Jan 24 2010

Are bid-auction sites a good deal?


I’ve been getting a few e-mails from MyPoints advertising a bid auction site called BidCactus. As I’m writing this post, several auctions have ended: A $100 Walmart gift card sold for $4.97 and a $50 Home Depot gift card went for $0.16.

On the surface, these sound like great deals. But what’s the catch?

You have to pay for each of your bids.

Before bidding on anything, you have to buy a “bid pack.” According to this particular site, bids cost $0.75 each and you must buy at least 25 bids at a time ($18.75).

You place a bid, and the item increases in price by a penny or a dime, depending on the type of auction. So $0.75 is deducted from your account with each bid.

If you or someone else bids in the last 20 or so seconds of the auction, more time is added to the clock to give other bidders a chance to jump in.

Even though you’re paying to bid, there’s no guarantee that you’ll win anything. And, if you luck out and win a $50 gift card for “just a few bucks,” you’ve also got to factor in how much you spent on bids.

Bottom line — these types of bid auction sites are not the way to get a good deal. They’re more gambling than deal-hunting, in my opinion.

You want to know who comes out ahead? The auction sites! Take a look at the $100 Walmart gift card that sold for $4.97. If it was a penny auction, then that means 497 bids at $0.75 each were placed. That’s $372.75 for a $100 item!

Have you tried one of these bid auction sites? Did you get a good deal?

Posted under Uncategorized | 8 Comments »

8 Responses to “Are bid-auction sites a good deal?”

  1. Well it sounds like a really crappy deal for the person selling the item! Is the ending bid all they get? It sounds more like people bid until they’ve spent too much and then drop out, rather than when the bid gets too high for them. I’d be interested to see the bid history; I wonder if they share it.
    .-= Jenny´s last blog ..Was it YOU? =-.

  2. Sorry, I get it now… I was curious and googled reviews of the site. Yes, definitely something I’d stay away from: http://www.sitejabber.com/reviews/www.bidcactus.com

    Some people have accused them of having fake bidders (or bots), but honestly I don’t think they’d have to, because this is gambling and people get addicted. This could be financially dangerous for a lot of people!
    .-= Jenny´s last blog ..Was it YOU? =-.

  3. Yeah, I should clarify this for people who don’t Google it — the auctions are all done by the company — NOT individual sellers.

  4. I’ve seen this site through MyPoints, too. It looked like a good way to LOSE a lot of money, but I didn’t look into it to actually check out the math. It looks like somebody is making a lot of money, and it’s not the bidders!
    .-= Becky@FamilyandFinances´s last blog ..The Great Thing About Home Depot =-.

  5. I actually tried one of those sites out (DFWbid) and I won. You had to buy a credit for $3 to enter and then you could try. There was an option to bid one penny (open for random 5 mins during the one hour period) and I lucked out and got it. I won the item for a penny + my $3 entry and won a $100 visa gift card, so I came out ahead by $96.

    I spent $3 to buy another credit a few days later but did not win so I gave up.

    So in the end I spent $6.01 to get a $100 gift card that I could use anywhere so it was okay.

    When I lost the second bid I decided not to play again.

    So I guess it all depends on if you are lucky. Yes the site makes more money than you do but it worked for me (one out of two times).
    .-= Lulu´s last blog ..Getting Mad About Getting Paid =-.

  6. That sounds like a scam to me. Maybe it’s not technically, because they tell you what you’re getting into, but it doesn’t sound like a good use of money or time. And it sounds stressful!
    You gotta remember if it sounds too good to be true, then it is. And no one gives away money like that, so you know their profit comes from somewhere, likely the “customer”, aka you.
    .-= Bethany B-A´s last blog ..Productive weekend…? =-.

  7. I have been getting those emails too and was wondering how they worked. Thanks!

  8. Eek.. definitely sounds like a scam to me! Geez… hate stuff like that! I stick to Ebay.. lol!
    .-= Carla´s last blog ..Cursing the day video games were invented… =-.

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Hey! I'm Kacie, wife and mother of 3. I write about my family's finance: how we save money, improve our spending, and plan for the future.

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