Why Not to Buy On Cruise Ships
March 2nd, 2009
With the growing trend of “Fine Art Auctions” on cruise ships throughout the world Fascination St. Gallery would like to offer some advice to collectors who may get caught up in the excitement of “Fine Art for Investment” in the high seas.
The first thing to know is that these auctions are performed in international waters. What does that mean to the buyer? No protection under United States consumer fraud and deceptive business practice laws. Yes, you are on your own.
The common scenario aboard these auctions is the hype and excitement generated by the auctioneers. From overly friendly auction staff to free flowing champagne, their job is for you, the collector, to lose any reservations whatsoever that would keep you from the frenzy and excitement of bidding against another collector and inflating the value of a particular work.
A couple of notes on the common bidding practices:
*Starting the Bid – Bidders are encouraged by auction staff to start a bid and in return they will receive incentives such as free works of art.
*Shill Bidding – This is the practice where a bid is started, an auctioneer will increase the bidding to a predetermined amount although no one is actually submitting those bids. A more common term for this is a Reserve Price. Most jurisdictions will allow shill bidding only if a Reserve Price has clearly been stated. As noted before, in international waters anything goes. Not only is this practice unethical it’s an outright lie and extremely misleading.
*Refund – A full refund will be next to impossible to get from the auction house. By signing on as a bidder, you have agreed to the sales terms which will normally be an auction house credit only, no refund. You may be able to negotiate a refund with a “restocking fee” which depending on the sale amount of the piece this restocking fee may be thousands of dollars.
Although a cruise offers many activities the fact is that there is only so much that one can do. This is perfect for art auctions since it gives passengers the opportunity to view pretty and “important or highly valuable” works of art. Coincidentally auctions normally take place near the ship’s casino, a great advantage to the auction house to have collectors, already having consumed their share of cocktails, in the frame of mind of hitting the jackpot or bidding a “great” price on a piece of art for investment. These practices are of no concern to the cruise line itself since auction houses are independent operations, the cruise line itself benefits greatly from the proceeds of these auctions though. With the fierce competition of low price tickets the money to be made is in the boutiques and shopping provided inside the ship.
Now that you are aware of these common practices comes the important part, consumer awareness and education.
*Value - If it sounds too good to be true, it is! If a high value piece of art, let’s say a Picasso, is “appraised” at $65,000, why would they offer it at $30,000????
*Authenticity – An auction house has countless suppliers and vendors whom they acquire their auction items from. Some suppliers are reputable and offer authentic works, some are not.
*Signature – Is a particular piece hand signed by the artist or estate signed? Many winning bidders come to the shocking realization that the work purchased has an estate signature, these are usually found in works after an artist has passed and the value of these works is considerably low.
*Presentation and Handling – A huge expense for these type of auctions who offer thousands of items a month is framing. If a piece worth tens of thousands of dollars is being offered, how is the work being handled? Does it look like it cost $50 to frame?
*Urgency – Art is an emotional buy, would you rush to spend $1,000 or $50,000 anywhere else? Would you buy $1,000 or $25,000 worth of stock without any kind of research or advice?
*Common Sense – If thousands of works by artists are being offered well below their appraised value, realistically what are the chances of those works appreciating in value?
It’s a great feeling of satisfaction to purchase a work of art that speaks to you and gives that “have-to-have” feeling. If you come across such piece walk into the gallery. Speak to an art consultant and inquire about the work and the artist. Although you may not purchase that particular piece you made a very important fist step, establishing a relationship with a gallery. An option we provide every single local collector is to take a piece home and live with it for a few days before committing to it, what better way of knowing if it’s a good fit than seeing in your own environment? This may not be a viable option with an out of state gallery but the key is to establish a relationship with a reputable gallery whether in your own city or out of state. We as a gallery are here to provide a service to you and want every single collector to be 100% satisfied with their purchase. We have not remained in business for over 20 years by one time only purchases. Repeat collectors keep us in business, this is only accomplished by service and it’s a service you should expect.
So before you take to the high seas and spend $100 or $50,000, does the deal sound too good to be true? What kind of service do you expect to receive after the purchase has been made?
Keep on Collecting,
Aaron LaPedis