How to Approach Penny Auctions

approaching runway

For the most part, novice bidders have very little experience with the pay to bid process. More experienced players have evaluated multiple strategies and determined the best course of action for their individual comfort level. Professional bidders tend to have a very aggressive approach regardless of their opponent. The biggest question is, “How do you know what is best for you?”

Bidders need to determine how much they are willing to lose before getting fully involved with the penny auction format. Set your weekly or monthly limits and stick to them. Don’t let the fun be ruined by money woes.

Which of these statements best fit your personality and level of assumable risk?

  • Lucky or Lose
  • For Fun and Friends
  • In-it to Win-it (within reason)
  • No Holds Barred

Regardless of which profile fits you, please take the time to set up separate accounts for penny auctions. E-mail, PayPal, credit or debit accounts and Facebook/Twitter. Your personal privacy and financial security are more important than online shopping.

Some bidders have established their Core Values and adhere to those values regardless of the auction style or site they are bidding on.

Here are a few of those values which have become known to me and the reasoning the bidders give on why they follow these tenets or why they may feel they are not compatible with their bidding style:

  • Do not machine gun an auction – Rapidly bidding immediately after another bidder overbids your bid:

The site generates revenue from the bids placed. When the “machine gun” tactic is used it leaves out those bidders who are waiting for you to give up or give in. Bidders also feel that pinch because there may be a strong bidder just waiting for you to tire out the opponent. Then you will follow with another bid war.

  • Stamp the auction early to let others know you intend to participate. This process may backfire if you are not the type of bidder that is auction online when the auction begins. For those very well-known bidders it also may detract from the income generated by the site, Some bidders have experienced retaliation from other bidders and this will also give them a heads up as to when you will be on the site and they may make it a point to participate in this auction.

No Retaliatory Bidding

One example is bidding against someone just because you lost fairly. The consensus regarding retaliatory bidding against someone who has jumped into your auction late or targets you repeatedly from site to site is less clear, especially for the buy it now sites. Be careful of making rash judgments! This bidder may also be looking for the same items you are, If they are bidding on all the home depot cards and you are too this is NOT usually an aggressive action.

Avoiding Collusion Concerns

This one can be a two – way street so always look at both sides when bidding. If you are friendly with certain bidders or related you may be caught in a catch-22. If you bid against your friend, others may accuse you of tag-teaming, If you don’t then you may be accused of being in agreement to not bid against them. Different bidders take different approaches so consider your stance carefully.
Respecting the sites terms and conditions in regards to the resellers. Every business has the right to restrict buyers and not sell to resellers, If they spell it out and you have been participating as a reseller they may takes steps against you including terminating your account. This is reasonable to expect since many retailers have the same policy.

Respect the site and site owners

Don’t use fraudulent cards to pay for bids, Never ask for a credit on bids just because you lost. Obviously if there is a problem with the auction itself it would be reasonable to ask for a credit in bids, but if you are bidding and experience lag or your computer freezes keep in mind it is all part of the game. Never file disputes for bids that you have used in legitimate auctions. This is important whether you won and they shipped the items or whether you lost. If you have a dispute later, it is not appropriate to chargeback for all bid packs just because the value of your win is the equivalent of all the bid packs you purchased. You are only entitled to dispute the bid packs and auction prices of items not received and fairly won.

Bid with Dignity

Know your limits and don’t make rash emotional decisions to buy more bids just to prove a point to another bidder. You may regret it later or have some explaining to do with your significant other.

Some tips for the novice bidders that have been successful for others:


  • Actively pursue bid packs on newly formed sites: I have heard that you typically have an overall profitable percentage of bids to value with this strategy. When the site then starts running higher value items as the site grows you may have a sizeable “bank” of bids. The alternative side to this is there will be more competition on the site at that time and you may still lose that bank of bids.


  • Start with sites that offer 100% Buy it now. This allows your bidder name to be recognized in the PA environment when you cross over to other sites which offer limited Buy it now or no Buy it now.


  • Watch a new site for several weeks before joining or at least before buying their “Jumbo“ bid pack. Watching individual auctions helps you to see which bidders will go all the way and which ones will only go to a certain percentage of retail. If the closed auctions are available check those out as well.


  • Never use personal information as part of your bidder name. Some sites promote the name of the city for their winners and you don’t want sore losers looking for you.


  • Never use funds reserved for bills or other necessary expenses for penny auctions. (As a side note, I have heard from one bidder who uses their grocery budget to bid on Buy it Now sites for Walmart and Target cards. If they win the funds are increased for the grocery budget and if they lose they still get their original investment back with only a small fee for shipping the card)


  • Be wary of any site! Find out everything you can about their site, customer service, shipping times and privacy policies. Even sites that are established may start having issues.

Successful penny auctions are constantly changing, upgrading and marketing to different venues So please be aware of what is going on with the sites you play on. If you want to play, realize the risk and take the necessary measures to protect yourself. Regardless of whether you are a power bidder or a casual bidder, no auction is ever worth losing your self-respect. Good luck to all!

This wonderful guest blog was sent in to us by our member, KSteven7! Thank You!

Discuss this article and share your experiences with penny auctions in our forum!

Image Credits: CC Attribution

-‘I Won!

Santa Monica Runway‘

Many Faces‘



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