Are Bid Cactus and Penny Auctions a Scam?
Basically, these sites offer you the chance to buy "bids", and prices vary from site to site, and you use those bids on merchandise in an attempt to win it. Time runs out on these bids, but as soon as someone bids on an auction, it adds time back on. Kind of like a bidding war.
Now while this seems good in theory, sites like this are raking it in. You see, the bids can cost about 75 cents each and then you pay whatever price the auctions get up to on top of it. So if I'm watching a "penny bid" auction and it goes for $1.00, that means the winning bidder pays $1.00. The site, however, made 75 dollars for the bids alone.
True, the site could take a loss on items, but unlikely. These auctions see furious amounts of bidding in the last few seconds, which add time back on, and then repeat ad nauseam. Truly, patience is the virtue we are looking for here. And for patient people, this could pay off quite well. Me, I would just get ticked off and say forget it.
So are these sites scams? In a way yes, but not like most scams. They have a way that they know they'll make their money back on the items. However, if you pay $75 for 100 bids and don't win an auctions, you just threw away $75 bucks. And that is a distinct possibility unless you're really patient. You could also run out of most of those bids in one auction. So there is an inherent risk/reward system going on here.
In my brief study, I found that the most "tenacious" bidders usually won out. That means you aren't going to "sneak one by" on anybody. Those who try, automatically fail as the "tenacious" bidder quickly outbids them. So the hit and score system does not work at all. Like I stated before, patience seems to win out.
To further my study, I saw a $50 Target gift card that nobody had won yet at $3.00. That means the site made $225 on bidding for a $50 gift card. And the same guy kept bidding back in. Tenacious eh? Seem like a scam to you? You decide there.
Is it worth it? Probably not. There may be some people who do fairly well, but those people have to be pretty dedicated to that site. So, unless you're going to be the "tenacious" and "dedicated" type, don't even bother. The odds just aren't stacked in your favor.
Let's chalk one up for BidCactus.com for the Hobo Shame Award for the Week!
Technorati Tags: scam,bidcactus,bid cactus,bidcactus.com,penny auctions,penny bids,rambling
Published by Mark Wilson
Mark Wilson is currently a Certified Trainer for one of the largest Wireless Providers in the World. In his spare time he blogs on a couple of sites (http://markgoodness.blogspot.com) and writes occasional... View profile
- Penny Auction Sites - Deal of the Century or Scam of the Century?You can buy a LCD TV, Laptop, or iPod for just 25 cents, so they say. Are they offering great deals or just ripping people off?
- Why Pay to Bid on Penny Auctions when EBay is Full of Them?Penny auction sites often charge users to bid in the attempt to win an eyecatching prize. But why waste money to almost certainly win nothing, when better options exist?
- Land a Project: Online Job Bidding Sites for Freelance WritersFreelance writing is a fairly fun way to make money; however, many writers cannot make a full income off of it. One of the increasing popular ways for freelance writers to obtain work is by online bidding sites, also...
- The .01 Penny EBook Auction Might Get You Banned Off EBayThis report discusses the .01 secret penny auction strategy that some eBayers use to boost feedback and the dangers of doing so.
- A Penny for Your Thoughts!Online auctioning seems to be such a simple way to get rid of my extra stuff. What happens when my computer does not cooperate?
- Legitimate Penny Auctions
- How to Get Started in Penny Auctions
- Why to Avoid Online Penny Auctions
- Penny Auction Phenomenon
- Penny Web Auctions - Scam or Con?
- Would You Pay $150 to Participate in a Penny Auction Such as "SwipeBids?"
- "Swipebids" and "QuiBids" Are the Same Penny Auction Ripoff
3 Comments
Post a CommentJust curious. Have either the author of this article or Rockandroll, the first commenter, actually registered and bid on any penny auction site?
I'm not promoting BidCactus or any other penny auction site, but I see lots of articles and comments from people on both sides, but very, very few who admit to actually participating and commenting from personal experience.
Penny auctions use auto bidders to run up the bids until they either break even or make a huge profit. this is especially true for new aution sites. how else could they make a profit. almost all of the bids are from "fantom" people. that is the only way they can build their sites up. it takes years to get a site up to breakeven, if ever. I know some of the older sites still use autobidders with fake names. a clue is when u see the name of a bidder all day or very often all of the time. The use of fake names to run up the price or bids is illegal in most, if not all, states. someone needs to call the attorney general of their state to complain. Also, buyer beware is what a lot of attorneys gereral will say however. these sites are a rip off.
Great post.
Perhaps I can just add to this that the best way to guard against being ripped off by online sales or auctions of any kind, Craigslist and eBay included—and whether seller or buyer—is to use a *bona fide* online escrow company. Especially for pricier items like antiques, jewelry and autos. Although it does add some cost, it takes the uncertainty out of the transaction, and that’s a small price to pay for peace of mind.
For my money, the best bona fide online escrow (and there seems to be ten fraudulent escrow sites for every bona fide one) is probably Escrow.com (http://escrow.com). In fact, it’s the only one that eBay recommends, and is the only online escrow company that is licensed to provide escrow services all across the United States.
Take care,
Ulf Wolf