Guidelines for Penny Auction Site Owners

Prospective and current penny auction site owners often ask what they should do to provide a positive experience for the penny auction bidder, so here are a few guidelines for running a legitimate penny auction site.

What Not to Do

  • Never, ever, ever shill bid- Don’t use fake admin bids/bots, this can be a script or it can be the site owner bidding. against customers or users that are employed by the site to bid and are not paying for the bids.
  • Never divulge users personal information to a third party. Make sure you do not fail to BCC e-mail addresses when bulk mailing.
  • Never tell other bidders how many bids another bidder has.
  • Never give out free bids under the table.
  • Don’t false advertise, don’t use “fake news advertorials” or create shill watchdog sites.
  • Never pretend you’re a customer of your own site, this is shill reviewing and is prosecutable (see United States v. Denlinger).
  • Don’t inflate retail prices.
  • Don’t have hidden fees or fine print, display terms & conditions in a readable font.
  • Don’t auction off items you cannot afford to lose and do not intend to fulfill.

When to Invalidate an Auction

  • Server side malfunctions – i.e. your site goes down or auction glitches occur causing an auction to either end prematurely or not allow all bidders an equal chance to bid.
  • If collusion can be proven.

Your Obligation to Customers

  • Adhere to business ethics principles: transparency, reliability, and honesty.
  • Respond to customer support inquiries as soon as possible.
  • Ship items quickly (within 30 days or a time frame clearly specified). If an item is back ordered or unavailable, let users know ASAP.
  • Consumer privacy is your obligation..
  • Describe the condition of your items, are they new, used or refurbished, make sure you clearly disclose this.
  • Use correct item photos.
  • Clearly post shipping costs.
  • Clearly state “Bid-to-Buy/Buy-it-Now” terms.
  • State your return/refund policies.

The FTC’s Tips for Buyers & Sellers:

“If you have problems during a transaction, try to work them out directly with the seller, buyer, or site operator. If that doesn’t work, file a complaint with:

  • The attorney general’s office in your state.
  • your county or state consumer protection agency. Check the blue pages of the phone book under county and state government.
  • the Better Business Bureau.
  • the Federal Trade Commission. File a complaint online at” – Source FTC.GOV

This list is by no means a complete or exhaustive guide, but if penny auction owners follow this we believe that they’ll be on the right track to pleasing their customers and running a successful penny auction site.

If anyone has any suggestions or recommendations to add to this list, please, by all means, let us know!

Discuss and review penny auctions in our forum!

AttributionNoncommercialNo Derivative Works Some rights reserved by Steve Kay – homepage slider image credits.

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4 comments… add one
  • Charles Walthour December 14, 2010, 4:24 pm

    Thanks for posting this. We will have our website up on April 1 and this is an excellent article. Our #1 objective is unquestionable integrity. Our #2 objective is customer service…right now! Our #3 objective is “the best website in the business”.

    Your article will be a great intro for our meeting next week.


    Charles Walthour

  • BidBidz October 9, 2011, 12:37 am a revolutionary reserve penny auction which gives you a fun and exciting, fast-paced way to shop and save over 90% on brand new products .


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