Many penny auctions use shipping & handling fees to increase their profits (or in some cases, decrease their losses). Bidders often recognize that shipping charges are slightly higher than they should be, but they bite their lip and pay the charges anyhow.
At the same time, bidders are left to wonder whether or not inflated shipping prices ever cross the line. For example, should a penny auction charge for shipping & handling when an item is going to be processed through Amazon?
What about giftcards? Is it really fair to charge $3-$4 to ship a giftcard?
I revisited some of these questions in my recent email correspondence with penny auction Quibids. So here’s the story:
After winning an LCD tablet with a retail price of $40, I was surprised to discover a shipping & handling fee of $12.99. Before I go any futher, here are two quick side notes:
- In fairness to Quibids – All Quibids shipping prices are displayed openly, and I failed to check the shipping price before winning the auction.
- In fairness to common logic - This LCD tablet is smaller than a DVD, so one might wrongly assume that the shipping price would be $5 or $6. Instead, the shipping price was more than 1/4 of the item’s value.
At first, I decided to give Quibids the benefit of the doubt. I thought “Who knows? Maybe the tablet is going to ship through a private vendor.” Needless to say, I was disappointed when the item arrived via Amazon. Quibids charged me $12.99 in shipping & handling fees when they never shipped or handled the item. To add salt to the minor wound, I knew that the item shipped for free through Amazon. When I emailed Quibids support asking whether or not the charges were fair, this is the response I received:
All of our shipping prices are not only based on what we have to pay for shipping but they are clearly displayed on every item on the item auction page towards the bottom of the page so that information is clearly available prior to determining to bid in an auction.
Though their response is true, it doesn’t address the question of whether or not the charges were ethical. So I replied with the following:
Is it ethical for Quibids to charge $13 for shipping when the item shipped for free?
And the response from Quibids:
We do not commit to a vendor until after an auction and we display shipping charges based on what we pay on average from the various vendors that ship various products.
This post isn’t designed to pick on Quibids. In fact, Quibids is part of our carefully-filtered penny auction directory, they offer an excellent variety of items, and we would recommend them to others without hesitation.
At the same time, their support team dodging an important question was a reminder that sites know what they’re doing when the set higher shipping rates.
So here are the questions to consider:
- Is this an issue worth discussing?
- If so, how should bidders respond?
Feel free to share your thoughts and personal examples below.
As a consumer I can see why this article was written as I have too seen this happen on ebay or other sites as well. But as a fellow Penny Auction owner, we try to offer a fair charge for shipping and handling. One thing that is left off is that yes s/h may be free but there are sometimes sales tax associated with the cost of the item that the winner never sees. We do not commit to a vendor either but do try to use some well known companies such as Best Buy, Amazon, Walmart, etc. Walmart may charge $0.97 to ship a PS3 game and we charge $3.95. Do you think this is fair for us to charge this amount even though we never have to touch the item? You may think not but what if I tell you there is still record keeping involved with the order on the website, or that there is a $3.50 tax charge. Another example is we charge $2.95 for shipping on all Gift Cards. You may think this is a rip off but when a Visa Card or AMEX card is won, that is $3.95-$5.95 activation fee that we pay for out of our pocket. I would have to say that most of our auctions we lose money on the s/h charges but we try to charge a fair amount to help offset the costs to us as well as the consumer. Just some food for thought.
Hey Alan,
Thanks for your comments. It’s helpful for bidders to see things from an auction owners’ perspective as well.
I think most bidders are willing to pay reasonable shipping charges, and the costs you reference in your comment sound like fair shipping & “processing” costs.
At the same time, some sites clearly overcharge for shipping. I think in the long run those inflated charges hurt their business more than they help it.
I’ll have to agree with OP. I mean, sometimes the shipping and handling costs are ridiculous. For example, and probably the best example I can find, I’ve seen a 46″ TV with a shipping and handling charge of $16.99. Definitely fair, it’s a 46″ TV. It has to go from the vendor to the shipper then to us and everything in between. However, on that note, and ipod nano, something that weighs what, less than a pound? — Costs $18.99 in shipping right now. Now that’s flat out ridiculous. I understand that they’re trying to decrease their losses but that’s flat out robbery. Sure they make it viewable but I mean, like you said, most people fail to see that before they win so they’re kind of caught off guard and by that point they’re better off paying the charge otherwise they bid for nothing and they lose their item. I don’t know, I just find it dodgy. I’m still on the site but I’m very cautious and I read the fine print.