Is Lindsay Lohan's Ad for Penny Auction Site Beezid a Scam?
It couldn't be more fitting that Lindsay Lohan, while wearing an ankle monitor under house arrest for stealing a necklace, has made a commercial for Beezid, a penny auction site that many people have accused of being a scam.
As Madison Avenue veteran Avi Dan points out on Forbes, the ad is in some ways an act of genius:
Lohan is trapped in her house. How else is she to go shopping? She even underlined this irony on Twitter:
Not everyone is impressed. Like Lohan, Beezid does not enjoy a very good reputation on the web. Due to the subtle way in which it stages its auctions, and the large number of people who have complained about the company, many regard the site -- rightly or wrongly -- as a scam.What's a girl to do when she's at home? Jump online to Beezid.com and spend just pennies while shopping!
Beezid works like this: Users buy the right to bid at $1 per bid, or lower if they buy in bulk. Auctions for expensive items start at $0. Bidders can bid up the price a penny at a time, but each bid costs them $1. The last, and highest, bidder gets to buy the item. Bidders therefore attempt not to bid until the very last second. Therein lies the problem, most ably summarized on the blog MuskogeeUSA:
... when the timer is expiring and someone bids, the timer starts over, usually at 20 seconds, so an auction can drag on as long as someone is bidding on it.
If you do win, remember that your total cost is not just the bid. If you won a $1000 Macbook for $250, but you spent $500 in bids, then your actual cost is $750 + shipping. Not a bad deal, but you can see it's not quite as great as if you didn't have to pay to bid.Plus, Beezid gets to keep all the wasted $1 bids that didn't win the auction. In other words, it isn't a scam but it does take advantage of people who are not good at math or probability problems. (Which is to say, most people.) As long as there are more than two people attempting to place a final bid, the odds make it likely that any individual bidder will lose their final $1 bid credit.
There are many, many sites on the web complaining about the way Beezid treats consumers. The Better Business Bureau gives the site an "F" grade with customers (although, curiously, the Canadian version gives it an "A-"). On RipOffReport.com, there are 47 complaints about the company. Caveat emptor.
Interestingly, Lohan allegedly turned down an initial $25,000 cash offer to tout the site, but then accepted a revised offer once it included a $10,000 "credit" to spend on Beezid. Those of you who do understand how Beezid works -- and are wondering if those credits are for bids or for cash that can be put toward the final cost price of auctions won -- might well ask if Lohan ended up bidding against herself by lowering the cost of her sponsorship.
Related: