By Josh Kirschner for Techlicious
You’ve seen the ads on dozens of sites — “Get an iPad for only $10!”. Sound too good to be true? You bet it is.
These ads for so-called “penny auction” sites promise incredible deals on popular electronics, sometimes for as little as a penny. But you’ll likely end up spending much, much more, even more than the actual retail price, and you may not end up winning the product at all.
Penny auctions are such a bad deal for most consumers that we’ve pulled the ads from Techlicious when Google tries to serve them on our site. And recently, the Federal Trade Commission (FTC) issued a caution to consumers on the pitfalls of penny auctions. With info from the FTC, we’ve put together a guide on what to look out for:
How does a penny auction work?
In a penny auction, items are posted by the site owner and you pay to bid for them. The price of auction items usually starts at zero, and each bid bumps the price of the item up a penny. Each bid also adds time – from 10 seconds to 2 minutes – to a countdown clock. The goal is to be the high bidder when the clock runs out. But because the clock resets with each bid, the auction process can be unpredictable and take time to complete.
This post is excerpted with permission from Techlicious.
PC Pitstop is proud to welcome our friends at Techlicious as guest contributors. Founded by consumer tech guru, Suzanne Kantra, Techlicious is your daily scoop on everything from the best new mobile phones and apps to holiday shopping guides to step-by-step instructions for protecting your privacy on the Internet.