A penny auction is a sale on a given item, from a brand new Kindle, to a high end ice cream maker, or anything in between, in which bids are raised one penny at a time, resulting in low prices on the auctioned items. Much like Ebay, the final bidder before the scheduled auction ends wins the item. While many legitimate penny auction sites exist, careful research should be done before participating in one.
One of the largest websites is BidRodeo, which has a unique approach to running their sales. The way BidRodeo works, a person registers and purchases bids for a dollar each. When they find an auction they are interested in, they begin placing bids. The end price of the item may be .50 cents or ten dollars, even if it is a new digital camera. However, the purchased bids help offset the low sale price. Even so, the winning bidder is usually getting a great deal.
During an auction, every bid represents roughly one dollar spent by the bidder, and sends the price of the item up by a penny. Every time anyone places a bid, the time on that item increases by a few seconds, until finally the time runs out.
BidonCash is similar in the way members buy bidding packages at a dollar a bid, with each bid raising the price by a penny and extending the auction. However, at this site people are not bidding on products, but cash prizes. While each dollar (or current bid price) spent increases the chances of winning, it is a game of chance, with losing bidders forfeiting the cost of their efforts to win.
To stay on top of the auction, this site has an automated program called BidJames, which automatically does the work for the member. To control overspending, spending limits can be set, although anyone trying to place a bid in the last four seconds will have to do this manually. With BidRodeo, this same system is called BidBuddy, and will not work if it is within ten seconds of the end of the sale.
Both websites have easy funding options using credit cards, Paypal accounts, Ecocard, and Neteller. Wire transfers are also available from BidonCash. While dishonest sites give penny auctions a bad name, it would be difficult to actually defraud large groups of people on a regular basis and stay in business. Consider that Paypal and other online funding sources pursue complaints until resolved and such fraud would be short-lived.
Both of the sites listed here have developed a reputation for honest dealing, and clearly list the rules and limitations of their auctions. BidonCash even limits the number of bids, which can be purchased in any given period of time, presumably to prevent people from emptying their bank accounts.
Even with limits on spending, understanding the bidding process is important. Hold on until the end of the auction to bid, decide on a limit before starting, and do not exceed it. The chances of winning are greatest when the item is watched carefully, and by waiting until the time is nearly up, fewer bids can be, or will need to be placed.
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