Penny auctions have seen a decrease in their popularity due to the potential fraudulent activity which some of these sites were choosing to participate in.
Some penny auction sites have stood the test of time, and have moved forward with the business concept. Looking at ways to ensure their customers have the correct information and the process involved in winning a bid in an online penny auction.
However, there are sites that have opened up with the intention of getting money from the consumer, without sending them the item they think they have bought. This practice is open to anyone, opening up an online business and accepting business dealings, even without setting up penny auction merchant accounts and using other options for customer payments.
The easiest places around the world to set up these anonymous companies are in America and the UK; it is possible that you need more identification to get access to your local library than you do to set up your own business. You will need more identification to open any penny auction merchant accounts, which is why if a company chooses not to accept credit and debit cards and uses other payment options be careful to ensure it is a legitimate business.
Being able to judge if a penny auction is a legitimate business, is possible. Search the internet, check out the Better Business Bureau and see if there is a complaint against the company. Read the comments, and don’t assume it wouldn’t happen to you.
If you are thinking about bidding, then reading the companies terms and conditions. They should give you the current information on how to place a bid and the costs involved. It is not free to bid on these sites, each bid costs money and this is where the companies make their money, enabling them to sell the items at the final low price.
Some penny auctions admit they lose money on some of the items sold, but in business, they are there to make money and they do this by enticing the bidder in.
Where once there were loads of penny auction sites, many have closed and some shut by legal intervention. Customer complaints and negative reviews run very high in the penny auction business. With customer’s spending money and having won nothing.
Therefore, the penny auction sites look good on the outside, but when you realise the amount of money you could spend with nothing at the end, is it worth risking money just to get an item at a reduced price?
If you are in the market for a penny auction merchant account, request your free quote below!