Saturday, December 11, 2010
Can You Trust Penny Auction Sites?
While it is true that some are sincerely concerned about how easily people can be scammed on the internet (remind me to tell you about some of my own experiences!), still others use negative reviews to drive traffic to an article that prominently features a link at the bottom to their latest deal, urging visitors to "Check out a company where you can REALLY make some money!"
Puhleeze. How much more, then, are penny auctions going to raise the scam radar of those watchdogs who live and breathe to tell you how you ought to spend your money? Their warnings are not just paranoia.
Penny auctions, like penny stocks, are HIGHLY SPECULATIVE.
Let me repeat. HIGHLY SPECULATIVE. Even though auctions start at a penny, if you don't know what you are doing, you can find yourself locked in an autobid with someone having deep pockets, and spend way more on an item than you intended to.
So what, you may ask? If I planned to bid on a Nikon Camera up to $100, and I end up getting it for $145 instead of $450, why does it matter about a lousy $45?
Because penny auctions, like penny stocks, are HIGHLY ADDICTIVE.
Let me repeat. HIGHLY ADDICTIVE.
Particularly if you start winning.
Have you ever turned 50000 shares of PennyStockFool.com at a penny into $2,500, or $5,000, or more? Then you know what I am talking about. The same kind of thing can happen with penny auctions. They produce the same kind of rush as horse racing, or high-stakes casino gambling. Worse still, since you are paying online, it is a little like Monopoly money. You may reason away an extra $2 on an inexpensive item. (What if I lose the item for the want of just $2??) You may reason away an extra $10 on an expensive item that you are paying online with a credit card, but those $10 overages quickly add up to an extra $100, or $200 or $500 if you are not careful.
Would you tear up five $20 bills and flush them down the toilet?
Of course not. So why is it so easy to whip out a credit card and pay $100 for something you really don't need and are not going to actually turn around and sell on eBay for full price?
I know this isn't the information you thought you were going to get in this article, but I wanted you to have a chance to think about whether you have the temperament to bid sensibly on a penny auction before I start talking about penny auctions in earnest.
If you have the discipline to play them right, penny auctions can be a lot of fun, and a way to pick up great products at a fraction of their actual cost.
If you have what it takes, watch this space Monday for a new series about penny auctions!