted otherwise, items have not been appraised.
11. [Name of organization] will honor the transaction contract and provide proof of purchase.

Wrap Up

Though silent auction rules are often more guidelines than anything else, they can help your event stay on track and form an agreement between you and your guests. These guidelines, partnered with a few silent auction best practices, can help take your next event to the next level.

For more help planning your next stand-out silent auction, check out these resources:

• 50+ Must-Have Silent Auction Items for Your Next Event. Need inspiration for bidding items? Look no further! These ideas are sure to be a hit at your next event. 

• Silent Auctions: The Complete Guide for Smarter Fundraising. Interested in running a silent auction? Learn the ins and outs of auction planning in this comprehensive guide.‍
• 15 Best Silent Auction Software Options for Nonprofits Today. Online and silent auction software can transform your auction for the better. Check out these top providers.