When a silent auction winner doesn't pay

The auction closed, the totals looked good, and three weeks later four invoices are still outstanding. It is one of the most demoralising parts of running an auction, partly because it happens after everyone has stopped paying attention.

It is also mostly solvable, and mostly preventable.

Part of the complete silent auction guide. The prevention is largely in silent auction checkout.

Why people don't pay

Almost never malice. In rough order of frequency:

• They forgot. The notification arrived during dinner, they meant to deal with it later, and later did not arrive.
• The email went astray. Filtered, buried, or sent to an address they do not check.
• Paying was awkward. A link that didn't work on their phone, a login they didn't have, or a "bring a cheque to the office" instruction.
• Bidder's remorse. They got carried away and now regret it. Rare, but real, and it needs a different conversation.
• Genuine hardship. Also rare, also real. Handle it privately and generously.

The first three are the overwhelming majority, and all three are process problems rather than people problems.

The reminder sequence

The sequence is deliberately front-loaded: a reminder arriving while the win is still recent competes with far less than one arriving three weeks later, when the auction has left the supporter's mind entirely. On 32auctions, winner notifications with invoice links go out automatically at close, and payment reminders to anyone unpaid can be sent with a single click.

The phone call converts far better than any email, and almost nobody makes it. If you have four outstanding invoices, four phone calls is twenty minutes. On which channel to use when, see text message reminders.

Getting the tone right

These people are supporters. They bid on something to help your cause. Treat the first several contacts as a service you are providing rather than a debt you are collecting.

• Assume the best. "Just checking this reached you — emails from us have a habit of hiding in spam."
• Make paying trivially easy. One link, works on a phone, no login.
• Be specific about what happens next. Vague deadlines get ignored. "If we haven't heard by the 14th we'll offer the item to the next bidder" is clear and not aggressive.
• Never shame anyone publicly. No lists of unpaid winners, no group emails.
• Offer an alternative. Some people are stuck on the payment method rather than the payment. Ask.

If someone has genuine bidder's remorse, releasing them and offering the item to the runner-up is usually the better outcome. An unhappy supporter who feels trapped costs you more over ten years than one unpaid invoice.

Offering to the next bidder

Runner-up offers work well and organizations under-use them.

1. Set the expectation up front. Your published auction terms should say that unpaid items may be offered to the next highest bidder after a stated period. See legal requirements.
2. Contact them personally. "The winning bidder wasn't able to complete their purchase — would you like the item at your bid of $180?"
3. Offer at their own last bid, not the winning bid. They already committed to that number.
4. Give a short window. Three or four days.
5. Keep going down. If the runner-up declines, try the next. Bid history is right there.

Handled well, this is a good experience: the runner-up gets an item they wanted at a price they chose, and you recover revenue you had written off.

When to write it off

At some point the cost of chasing exceeds the amount. For most community auctions that is somewhere around thirty days and a handful of contacts.

Write it off, record what happened, and move on. Note the person's name for next year — not to exclude them, but so that if the same person does not pay twice, someone senior has a friendly word before the third auction.

Then look at the pattern rather than the person. One unpaid invoice out of sixty is noise. Six is a checkout problem, and the fix is in your process, not your persistence.

Preventing it next time

Almost all of this is preventable, and the prevention costs nothing.

• Collect payment online at close. The single largest factor. Every hour between winning and paying reduces the chance of payment, and a winner who can pay from the notification usually does.
• Send the invoice immediately, automatically, with the item, amount and a link — not "we'll be in touch."
• Verify contact details at registration. A wrong email address is an unpaid invoice waiting to happen.
• Publish a payment deadline before bidding opens. Expectations set in advance are far easier to enforce.
• Require payment before item collection. Obvious, and routinely skipped at busy events. See item pickup.
• Make bids binding, and say so. In your published terms.

What this does to your reporting

Report gross raised and amount collected as separate figures. An auction that "raised $22,000" but collected $20,400 raised $20,400, and your board should see both numbers.

Track collection rate year over year. It is a direct measure of how well your checkout works, and it is the kind of number that quietly improves once someone starts watching it. See silent auction reporting.