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Penny auctions are a type of auctions where the buyers are supposed to purchase bid packages. The package price ranges from $0.10 to $0.25 which usually covers 100-500 bids. The money spent on a bid package is not refundable. The bought bids are used to bid for any product offered at the auction platform, which are usually consumer electronics. As a rule, a starting price on all of the goods is one penny. Every new bid does not only increase the price of the item by a fixed rate (1-2 cents) but also prolongs the auction duration for 10-15 seconds. Not all penny auctions are the same, each has rules of its own. For instance, the winner is not always the one who bids the most but sometimes it is the one who bids last before the given time runs out. In addition to the package cost, the winner also has to pay the shipping fees. Penney auctions usually offer good deals, the bidders may save up to 99% on cameras, iPods, cell phones, and other electronics. There are legitimate penny auction site, however, there are scams as well. For instance, at eBay penny auctions are used to cheat the feedback system.

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