The Internet has exploded with all sorts of bargain websites that promise to offer consumers big savings on things like electronics and jewelry. Many of these companies are now openly advertising on network television; however, according to Sarah McDaniels, a technology expert and investigative feature writer, this doesn’t make them reputable.
“If you’ve watched television lately, you’ll see commercials for penny auction sites, such as SkoreIt and QuiBids,” she said. “Beezid even has Lindsey Lohan pitching its product. Unfortunately, this type of aggressive promotion is attracting a lot of unwitting consumers who don’t understand how the platform works.”
McDaniels says penny auctions are really more like casino games than actual auctions. According to her, they operate by forcing members to buy bids, which they must spend each time they want to make a claim on an item.
“Even if the bidders don’t win the auction, they lose their bids,” she said. “This allows the auctioneers to profit when their members fail; and they ultimately encourage this by adding extra seconds to the auction, each time someone makes a bid.”
Other Alternatives to Bargain Websites
If consumers want to try to score bargains by participating in actual online auctions, McDaniels, who specializes in investigative features focused on reviews, scams and deals, says they can try websites, such as eBid or iOffer. Still, she says even these sites have been criticized for not policing vendors well enough.
“I just did a review on iOffer,” she said. “This company is very aggressive in its marketing efforts, proclaiming ‘ deals, deals, deals ‘ for its members. In the end, I found all sorts of customer complaints regarding vendor scams involving counterfeit merchandise.”
Although McDaniels says sites like iOffer aren’t necessarily involved in these types of online scams; they do indirectly encourage unscrupulous vendor behavior by turning a blind eye. In the end, she says consumers should be wary of bold claims regarding big bargains.
“I’d say anytime consumers hear the phrase, ‘deals, deals, deals,” they should turn and run,” she said. “More often than not, aggressive advertising tactics are a sign of a deceptive business model; because the company cannot rely on positive word-of-mouth advertising, and must instead resort to wild promotional claims.”
Choosing between sites
For consumers who are hoping to find reputable deals, McDaniels recommends sites that offer local discounts, such as Groupon and LivingSocial. On the other hand, she warns against any deal site that claims to be selling discount brand-name items from overseas warehouses.
“Take DealExtreme, for instance,” she said. “Here’s a company that claims the ability to ship expensive, brand name gadgets and electronics for pennies on the dollar; however, many current and former members complain that they’ve been swindled with bait-and-switch tactics, where the product they receive doesn’t actually match the one pictured on the website.”