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Quibids Penny Auction – the Real Story (Beware)
An Investigatory Review of This Business and Its Practices
Quibids.com is a business which is involved in Penny Auctions, a new form of auction which is like online gambling in some respects. Quibids appears to tout positive media attention to gain the trust of users, yet outraged Quibids customers are all over the Internet decrying fraud. What’s the truth? How successful was I? Read on to learn the shocking truth.
First, how it really works. Players buy bid tokens for .60 (US) each and attempt to strategically place their tokens on an “auction” and ultimately become the last person to place a token before the auction closes. Each new token placed extends the timer on the auction. Users attempt to be the last player/user to place a bid token when an auction closes, and before they actually spend more than what Quibids claims the item is worth (which is typically an inflated price).
If a user is the last person to place a bid token on any given auction, they are said to win the right to purchase the item at a “discounted” price which is calculated to be equal to .01(US) X the total of all tokens collected by all bidders. Remember, this is in addition to the cost of all the tokens he/she already placed trying to be the last token holder of the auction, and the “winner” must also pay a shipping and processing fee in order to obtain the item.
The Quibids site itself does not refer to the “bid tokens” but it is a token economy. In the same way Vegas casinos use chips to help customers forget they are spending money, Quibids uses “bids” to ease the idea of how much users are spending. One could call them chips or tokens, but whatever term you use, you can track the number of “Bids” in your Quibids account and you spend them each time you place one on a Quibids auction.
What is clear is that in the Quibids token economy there are multiple levels of token value. The bid tokens purchased with money can be cashed in, just like casino chips. The tokens you win in an auction voucher, or are awarded by the site have no cash value, but can be applied to an auction like any other bid token, just like promotional casino chips that act like money but have no cash value. The discounted price of a closed auction is a real cash figure, and a clear indicator of the number of bid tokens applied by all bidders in the auction. In this way, Quibids appears as much like a gambling website as anything else, except at Quibids the house advantage is staggering.
How successful was I? I purchased several of the bid token vouchers and can confirm that the software did prevent me from investing more in bid tokens than Quibids claims the item to be worth. More on this later. I paid the “buy it now” price on the vouchers I placed bid tokens on because the cash value of the bid tokens spent were as high as the declared value of the voucher, and then I was assessed processing fees, making the vouchers more expensive than buying them from the website cashier. On several items listed, I compared the Quibids price to Ebay and discovered the markup to be as much as 230% more on Quibids than what an item would cost on Ebay. Some were better, but in all cases, the Quibids prices I checked were inflated. I did score a single big win, but how did that work out for me?
My big win! After lurking for about 6 hours, I noticed that there was an item in the jewelry category that had no activity and would run out soon. I placed a bid token and won the right to buy a necklace Quibids claimed was worth about $70. Wow! $70 worth of merchandise for the low price of 1 bid token, .01 cent, and about $10 for shipping and processing. It sounds too good to be true. Did I get the item? No. I received a note that the item shipped. Then a day or two later I received a notice that Quibids could not fulfill the order due to some glitch on their end, and they would gladly refund my bid token. I received nothing, and Quibids would not credit me the value they claimed the item was worth. So, they declared the value of the item at $70.00, and I bought it in accordance with their policies, and they offered to give me back my .61 cents for their failure to honor the deal. Was I surprised? No.
Unlike Ebay and other online auctions, at Quibids there are no other members selling merchandise. Instead, Quibids sells all the items on its own behalf, and this is not at all like a traditional auction house which sells items on behalf of third parties. Ebay auctions are member to member, and other auctions are either member to member, or on behalf of third parties. Quibids auctions are not really “auctions” in the traditional sense of the word. Instead, Quibids seems to employ the term “auction” to make it seem less like gambling for prizes.
How does Quibids promote its services to the public? They try and play down the bid tokens and simply claim members bid in 1 cent intervals. Whoever bids last wins the auction price. Then, their advertisements and website pages show players buying pricey merchandise for very low prices. It all seems very happy and lucky for all the “winners.” On auction pages one can almost always see recently closed auctions which closed for pennies, but when you follow an auction, it is it typically never the case. The service requires the purchase of $60.00 worth of tokens before a user can bid. The bid token prices are explained clearly but not on the front page of the site and the deceptive practices are surprisingly effective.
For example, one auction I followed personally, showed a $2,400.00 camera, and after days of bidding, I watched it close with the discount price of about $500.00. What a deal! Someone bought something for a fraction of its price, right? The Quibids site displays something like “Joe Blow bought a $2,400.00 camera for only $500.00!” Well let’s see….
Let’s do some math shall we? The total collection of all tokens by all bidders in this auction, and the corresponding “discounted price” at the end of the auction is displayed as $500.00. Now, remember the tokens are applied one at a time and display in the pool as 1 token/penny intervals. This amounts to 50,000 (just eliminate the decimal) tokens placed on the auction. Now, 50,000 tokens at .60 cents each is a staggering $30,000.00 for a $2,400.00 camera. What does this mean?
It means that Quibids took that much money ($30,000+) from their pool of members on one item, and they employ this tactic all day, every day, on hundreds of items of various prices. Some users likely placed so many bid tokens on the camera that they ended up buying the camera at the Quibids price. The poor guy/woman who actually won the auction probably spent a fortune, and then had to pay an extra $500.00 on top of all the bid tokens he/she placed, and then a shipping and handling charge to receive the item.
HERE’S SOME COMMON SENSE… When a business collects over $30,000 from a pool of customers for an item valued at a $2,400, it is clear that almost all users involved, if not all of them, are getting screwed. The only “winner” is Quibids and they are laughing all the way to the bank.
Quibids has mastered the art of spinning their services to appear legitimate, and has even involved the media. But the good media reviews are old, and during my investigation I could not find any in-depth reviews which were positive. Even the Accounting firm that supposedly certifies the ethics of the Quibids business states clearly that they cannot test the legitimacy of the services.
It is not even clear to me that the “bidders/users” on the Quibids site are all actual users. There seems to be some trickery going on. While testing the site I entered into an auction to “win” a voucher worth 15 bids at a discounted rate. I could only place 15 bid tokens before the system kicked me out and would not allow me to apply more. That seems good because it would not allow me to spend more in tokens than the claimed value of the item. However, after I was prevented from placing more bid tokens on the listing, I sat and watched other individual bidders place 50+ tokens on the same auction.
The only reason I can conclude that some users could place 50+ tokens would be to drive up the overall token pool (shill bidding on behalf of Quibids), making it appear the auction was closer to closing and causing the discount price to be higher at the end. A real user should have been prevented by the software, as I was, from placing more than 15 bid tokens. Also, a real user would not place 50 bid tokens on an auction in an effort to win 15 of the same tokens. It’s very suspicious.
After my investigation, I asked Quibids to refund my unused bid tokens. They did refund some of them, but claimed that some were not redeemable. I told them I would charge back the fee for the unused tokens they would not refund and they threatened to ban me forever. I don’t think it will be an issue, I won’t be going back to Quibids.com.
After a full investigation, using real money and engaging in the process, my conclusion is that Quibids is unethical and untrustworthy, not to mention massively expensive–a sink hole into which people who flunked math throw their money.
It’s clear to me that this business is a scam. I usually don’t use such strong language out of fear of retribution, but I have no fear about Quibids.com. My conclusion is, “They ARE a scam.” The overwhelming evidence I uncovered was shocking and the business they are engaged in would seem to be illegal. In my opinion, this is the most corrupt business I have ever witnessed online. I would advise staying away from Quibids, and you should tell your friends, neighbors, and congressmen. After writing this article I filed an FTC complaint. You should too.