While many see online penny auctions as a form of high-risk, high-reward entertainment; others have compared them to wagering websites that prey on unwitting consumers. Recently, some of these sites have begun advertising on television, with a few even hiring celebrities and former sports stars to help sell their products. Still others use promotional schemes to lure a new crop of customers into an auction format they aren't familiar with. One company called Qui Bids offers coupons to attract new members; unfortunately, a QuiBids promo code may end up costing the average consumer in the long-run.

A different kind of auction

Although some people enjoy participating in penny auctions, most don't really understand how they work. Unlike traditional auctions, where only the winner is asked to pay, penny auctions require members to buy their bids and then place them at risk. In the end, they lose their bids whether they win the auction or not. Although winners may secure considerable bargains; everyone else loses, except the auctioneers, who are able to profit both by selling the product and by collecting from failed bidders.

QuiBids promo code attracts newcomers

Ultimately, these auction sites make a lot of money off of bargain hunters who are unfamiliar with this type if auction concept. While many penny auctions use television to connect with less savvy shoppers; others, such as Qui Bids, use coupon codes. Typically, these provide customers with up to $15 they can spend on bid credits which they can use on an auction. That said, very few members win an auction spending only $15, and the initial excitement tends to prompt newcomers to invest more and more of their own money, while chasing products they aren't likely to win.

What bargain hunters should know

The Better Business Bureau decided to throw penny auctions into its list ranking the top scams of 2011, and there are a large number of online reviews complaining about a QuiBids scam. That said, despite the BBB's warning to consumers, it has given QuiBids.com an A- rating; however, it strongly advises consumers to read all of the site's rules prior to participating. According to the organization, most consumer complaints center on a failure to understand the site's high-risk concept.

If you enjoy this type of entertainment, this site might be right for you; on the other hand, if you are thinking you'll be able to redeem your Qui Bids promo code in exchange for cheap merchandise, you'd be well-served to follow the BBB's advice and thoroughly read over the site's terms of service.