An iPad for $3.20? A designer handbag for $41.80? It is possible, due to a new and growing segment of online auctions. Yet it's not as likely -- or as cheap -- as sites would like you to think.
Are penny auction sites a steal or a scam? SmartMoney.com's Kelli Grant tells us how these sites have moved from the fringe into the mainstream, and what to look out for before bidding on that gadget for a fraction of its retail price. ( Watch video)
They're called "penny auction" sites, because bidding typically starts at zero and goes up by a penny, and in the last two years, they've moved from the novelty fringe firmly into mainstream. Unheard of in 2009, there are now more than 120 such sites, according to Technology Briefing Centers, a consulting firm that tracks the sites. Like with other online auctions, the sites offer the possibility to buy, or win, gadgets, designer accessories or gift cards for a fraction of the retail price, and plenty are finding that alluring: Fifteen-month-old site BidHere.com, for example, boasts 1.1 million members in 22 countries and estimates that it gains 1,200 new users daily.