As I dig further into penny and online auction sites my conviction that users need to pick a reputable company grows stronger. If they are not careful, users risk losing their money through fraudulent practices or sites going out of business. Here is a good example I came across today:
Jungle Cents - This site claims to offer both traditional penny auctions and seat auctions. The latter is where users spend bids to buy a spot in an auction with a finite number of bidders. Once all of the spots are taken the auction begins in the traditional brick and mortar sense. That is, bids are free and the highest bidder pays that price for the item. I really like this idea in theory because it limits the number of people who can come in over the top of your bid, unlike at sites like Swoopo where anyone can poach the auction at the last second. However, I'm not saying it will be easier to win or that the prices will be lower in the seat auction, actually I don't think they will be because bids are free. I registered at Jungle Cents today and was given one free bid. Since there are no live penny auctions I went to the seat auctions of which there are six. The only seat costing one bid was for a iPod shuffle, so I went with that one. So far 12 of the 75 available seats are taken in this auction. The auction won't start until all of the seats are taken and as I got looking I noticed that the first seat was purchased on July 8th! So that person has been waiting weeks for this auction to start and only a small fraction of the seats have been sold. This isn't fair! People who buy bids to compete in these auctions expect their auction to start in a reasonable amount of time. At this rate it's going to take months before anyone can bid on that iPod!
I'm working on a study of which sites look legitimate, however in the meantime PennyAuctionWatch.com seems to be vigilant about exposing fraud and dubious practices.