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The deals advertised at online penny auctions can look amazing, but you could end up spending a lot of money, and losing the bidding war, in your pursuit of a great bargain on the perfect holiday gift.
Penny auction Websites offer up tantalizing ads on both TV and the Web, that promise as much as 95 percent off the retail price, and swarms of people are signing up for the piece of auction action at sites like Bidcactus, Bid Rivals, HappyBidDay and QuiBids. Sites such as these advertise deals such as $1,800 high-definition television for $73, or a $15 store gift card for 28 cents.
In our recent investigation, we discovered that actually winning a big-ticket item for pennies on the dollar from one of these sites can take an extraordinary amount of effort and is hardly a given. One key difference between traditional online auctions and penny auctions, is that you pay for your bids, and any bids you make is gone, whether or not you win. So if you've made, for example, 100 60-cent bids on a $2,000 computer but you aren't the winner, you're out $60.
"You could get a bargain, but generally, you stand a very small chance of winning the amazing deal they advertised," said Tony Giorgianni, associate editor, Consumer Reports. "For everyone who gets an amazing deal, many others spend a lot of money only to be disappointed.
The full report is available here.
Additional holiday shopping tips:
Video: How to save big on electronics
5 Tips to keeping holiday spending in check
Organized and hassle free holiday shopping
—Maggie Shader
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