Who wants an iPad for $19 and change? The answer is likely “Me me me me!!!” Well, that’s what “Penny Auction” websites like Beezid, Quibid and Bidfun advertise on TV during the late night Three’s Company reruns. But a new article at Yahoo News is offering that classic advice: if it seems too good to be true… But first, they explain how penny auction bidding works.

To sign up, you have to buy bid packs. The more you buy at a time, the lower per-bid price you pay. For example, you can buy a pack of 30 bids for $27 (that’s 90 cents per bid) all the way up to 1000 bids for $550 (55 cents per bid). Then you find an item you want to bid on, and start bidding. Each time you bid, it raises the price of the item by one cent and often resets a timer for another 10 seconds or so of open bidding. Bidding can be done manually, or you can set up auto-bidding, which will program the site to bid for you, usually at the last second.  Yahoo News

What’s the catch? The author lists several. First, to make a bid that raises the price by a penny, you are actually paying between 55 and 90 cents. Second, you get into a bidding war, make a bunch of bids, and end up not winning the item but still losing a bunch of money. Third, are you really saving? She provides an example where someone actually won an iPad for 83 cents, but used $300 in bids. That’s $301 total when, on that same day, you could buy the iPad on Amazon for $320.  Finally, just like those infomercials where they show you a dollar’s worth of crap, tell you it’s a $30 value and offer it to you for 10 bucks, it seems that some of these Penny Auctions are inflating the value to stir bidding excitement.

A final quote:

These sites bill themselves as “entertainment shopping.”  That’s like calling the craps table “entertainment banking.”   Yahoo News

But, as we say, that’s just one opinion. Have you used one of these bidding sites? What do you think? There’s more at the original article, so check it out. And have a great weekend!

(photo: quibidsreport.com)