As auction chairs and bidders ourselves, we have seen gift certificates won in auctions from businesses that unfortunately close prior to certificate expiration, which results in a winner being unable to redeem their prize. A few solutions we've gathered from longtime auction chairs include:
- Be very clear that silent auctions are donation-based. Include a statement in your auction program that winning bids are donations, and it is not possible for your organization to be responsible for the fulfillment of donations won (unless you own and run the company). Of course, you can do your best and due diligence prior to accepting any items, but ultimately you do not have control of the fulfillment company's actions. Most bidders, when the disclaimer is shared ahead of time, understand this and are fine with their money having gone to support the organization anyway.
- Provide an item from another company to give the winner instead. In other words, find a replacement prize. You may be able to ask another similar company to comp/donate a comparable, similar prize and offer to promote them with a special ad/announcement to your organization's followers in exchange. This opportunity to "outdo" a competitor is a great value proposition for many companies.
- Refund the bidder's money. You want to keep the bidder happy for future fundraising opportunities, so making sure they are happy, even if it means giving a refund, will yield better results long-term. For your organization, refunding the money would be the same as if the package never existed.