You’ve seen the commercials for companies like Quibids and Beezid: Win an iPad 3 for just $36.43. That’s more than 90% off! With deals that good, who wouldn’t try?
Penny Auction Sites have become very popular in the past ten years. The concept is fascinating and addicting as well.
Every time you bid, the item you are bidding for goes up one cent. Each item has a different timer from five to thirty seconds. Every time someone else bids on the item, the timer will be reset to the original time. When everyone stops bidding for the item, the timer expires, and the person with the last bid wins the prize.
For example: Tim is interested in a Macbook Air. The timer is set at 15 seconds so every time he or someone else bids on the item, the timer resets to 15 seconds. Being very patient, Tim is able to win the brand new Macbook Air for $124.88. What a deal, right? Not necessarily.
What penny auction sites fail to acknowledge is the bidder must purchase ‘bid packs’, certain amounts of bids for a specified price. For example, 100 bids might cost you a heart-breaking $50. From our example, let’s say Tim purchased 1,000 bids for a discounted $400 (the more you buy at one time, the cheaper it is). To win that item, Tim used 900 of his purchased 1,000 bids. At 40 cents a bid, Tim spent an additional $360. In total Tim spent $484.88 for his Macbook Air. In this venture, Tim came out on top since Macbook Air’s currently retail around $1,200.
Not everyone is as lucky as Tim, though. What about those bidders that lost to Tim? If they used as many bids, they just spent a hefty $360 and now have nothing to show for it. Realize there are on average seven to twenty different people fighting for the same item depending on how expensive that item is. Your chances of winning are greatly decreased because of it.
I have personally tried penny auction bidding. It was a very exciting and addicting experience. With $60 worth of bids, I was able to win a paper towel holder, a $10 Walmart gift card, and two $15 Subway gift cards. The total value of all my wins? About $50. Even with all my ‘loot’, I still didn’t come out on top, losing ten dollars in the ordeal.
If you currently do penny auction sites or are interested, please be very careful. Before you know it, you will have spent hundreds of dollars on a product you won’t even get to take home. 9 times out of 10, it is cheaper to simply buy the product at a retail store.