But Saturday Auction in Blackminster says it has done nothing wrong.
The flag has now been removed after a visit from the police.
Johanna Anderson saw the flag on her way to the nearby spinning and weaving shop FibreHut.
“I pulled up on the car park, looked up and thought ‘wait, what?’,” she said.
“Someone I know came over and I had to ask if she was seeing the same thing as me. It was overlooking the car park and pretty hard to miss.
“I have an elderly Jewish friend I meet there and was glad she wasn’t there that day as her family were killed in the holocaust.
“It turns out the flag had been there a week already – she had seen it and had reported it to the police.
“I don’t have family that were directly impacted but seeing it had a strong emotional impact on me. If it was in a museum it would be different but this was completely without context.”
Johanna, who lives in Cheltenham, said the auction house was shut so she emailed the business asking them to remove the flag.
In response she had an email from senior auctioneer and valuer Trevor Williamson, who told her: “There are always two sides to consider.
“Without argument the Nazi flag is divisive but remains as a stark reminder of the darkest and most abhorrent period in human history, a period that should not be forgotten and never repeated.
“This particular article is of significant importance as it was captured by British troops during the Second World War, and in this context represents victory over fascism.”
He told us: “We have done nothing wrong. We were not glamourising or promoting Naziism in any way.
“Why should I have to justify myself just because we live in a woke society?”
He also said the intention was not to upset people.
In a statement, Saturday Auction said: “We have been instructed to sell the flag as part of an estate sale in the usual manner. As auctioneers we act as agents and do not uphold or subscribe to any political movement or regime.
“It’s regrettable that the action of temporarily displaying the flag has caused offense. We have replied to the five persons who have raised objection and advised that the flag has been removed.
“There are two sides to the rationale to consider here; On one hand and without argument, the Nazi flag is divisive but remains as a stark reminder of the darkest and most abhorrent period in human history, a period that should not be forgotten and never repeated.
“On the other, this artefact is of significant importance having been captured by British troops during WW2, and in this context represents victory over fascism.”
A spokesperson for West Mercia Police said: “On Sunday, September 3 we received a report of a business on Blackminster Business Park in Evesham displaying an offensive flag.
“Officers visited the business on Monday and after discussions with the owners the flag was removed.”