ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to Avoid Bid Website Scams

Updated on March 26, 2017
Source

The almighty penny! The penny is getting weaker in this economy and may be heading the way of the Dodo bird, but penny auction websites are booming and seem to be here to stay!

There are those who believe that penny auction sites are a legitimate way to buy various items at great discounts and then there are others that exclaim....SCAM!

In order to decide if they are scams or not, we need to discuss exactly what a penny auction site is and how it works.

What is a penny bidding site?

A penny auction website is a site set up for people to auction or bid on different items of value. These items include, but are not limited to, electronics, small appliances, gift cards, clothing, and tools. This is a bidding fee auction site, meaning it costs money to place an actual bid, whether or not the auction is won or not.

How the penny site auction works.

The object of the penny auction site is to bid on items of value to try to win them.

An item is listed on the site, usually, for a starting price of $0 and a time limit is set for the sale of the item, a countdown timer keeps track of the time.

As the timer heads towards zero to indicate the auction is over, bidders then bid on the item, and as each bid is placed, the cost of the item goes by one penny for each bid placed. And, as each bid is placed the timer gets 15-20 seconds added on.

The bids keep coming and the timer keeps getting more time until there are no more bids and the timer hits zero.

Always read the fine print before bidding on anything!

The bidding process

Example auction:

An Xbox valued at $300 is up for auction and each bid cost $1 each.

The auction begins with the timer at 15 minutes and the price of the Xbox set at $0.

As the timer counts down to 10 seconds left, a bid comes in, raises the price of the Xbox to $.01 and cost the bidder $1. Timer gets another 15-20 seconds. Another bid comes in, and another and another. Each time raising the price of the Xbox by $.01 and costing the bidder $1.

This can go on and on for quite a while.

Finally, it ends. The timer hit zero, the auction has ended and the winner is announced.

John Smith won the Xbox at $150 and he won it using 50 bids,

The winner of the auction pays $150 for a brand new Xbox, plus $1 for each placed bid, let's say 50 bids for a total cost of $200 for a $300 item. Savings of $100.

The penny auction site made $200 from the winner and $14950 from the other 14950 bids for a total of $15150 for an Xbox that was valued at $300.

So, both the winner and the website are very happy from this auction.

BUT, the other bidders that placed a total of 14950 bids costing $1 each are out of luck!

There are many penny auction websites out there and they all work differently, but this is the basic idea.

Source

Scam or not a scam?

Is this a scam?

If the bidders are aware of what the rules are and how the website auctions are operated, then no. In the above-used example, the website disclosed all information and every bidder is made fully aware how the auctions work. A perfectly legit site made over $15000 for a $300 item.

If the website does not explain how it is operating then, yes. Many sites do not disclose the proper information, and many are coming under investigation. Some claims are that the timer gets the extra 15-20 seconds automatically, through fake bids, placed by the website. This would falsely continue the auction to get more real bids.

Should you use a penny auction site?

Using a penny auction is ultimately up to you. If your choice is to try one, proceed with extreme caution. Thoroughly read all fine print and do your research before starting up. Each site works a little different, so observing auctions first, is always a good idea.

Also remember, just because you bid on an item, does not mean you will win it, BUT each bid you place is money spent!

Is the question scam or not a scam? Or is the actual question, is it fair to all parties involved?

Do you think penny auction sites are scams?

See results

Do you use penny auction sites?

See results

Comments

    0 of 8192 characters used
    Post Comment

    • jimmyglaughlin profile imageAUTHOR

      Jim Laughlin 

      5 years ago from Connecticut

      Thank you. I'm glad you like the article. I enjoyed writing this one. The sites are very enticing, but beware.

    • tillsontitan profile image

      Mary Craig 

      5 years ago from New York

      I voted this up useful and interesting. Why? Well, first of all you see the ads on TV for these auction sites, like Quibid, and of course you wonder...could I really save that much money? There has to be a catch, and now, thanks to you, I know what the catch is. You gave us all the information we need in a concise, easy to understand piece. Thank you.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)