have you ever bid on any of those penny auctions ?

[Dancing Fire]

are they for real? i think it is a scam but how do they scam you?

 

[LJL]

I haven't done it - but I looked into it. They are marginally real/marginally a scam. Heres how they work...


You have to BUY the bids themselves. So you pay - for example - like $40 for 100 bids. There is some minimum number that has to be purchased to sign up. And each bid for each item increases the amount of the item by one penny or by 5 cents so the ultimate price of the item is very low. But when the clock winds down, and someone new bids, the clock starts back up at a minute. Then it goes down to a couple seconds and someone bids again, and the clock goes back to one minute.

So in theory, you could be the magic winner who gets an ipod for $10 if you are the only person to make that bid when the clock winds down and if you don't have to make an outrageous number of bids in order to be the winner. But you could also pay that $40 to have 100 bids and never win anything! The business is premised on popularity since the more people who bid, the more money they make on a single item - a $10 winning bid on an iPod represents maybe 1000 bids ...1000 bids at $40/100 is $400 +$10 for the cost of the item. It might only cost the winner $10 + the amount of bids spent but the company still gets $410.

Not sure how well I explained that but I gave it a shot!!

 

[amc80]

LJL, that was a great explanation. The key is the clock resetting when there's a bet.