Penny scams or unsuspecting bidders?Were you really scammed at a penny auction or did you just not understand the fundamentals of penny auctions? Did you not realize that if you do not win the auction after bidding on it that you would lose money? Did you not realize that every time you click the ‘bid now’ button that it costs you money whether you win or not?

I see so many customer complaints about being scammed at penny auctions it is making me take a closer look at what is really happening.

Hypothetical step by step scenario with new bidder feeling they got scammed

  • See’s an ad on facebook where some mom wins an iPad for $20 bucks
  • Clicks ad and goes to a news advertorial – you know those ads that are designed to look like a local news paper reporting on some crazy story where a woman bought high end electronics for a few bucks
  • Clicks through to learn more and lands on a penny auction site and see’s all these auctions going on for pennies on the dollar
  • Holy crap only 20 seconds to go in this auction and I can buy that TV for $4 bucks, I better get signed up ASAP!
  • Let me get registered right now. Clicks to register
  • Enter name, address, create user name, enter credit card information, click join now, confirm
  • “Sweet that auction for the TV still has time on it, awesome!!!1”
  • Bid on the auction
  • “I’m the high bidder, sweet!”
  • “Hey, someone out bid me :/ well the price is only a penny more, I’ll obviously pay that much!”
  • Bid again – “ok here we go lets get this time down to zero”
  • Outbid again! Still only a penny more i’m in, bid again
  • Repeat bidding until you run out of your initial bid pack purchase that you didn’t even realize you bought anyway
  • “I’m out of bids? What the hell?”
  • Click buy more bids… see that they cost money
  • Sadly decide that you are not going to win that TV you wanted but at least you didn’t waste any money since you didn’t win
  • 3 weeks later you check your credit card and see you where charged $99.95 for a bid pack purchase upon registration
  • “WHAT THE HELL I”VE BEEN SCAMMED I’M GOING TO SHOUT THIS ACROSS THE INTERWEBS!!1
  • The end

Real Penny Auction Scams vs Naive Players

The above example is most likely representative of a naive player not really getting scammed. Instead they simply had no clue about how penny auctions work or what they were getting into.

Believe me, you can not really win that iPad for $3.30 in total cost! When you see an auction about to end with an incredibly low price on it compared to what you can find it for online then something is up, right. At this point, your spidey senses should be tingling to say the least!

Even if you win the right to buy an iPad for $3.30 (which is an incredible deal and highly unlikely) you still spent more money than that on the bids you used bidding and winning the right to buy that iPad for $3 bucks. It is highly likely that you spent at least 150 bids on that item which cost you between $.50 and $1.00 per bid anyway, costing $75 to $150. Sure it’s still a huge savings off of retail but winning an iPad in penny auctions that easily and cheaply is the exception and not the norm.

I mean, who wouldn’t pay a few dollars for an iPad? There is more to meets the eye, right. If you did not stop at this point and ask yourself what is really going on but you just whipped out your credit card and started bidding then it is highly likely that you did not get scammed!

You were just naive and or ignorant to the ways that penny auction sites work. You lost your money because you did not do your due diligence.

What is Not a Scam in Penny Auctions

  • If you thought you could bid on something only pay if you lose. Nope, sorry this is your fault for not knowing what you were getting into.

It is your fault for not reading exactly how these auctions operate. I don’t have to remind you that if something looks too good to be true then it probably is, right?

Especially something that looks to be as suspect as an auction website auctioning off expensive items for pennies on the dollar. The responsibility lies on you to understand that when you venture into the land of penny auctions, even though they are called ‘entertainment shopping’ they are really a very competitive game that costs money to play.

  • You lost because a different bidder spends way more in bids than the retail price of an item does not mean that you are getting scammed.

It could be that the bidder is a power bidder or trying to become one. Look and search for the history of that bidder and it is likely to show that they are either a power bidder (someone who does not stop bidding almost no matter what) or they are trying to become one. That is a strategy used to win penny auctions all the time and it does not automatically mean that the site is scamming you or that the bidder is a shill bidder.

Many of the shouts and reviews of penny auction sites we see across the web and in forums come from people who just do not understand how these auctions work. Perhaps you saw a news advertorial showing how a local mom won a new camera and a flat screen for pennies on the dollar. Next thing you know you click to see how she did it and you saw some high end electronics going for pennies on the dollar. Penny auctions with tv’s being sold for under $20 bucks and gift card auctions for pennies of the card face value and the auction is ending in 20 seconds!

Real Penny Auction Scams

In the penny auction world, there are two major types of scams or complaints of scams. There are those claims of scams that come from the more experienced bidders who dealt with a site that uses fake bidders or bots or simply didn’t ship products won. And there are the complaints that a site is a scam because a player lost money without knowing or realizing what they were getting into.

In this industry which is in it’s toddler hood (infancy was in 2009-2010) in levels of market maturity there have been a lot of legit scams! Yes, today there are true scam penny auctions. I’m talking about sites that use shill bidders or use software to rig the game so real users never win or that simply sell bids and have users win prizes only to never ship the items. That article will give you some pointers on what to look out for when evaluating whether or not a site is a scam.

There have been plenty of legit scams in the PA world and as a bidder you should only bid at an auction site you trust and has a positive reputation in the industry. We hardly ever recommend playing at the newest penny auction sites because unless they are extremely well funded and working to market to a huge audience then they are most likely going to fail honestly or resort to cheating and scams of some sort. It is what it is and sure there are exceptions to the rule (we would love to see more legit penny auction sites come on the market and squeeze the cheats out).

Just know that the vast, vast majority of the complaints and howls that beezid scammed me or skoreit is not legit are from people who lost money because they did not understand how penny auctions work, not because the site themselves were actually not playing fairly.

If you are looking to play at reputable penny auction sites then start with the ones we list on our home page!

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Tagged with: penny auction scams

4 Comments » for Were you REALLY scammed at a Penny Auction?
  1. Tracy says:

    My friend is trying to get me into this. I’m glad I saw your site. Thanks for the clear explanation on how these penny auctions work.

  2. Ric P. says:

    Thanks for this very informative article! I DEFINITELY had the “spidey senses” tingling when I first saw the “mom buys ipad for $6.53!!!1111one” ad on a yahoo page or something. I assumed it was a site that would just give me spyware or was a scam, so I never clicked on these ads.

    I never realized that they were a legitimate thing! Recently, I have been trying out some of these online sites that either save their users money or pays their users money (doing surveys, viewing offers, doing tasks, trying trials, downloads, etc.). I would never have tried some of these sites in the past, but I stumbled upon one (points2shop) that seemed risk free (no credit card or anything important required to register) and have actually been making money on these sites (albeit, at a VERY slow pace and small amounts at a time).

    There is potential in these kinds of sites, so I think I’ll try one of these penny auction sites myself. And yes, I LOVE competitive gaming for real money/risk, so this may be up my ally (I make a decent portion of money on points2shop of off competitive gaming)!

    Thanks again!

  3. LoonyLarry says:

    I have been bidding for 3 years, and I still get tricked. Mostly from the 2 page scam. I look at a site, see an item I want, search for recent wins of that item to see what the average price is and decide if it’s worth a mid-size bid pack purchase. Buy the bid pack, tag the item, but end up using all my bids fighting a bidder I never heard of.

  4. Penny Bids says:

    I am a fan of penny bids because I have won an iphone for super low low price. Thanks for sharing an informative post. Keep posting! Staying tuned for more.

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