Penny Auctions - Facts for Keeping Your Money Safe

Penny Auctions - Facts for Keeping Your Money Safe

There are a lot rumors and misinformation surrounding penny auctions that can mire the facts a bit and cause people to lose faith in something that's made shopping and keeping up with Jones' a lot easier in recent years. The question though are penny auctions too good to be true?

The claim with penny auctions is that many users (bidders) can buy items that cost hundreds (even thousands of dollars) for a fraction of the price. The kind of discount most adverts and marketing refer to is somewhere in the range of 70-90% lower than the MSRP on goods. There's a lot of people who think those numbers are inflated and it's just marketing buzz but there is truth behind the statements.

Granted not all penny auction sites are legit. Assuming all of them are legit is akin to believing that scammers don't exist online and thinking it's safe to share your social security number with strangers on the street. Not all auction sites are legit, and not all of them can offer the same discounts that most penny auctions advertise.

So how do you know which sites are actually legit?

Like all things, you need to do your homework before signing on. Consider that there are hundreds of auction sites trying to replicate the success of eBay. Penny auctions are different but there are still as many if not more that try to get some green from people who join without doing research. As you compare and contrast sites you'll need to keep your eyes open for important factors.

Are they free to join or do they require a membership fee?

Do they offer secure payment processing?

Does the privacy policy look like someone copied it from an cell phone supplier website (or other random corporate page)?

"Do you shill much sir?" - Another concern for bidders is whether or not the penny auctions sites utilize bots in order to drive up bids. This is a legit concern because with many penny auction sites you have to buy credits in order to bid. Bots drive up the prices so not only are you wasting credits but in other simple penny auctions you end up paying more. These tend to make the site look like they generate a lot of traffic but these fraudulent auction sites are just gaming the system to make money. You can determine the validity of the traffic (and the authenticity of a site) by checking out the analytics and traffic statistics on sites like Alexa.com.

Consider the payment processing method since you'll be paying online this means you're using a credit card for payment. Secure transactions are a must to protect your accounts, and you can rest more comfortably if these sites utilize payment services like PayPal.

Lastly, part of your homework and assessment of a penny auction site should be to check for reviews and either positive or negative comments about the site through major review sites like Google reviews, Yelp, or any other community/social networking site that offers opinion sharing. A deep search of the penny auction site and brand should help turn up useful info to help you make a decision.

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