Late last night I saw a television commercial for Quibids.com advertising good for ridiculously low prices. So I though I’d check it out and apply to old “If it sounds to good to be true” routine and see how the site makes its money.
To place a bid on any of these items you must first purchase credit with the site, these credits are called “Bids” and each “Bid” is worth 60cents. You can then place these Bids on items of your choice and if your Bid is the last in when the counter reaches zero then you win the right to purchase at the final auction price.
Seems legit on the surface, but here is where the scam lies. Unlike a normal online auction once the counter gets down to 20 seconds it will begin resetting back to 20 seconds each time someone places a Bid. Eventually the timer will get moved down to 10 seconds where it will constantly reset back to 10 seconds every time a bid is placed and will continue to do so until people stop bidding. So in theory an auction could go to eternity.
Here is the real key to the scam. Bids (credits) used to bid on items are non-refundable so even if you lose an auction you have still payed for the privilege of bidding, not only you but everyone who bids on these auctions is paying just to take part with no guarantee that they will be able to purchase the item. Even the winner of the auction is still out of pocket for the Bids (credits) they used to bid on the item which they can now purchase.
The constant resetting of the counter is used to drive people into a frenzy (it works) and start bidding like mad to be the last one before the counter hits zero. But 10-20 seconds is actually a long time at auction so they are easily outbid by someone else who is in turn outbidded again by another person. This can go on for hours with people spending their non-refundable Bids (credits) just to outbid each other.
Legitimate auctioneers don’t charge you to place each bid, or constantly reset the auction to keep you all bidding. However Quibids.com currently does both. The most well known online auction house is eBay, but you only pay on items that you win. The same goes for House, Car, Antiques and all legitimate auctions. I am happy to call Quibids.com a scam because the old “If it looks too good to be true” is certainly correct here. I am also convinced that naming their credit “Bids” is a deliberate attempt to trip users up with cleaver wording.