That's not an auction.

Lots of people will not have run across this particular scam, so I think it's worthwhile blowing a whistle here. A large number of sites have popped up with what they claim is an "auction" service; biddi.com, quibids.com, swoopo.com... the list is much too long already, and keeps getting longer. They all share one essential characteristic, however: they are NOT auctions.

In a real auction, the bidder selects the amount that they wish to pay, and bids it explicitly; when the highest bid has been posted (as indicated by the fact that no higher bid comes in), then the auction ends and the item is sold for that amount, which represents the bidder's entire outlay (possibly plus an auctioneer's fee that is fixed and knowable before the bidding begins). But the so-called "auctions" on these sites just increment the "price" by a fixed amount for each "bid", so the bidder never has the option of simply placing his bid for the amount he'd be willing to pay, and being done with it... and the advertised final "auction price" of any given item does not include the amount that the winning bidder had to spend on "bids" in order to be that eventual last bidder, so the "price" is fictitious in fact.

In these competitions, the "bidders" drop out only due to exhaustion of patience or money to buy more "bids" (possibly after they've spent a ludicrous amount fruitlessly), not due to the auction's "price" having exceeded their limits... though dropping out may very well cost them every bit as much as they'd have bid or more, without producing a win as a result! That's because of the second striking difference between these sites and actual auctions; even if an actual auction requires a cash deposit prior to participation (which is very, very rare), there is never a fee for placing a bid. On these "penny auction" sites, every bid requires payment of a fee. So "bids" aren't free, and "bids" are not actual BIDS, they are just tokens; places in line. And that brings me to the next point: These are more like a lottery, in that you have to buy bid packs (like jar-drawing tickets), but they differ from a jar drawing in that the last ticket dropped in the jar is ALWAYS the winner.

Do you see the problem yet? Perhaps it will become clear with the addition of one more detail. During the final countdown period of these "auctions", if a "bid" comes in, the countdown timer resets to a fixed value (typically 20 seconds) and restarts. This means that you CANNOT just wait until the timer is at 1 second, and try to flip your bid in last; others will ALWAYS have the option of being last "bidder", because your "last" bid will give them more time to flip another one in.

I looked at the bids on several of these sites, and it became obvious that the site owners are making a huge profit, with what amounts to a lie. They may say that (for instance) an $800 Canon digital camera went for $43 (in a process where each "bid" increased the price by just one cent), but what they aren't saying is that the actual amount that the "winning bidder" paid in order to "win" is higher - probably MUCH higher. To place the bids at all, the bidder had to buy "bids" - probably lots of them - and may have spent hundreds of dollars more on "bids" than on the final "price" of the item. In order to wear out the competition and take that final-bid spot, a lot of other folks had to drop out along the way; they, too, may have already spent quite a lot on "bids". In the Canon camera example, if bids cost 50 cents each (not unusual; some sites require more, some less) and there were 4300 "bids", the site received $2,193 for that $800 camera: 50 cents for each "bid", plus the $43 that the "winner" still had to pay to complete the transaction. Oh, and unless the other bidders were given the option of converting their bids to cash against the purchase of the same item as a "buy it now" deal, they got NOTHING, despite having put over a thousand extra dollars into the site's coffers.

Also, consider the time factor. If that Canon camera required 4300 "bids" to be "sold", and all but 150 of them were placed during that seemingly-endless "final 20 seconds" at the rate of one every 10 seconds (which isn't far off, based on my observations), then that "final 20 seconds" lasted a whopping ELEVEN AND A HALF HOURS.

So, what amounts to a rigged raffle is being passed off as an auction. Unless the Buy It Now price is really attractive to you (and you had best read the fine print about shipping charges and other fees first... if you can find them!), these "auctions" offer you only a way to lose substantial sums of money and time.

I call them a scam, pure and simple. And I suspect that they probably violate both the auction and lottery statutes of multiple jurisdictions, but I haven't seen anything being done about them by the legal system so far.