I came across this site while shopping for my wife’s Christmas gift (a portable navigation system, like a Garmin or TomTom). The prices were amazing and you know the saying, if it’s too good to be true, it probably is.
After reading more into the service I couldn’t believe the scam they were running.
My thinking is - you may be able to come away with a few deals on this site if you had a lot of historic data. If you knew an iPod sold for $100 the past 100 auctions, you could then immediately bid that amount and hope it was too high for others to bid, thus getting that item for $100.75 (with the price of your bid).
It all just seems to iffy for me to even want to take part in. Thanks for pointing out this shady service Jeff, hopefully others that aren’t as willing to read into what they are getting into will see this post first.
I can’t see why this would be considered any more illegal or unethical than a state-run lottery, though. It’s essentially the same system, and presumably the same dumb people getting suckered in by it.
What if they gave 15% of their gross to charity? Would that affect your opinion of them?
Regarding that endowment effect, it reminds me of a recent story about an otherwise sane older woman blowing $400,000 in retirement money by giving it to a Nigerian scammer because she just couldn’t stop:
A clever hack of human nature. Early on people pay the $0.75 bidding fee for the bid because the price is so low… the less than a dollar potential loss is far less than the savings. Later, the committed bidders who have run the price up suffer from sunk cost psychology and can’t stop bidding.
That all said, I’m not quite sure where the illegality is. It isn’t a lottery, as the winner is deterministic: the final bidder with the highest bid. Depending on how the terms of service has armored the $0.75 bidding fee against claims of fraud, this might just be one of those legal, only because nobody thought of it before cases.
I can’t see why this would be considered any more illegal or unethical than a state-run lottery, though.
Because it is … not state-run?
When you get people to pay 0.75 x 30 to increase the price 0.15 x 30 for something they will not get - yes, that’s evilishly smart. Maybe the perfect shopping experience: You get to pay money, getting excited by thinking that you bought it (for a while, until someone stupidly thinks it’s worth more than you, then, where willing to pay) and you don’t even have to fill your home with stuff you don’t need!
The clause doesn’t let them ship something equivalent; it says that in the event if a winning item is unavailable, they can offer you an equivalent item.
The distinction is that in this case, the winner must accept the offer; I interpreted your meaning as if they can arbitrarily ship you an equivalent item without your consent.
I hate double posting, but I just spent a few minutes watching the front page at Swoopo.
Never before has greed been more clearly displayed in all of its glory. The flash of red that indicates a new bid (and $0.75 more in the site’s pocket) is mesmerizing.
Unlike the earlier poster, I wish I had thought of this. No provisos.
Heh. We have had these things in Finland for a few months and apparently they still pull in new users. When fiksuhuuto.com was new, I did some logging (it shows the name of latest bidder on main page so that’s easy with some screen scraping) and found out that most users try just a few bids before they find out that if is not worth it. However, there were some users that put in hundreds of euros during the couple of days I collected data.
As far as I know, there is a lawsuit against them but it is progressing as slowly as lawsuits usually do.
This site is amazing. I simultaneously can’t believe that people would spend money to buy a bid, and at the same time I’m somewhat in awe of the dastardly assholes who came up with this cash-printing scheme.
This is an evil plan but I’m not willing to call it gambling. This seems no different than a seat licensing system. You pay for the opportunity to purchase an item. It just happens that you bid on the seat license and the item. Effectively raising your cost .90 each time. The outcome does not require luck and is deterministic.
Here’s a nice example of how purely evil (or bugged) swoopo.com actually is.
If two (or more) people have a BidButler on the same auction, they can get into a bidding war that can cost the users several dollars over the course of half a second.
I was watching a Wii auction and noticed the BidButlers bidding every now and then when the timer was almost up and the user wasn’t winning. However, at one point, the timer (which had been sub 15 seconds) spiked to about 5 minutes and I noticed two BidButlers battling it out in the bidding history. Each BidButler bid would trigger the other one to bid since it was no longer winning and the timer hadn’t updated yet. This was an easy $15 for swoopo.com.
That seems like something they could get into a lot of trouble for since the system is essentially stealing money, but I guess when you have no soul you don’t worry about that kind of thing. =/
Another thing… one supposes that the powers-that-be at swoopo will participate in an auction if it isn’t showing a profit-- Boosting an auction is a pure win for them, since bids don’t cost swoopo anything, and any ‘user’ (i.e., ‘sucker’) participation at a higher auction level is pure profit… right?