When Chicago’s CBS 2 went to report on the rash of Better Business Bureau complaints against penny auction sites — which promise bottom-dollar deals on everything from laptops to sports cars but which critics say is nothing but another form of gambling — it probably wasn’t expecting to find out its own news show was being used to promote the very site it was investigating.
In the ads for penny auction sites like QuiBids, you hear of bidders who won cars, computers, TVs and other pricey items for just a few dollars. Curious about how these sites worked, our investigative in-laws at Consumer Reports recently scrutinized them and found that while the one winning bidder might get a good deal, you’re more likely to spend a bundle to end up with nothing.
With their low-rent advertising and seemingly outlandish success stories of people buying vintage cars for only a few dollars, so-called penny auction sites like QuiBids.com and Swoopo seem too good to be true. News coverage on these sites appears to be divided — between labeling them retail crack and covering the latest bottom-dollar big buy — so we figured it wouldn’t hurt to ask the Consumerist hive mind to see if any of you have had first-hand experiences with penny auctions.
If you’re a fan of online gambling masquerading as an auction, you’ll have to turn away from Swoopo and instead use one of its dozens of clones. The penny-auction leader filed for bankruptcy last week, and the site has been down due to “technical issues” for over a week. Will it be back? No one knows, and no one at Swoopo is answering support e-mails or any other contact.
We often receive e-mails from readers wondering whether this or that penny auction site is an awesome way to kill time and get cheap iPads, or a scam. Back in 2009, we looked at Swoopo, and penny auction sites have proliferated since then. The sites differ somewhat, but the business model is always the same, with users placing prepaid bids, and the auction site collecting far more from all of the bids than the retail value of the item. It’s like a very lucrative, for-profit raffle.