The Truth About Penny Auction Sites (Yes, There’s A Catch)
Penny Auction Sites such as Quibids, BidPit, Bid Cactus and BeeZid claim to sell hot electronics such as laptops, Playstation 3, Xbox, flat screen tvs, Dre Beats headphones, iPhones, iPads and more for pennies on the dollar. An iPad for $50?! A big screen TV for $15.44?
What’s the catch? It sounds too good to be true!?
In a nutshell, Yes, There’s a Catch.
Generally speaking, I don’t ever recommend Penny Auction sites because they’re not regulated and people don’t realize they’re paying more for an item than it appears. You have to buy bids in addition to the low ending auction price, and many people bid and don’t win anything. Some Penny Auctions have better terms, such as allowing you to reuse bids and offering free bids. But, I still don’t recommended them because I don’t believe Penny Auctions are what they seem. I wrote about this briefly last year, but thanks to fan Brenda for reminding me to make this official in a full explanation. Here’s why I don’t recommend them.
The catch is that you have to pay for bids. Even if you won the auction for 83 cents, it’ll cost you hundreds spent on bids to get there.
Wait. What? Let’s say you spend $50 in bids and bids cost you $0.50 each (easy math, and since bids cost anywhere from $0.50 to $1 each, it’s accurate is some cases). Bidding on these sites varies, but on the best stuff (such as hot electronics), you could easily blow $50 in less than 5 minutes of bidding AND NOT WIN. Big ticket items such as iPads and big TVs end after getting thousands of bids. The site earns 50 cent for each of those bids. One auction I saw had more than 5,000 bids. That means people spent over $2,500 and of the hundreds of bidders, only one of them won. I can’t even imagine how much they spent to bid on it.
This is just my opinion, but I work hard to ensure that your personal info is safe when you’re finding freebies and deals through my website. I started the famous GimmieFreebies List of Fake Freebies, to keep you safe. I personally check every offer before I post – warning you if there’s any potential for scam.
Yahoo! News gives the following example:
I bought $60 in bids and got in on an iPad auction. I bid occasionally, trying to time it when the counter neared zero, but I quickly blew 40 bucks in bids. Someone always jumped in at the last second, usually someone using the automated bid setting. So I signed up for automated bids myself, and I was amazed. My $20-worth of remaining bids flew out in 24 seconds. And I didn’t win. My 60 bucks was goners! In fact, I watched the most aggressive bidder make 30 bids a minute for 2 more hours until the auction ended. 3600 bids, at a minimum 55 cents a bid. That’s $1980 for a device that costs retail $499, and that guy didn’t even win!