Have you seen those cool, catchy, DealDash commercials on TV?
Maybe the one where Barbara says she won a 55″ HDTV worth $1700 for just $29.95?
Cool! But it begs the question – is it real? Is DealDash legit… or a scam?
Let’s lay out the facts.
DealDash.com works much like Quibids, which we took a look at a couple of weeks ago.
Both sites are – bidding fee – auction sites.
They are very different from a regular auction site like eBay. On eBay, if a bidder is outbid, they don’t pay anything. Only the bidder that ‘wins’ the auction pays.
On DealDash – every – bidder pays a bidding fee – every – time they bid.
The cost? 60¢ per bid.
Each bid raises the price of the item by 1¢.
So, let’s say you start bidding on an item when it costs a dollar. You raise the item’s auction price by 1¢ (that’s the max you can raise it with one bid). You are charged 60¢ for the bid you placed. But you are immediately outbid. Now the item is $1.02 (your bid and the other bidder have raised the price by 2¢ with those bids).
You want the item, that’s why you bid in the first place. So you bid again, and are immediately outbid again. Now you’ve spent $1.20 – whether you end up winning the item or not.
If you end up bidding 10 times, you’ve spent $6, and raised the price by 10¢. If you bid 50 times, you’ve spent $30 – whether you win the item or not – and raised the price of the item by 50¢.
If you consider that 20, 30, or more (perhaps many more) people could be bidding on an item – most of those people will lose the auction. Only one will ‘win’ and get to pay the auction price. Everyone else will have spent their money on bidding fees and won’t receive anything at end of the auction.
The big variable here is not knowing when other people will stop bidding. In a regular auction, there is a limiting factor. People will (normally) stop bidding once the cost of the item is more than it’s actually worth.
With DealDash and similar sites, that limiting factor is gone. The real worth of an item is taken out of the calculation. The bidding fees are the expense – and the more a consumer has invested their money in trying to get the product, the more reluctant they will be to stop bidding. No one wants to leave money on the table, but there’s no telling just when the auction will end. It’s like a spin of the wheel – which is why many say DealDash and similar sites are gambling sites.
DealDash does have a system in place in which the bid fees spent on trying to win an auction can be used
as a credit to buy the item at its regular full price. Update: thanks to reader Tedde Bear for pointing out that is incorrect – DealDash has a system in place in which if the losing bidder buys the item from DealDash at full retail price, the bids used to bid on that item in that auction will be returned to the bidder. Tedde has a long comment below with additional information and some great insights.
Let’s jump back to Barbara Seller, who is featured in one of DealDash’s current commercials.
In the commercial’s small print (briefly displayed in black text, against the dark purple background of her sweater), it says she bid 414 times to win that 55″ TV for $29.95.
That means she spent $248.40 (414 x 60¢) in bid fees, plus $29.95, for the TV. A total of $278.35, not the $29.95 that’s suggested in the commercial. And she would have lost that $248.40 if she had not won… unless she decided to go ahead and buy that $1700 TV at full price. (In that case, she would be credited back with those bids and be able to use them again on another auction.)
Also in the fine print on the commercial it says these “results are not typical”. In other words, this example was hand-picked as one that is flattering to DealDash.
The important thing to know about DealDash is that everything is explained in the fine print. The costs and the way that the ‘auction’ works is spelled out very clearly in their terms. The devil is in the details – those who read through all the information carefully will know what they are getting into.
It’s also important to note that DealDash does offer a money-back satisfaction guarantee on the first pack of bid-fees that a new user buys. After reviewing a list of complaints about DealDash at the BBB, it appears that they do honor the guarantee (at least if one complains to the BBB). We should note though that the BBB also said that, in the past, DealDash has misrepresented itself as being a BBB Accredited Business when it isn’t.
So is DealDash legit or a scam?
If that question is based on them doing exactly what they say they do (in the fine print) we’d have to say they are legit.
Is DealDash a good deal for shoppers on a tight budget that are trying get a great deal on something? No.
And are the DealDash commercials on TV misleading? Absolutely.
Based on the commercials, one could easily be misled into thinking that DealDash is just a normal auction site, something like eBay, and that bidders are getting ridiculously good deals… iPads for $5 and the like.
But in reality, the prices quoted in the commercial are a misrepresentation of the amount actually spent by the bidder. And the idea that DealDash is just a regular auction site is an illusion.
Have you used DealDash?
Tell us about your experience below!