Monday, October 18, 2010

swizzied

I checked out another link that Donna sent me and this one turned out to be a pretty interesting auction site. Well, quasi-auction, which I think you will understand why I use that term after explaining it. Go take a look around at that site and see what you think.

Here's how it works: There are various products up for auction at ridiculously low prices, such as iPads for $15 or $100 Target gift cards for $10. Each bid on a product takes the price up by a penny. Meanwhile, a countdown clock ticks down second by second. Whoever is the last person to bid when the clock runs out of time is the winner of the auction.

There's a catch, though.

Each time a bid is placed and the price goes up by a penny, it also adds back a second to the clock. If there are less than 15 seconds left in the auction, the bid causes the clock to reset to 15 seconds, and it continues to count down.

For example, let's say the current bid on an iPad is $11.67 with 17 seconds remaining. You place your bid and now you are the successful bidder at $11.68, and the clock adds a second to go to 18 seconds left and continues ticking down. Then with 12 seconds left someone else places a bid taking the price up to $11.69 and the clock back up to 15 seconds (remember, if there are less than 15 seconds remaining, a bid will set the clock back to 15 seconds instead of just adding one second back to the remaining time).

It costs 60 cents to place a bid.

So let's think about this. If you have to pay 60 cents for each bid you make, then that means for every $1.00 increase in the price of an auction, the people running the site collect $60 (100 bids of a penny increase x 60 cents each).

If the bid reaches $10, that means they have collected a total of $600 in bid fees! That's enough to pay for a $500 iPad plus have $100 profit left over. Zowie!!! What a racket!!

This is really more like gambling, rather than a true auction because it depends more on your having the luck to be the last bidder in the auction. It has nothing to do with how much you bid. It's like those sad-looking but hopeful people sitting in front of a Las Vegas slot machine feeding dollars into it and winning nothing. Then they get up to take a break and the next person sits down, puts in a dollar and hits the jackpot.

I can just see some unthinking person racking up astronomical charges for placing a bunch of 60 cent bids, much in the same way people run up huge text messaging bills because they don't realize just how much they are doing.

I can also imagine a bunch of bleary-eyed folks who keep clicking on the bid submission button adding more time to the countdown clock and hoping they will be the final bidder - just a slot machine of a different shape.


1 comment:

donna said...

I am definitely not taking my chances! It's just slightly right of being a scam in my head but totally legal, right? Glad I sent you the link and had you figure it out! Thanks, Rickie!