Bidding fee auction

A penny auction is an online version of the all -pay auction where each bid is not free, that is, pay all participants, including those who can not purchase an item. Such corresponds to a gambling in principle.

Formation

The term comes from the time of the Great Depression, as a farmer in foreclosures by threats other bidders prevented them weiterzubieten after the minimum bid of one penny. The first online penny auctions were collected in 2005 from the online auction site Telebid, later renamed Swoopo performed.

Terms of Use

In Switzerland Online penny auctions were banned.

In Germany, too, in a judgment of the Administrative Court of Mannheim ( May 23, 2013 - Case No. 6 S 88/13 ) stated: "A countdown auction on the internet, ..., gambling within the meaning of § 3 para 1 is GlüStV nF ". as well as paragraph 22: " For a game so in an objective point characteristic that each player a fortune risk in the hope comes in, that at the expense of the other player's gain can be achieved ( van der Hoff / Hoffmann, p. 70). these conditions are met here. "

Principle

Regardless of the real value of the auction item is the starting price of an auction € 0.01 or € 0.00 for a supposed period of several hours. Participants pay a fee to be paid immediately via PayPal, credit card or instant transfer for each bid placed. Same time, each received bid raises the price of goods to a minor contribution, usually a penny, and extend the auction time by a few seconds. The winner is the participant who has placed the last bid. All others lose their use.

The pages are jeweilen coupled across several countries, ie all countries offer on one side and there is no way to win in a small country like Austria or Switzerland with a smaller catchment area.

Examples: An iPhone running on the system of Swoggi to 220,95 €. Thus 22095 bids have been submitted, each of which increased the price by a penny each bid cost 50 cents ( and the duration by 15 seconds prolonged ). In addition, the term has been extended by the system 10 hours to prevent ends of the offer in the night hours in bids after 23 clock. As a whole, so the price for 18 iPhones has been paid, but it was only one of the devices for sale. The buyer bought the machine with 22.6 per cent discount on the specified list price. ( Still not included here are the " free " bids, which are not really free ).

Very important for the seller, it is so that other examples seem like an iMac with a list price of 1099.00 euros to 7.57 euros, but cost, on average, one of the 19 units sold (ie, less than two per month) between 19 November 2012 and September 2013 111.17 euros, with only six buyers came to train, but this up to 4 times. Of course, any referencing to such a supply side remains problematic; Although the selected site can be here anyway to an evaluation, which is not to be understood as advertising.

Again and again, so many commandments are from the eventual buyer given that of an impact on the listing price is not much time left, or how overpaid by 40 percent in the following referenced example of the list price ( the discount will be given in the example as 0.00 euros, or about because the actual loss is not displayed by the system).

For some providers, you have the opportunity to purchase the item on a purchase option at the list price. In this option to purchase the bids used can be credited against the purchase price. Thus, one can at least without bargain but also without loss from the auction go out when it was not the end Bidder.

The most widely sold products are available on all platforms, the credits, which can also be bought - with the corresponding risk.

Dissemination

In the U.S., there are two groupings of larger penny auction sites - Entertainment Auctions Association ( EAA) and Penny Auctions Merchants Association ( PAMA ), the evaluation of the overall profit of the field in 3 billion U.S. dollars. In the UK, the largest provider Swoopo was up to 324,000 monthly accesses ( in August 2009). The brand still used in the U.S. in 2013 as the forwarding on DealDash, for the German parent company was on 25 March 2011 Application set to insolvency.

The page Quibids.com, with 1.5 million monthly access 2011 largest vendor in the U.S. market offered, per day 10,000 auctions and is also active in Germany since August 2012.

In Germany there are a number of providers, such as

• Auktis.com.
• Centgebote.de,
• De.swoggi.com,
• Quibids.com / en and
• Snipster.de

The pioneer swoopo.de has disappeared from the market in 2011 and has since August 2013 bidfun.de online no offers.

Criticism

Penny auction sites use individual aspects of the game theory in order to bind the participants in each auction. Thus, with each bid placed the perceived greater investment and also the willingness to further bids in order not to lose the invested capital. Sources evaluate the principle rather than hidden gambling or lottery because when auction. From managers and operators is, however, emphasized that timing, strategy and skill are needed to win a penny auction. However, to consider again that only items available for selection can be bought, and the choice is often very limited.

As a further point of criticism of the use of bots is suspected ( " bid " by a computer program that works automatically without any further action of an employee and participates in the auction ) to drive the auction price up, and to encourage the participants to further chargeable commandments or the auctioned product is not to deliver a must Botgebot and again to auction off.

Consumer organizations, such as Stiftung Warentest and K-Tipp warn of penny auctions such as bidfun.

One of the illusions is also the mentioned extension of the night after 23 clock, but the offer - if as Swoggi available overseas -foreign sites in Brazil and the United States the same items to, so there is no sleep. Another mistrust point is the shift in supply on getting new pages; so although Swoggi speaks of experience with " auktionclick.de " would experience without the whereabouts of the former site something. Changing provider does not really help in terms of trustworthiness.