Medium riskMarketplace

Penny Auction Scam

A penny or bidding-fee auction site charges a fee for each bid placed, regardless of whether you win. Prices rise in tiny increments, and timers reset with every new bid, so auctions can run far longer than expected. Bots or shill bidders may extend the action, and most users spend far more on non-refundable bids than the item is worth, often winning nothing.

Quick verdict

Risk level
Medium risk
Scam type
Online auction scam
Main red flag
Each bid costs a non-refundable fee, so you can spend a lot of money and still walk away with nothing.
What to do first
Before bidding, add up the true cost: the bid fees, the final price and any shipping, and compare it with the normal retail price.

What to know first

A penny or bidding-fee auction site charges a fee for each bid placed, regardless of whether you win. Prices rise in tiny increments, and timers reset with every new bid, so auctions can run far longer than expected. Bots or shill bidders may extend the action, and most users spend far more on non-refundable bids than the item is worth, often winning nothing.

Marketplace scams target both buyers and sellers on platforms like Facebook Marketplace and classified listings. Fraudsters fake payments, send bogus "buyer protection" emails, push deals off-platform, or use overpayment tricks to make you ship goods or send money for nothing.

The core pattern to watch for is clear: Each bid costs a non-refundable fee, so you can spend a lot of money and still walk away with nothing. Before bidding, add up the true cost: the bid fees, the final price and any shipping, and compare it with the normal retail price.

Related tricks worth knowing: the Fake Online Store Scam and the Concert Ticket Scam. For the wider picture, browse the Marketplace Scams guides or run the message through our scam checker.

Scam statistics

$1.4B
reported lost to fraud that started on social media in the US in 2023
Source: US Federal Trade Commission
Top category
online shopping is consistently among the most-reported fraud types to the FTC
Source: US Federal Trade Commission

Tell-tale red flags

  • Every bid costs a fee that you pay whether or not you win, and those fees are not refundable.
  • The timer resets each time someone bids, so auctions can be extended almost indefinitely and rarely end when they appear about to.
  • Headline prices look extremely low, but they hide the cumulative cost of all the bid fees spent to reach them.
  • Suspiciously persistent last-second bidding that may come from automated bots or shill accounts rather than real buyers.
  • Pressure to buy large bid packs upfront, with marketing that emphasises near-wins to keep you spending.

Staying safe

  • Calculate the full potential cost, including all bid fees, before you place a single bid, and treat bid fees as money you may not get back.
  • Compare the item's normal retail price elsewhere so you know what you would pay outright without any auction.
  • Read the site's terms carefully, especially around bid fees, timer resets, auto-bidding and refunds.
  • Set a strict spending limit in advance and stop once you reach it, rather than chasing earlier losses.

How it usually reads

Example pattern, not a real report
Example pattern: "Win a brand-new laptop for under £5! Each bid costs just 50p and adds a few pence to the price while resetting the timer. Buy a bid pack now and start bidding. Hurry, the timer is almost up!"

This is a fictional, anonymised example used to illustrate the pattern. It is not a verified real message, and any names are used only to show how the scam typically reads.

What to notice: Each bid costs a non-refundable fee, so you can spend a lot of money and still walk away with nothing.

Steps if you already acted

  • Review your account and card statements to see how much you have actually spent on bids and packs.
  • Stop buying further bid packs and consider closing the account if you no longer trust the site.
  • If you believe charges were misleading or unauthorised, contact your card provider about a possible dispute.
  • Keep screenshots of the auctions, fees and terms in case you wish to report the site to a consumer body.

Common mistakes

  • Do not keep bidding to recover money already spent, as that usually increases the total loss.
  • Do not assume the displayed low price is what you will actually pay once bid fees are counted.
  • Do not buy large bid packs on the promise of an almost-certain win.

Scams like this one

High risk Online Shopping

Fake Online Store Scam

This scam sets up a convincing but fake store with very low prices, takes payment, and delivers nothing, a counterfeit, or a cheap substitute.

Created by Scam or Safe Editorial Team
Medium risk Marketplace

Concert Ticket Scam

Scammers advertise resale tickets for sold-out or popular events on social media and marketplaces. After you pay, often by a method that is hard to reverse, you receive no valid ticket, or a duplicate that will not scan at the door.

Created by Scam or Safe Editorial Team
Medium risk Social Media

Fake Giveaway Scam

This scam tells you that you won a prize or giveaway, then asks for a fee, your login, or personal details to 'claim' it.

Created by Scam or Safe Editorial Team

Your questions answered

Are penny auctions always a scam?
Not every site is fraudulent, but the model is designed so most bidders lose more in fees than items are worth. Some sites also use bots or shill bidding to extend auctions. Treat them as high-risk and read the terms carefully before spending anything.
Why do I rarely win on a penny auction?
Timers reset with each bid, so auctions can run far longer than they appear to, and other bidders, sometimes automated, keep the action going. Even when prices look low, the total bid fees spent across all participants can far exceed the item's value.
Do I get my bid fees back if I lose?
On most penny auction sites, bid fees are non-refundable whether you win or lose. That is the core of how these sites make money. Always check the site's terms, but assume any fee you pay to bid is money you may not recover.
How can I limit my risk if I try one?
Decide a strict budget in advance and stop when you reach it, regardless of how close a win feels. Compare the retail price first, and never buy more bid packs to chase losses. If charges seem misleading, contact your card provider.

Last reviewed June 2026 · Written & reviewed by the

Disclaimer: This page provides educational information only to help you recognise common scam patterns. It is not legal, financial, cybersecurity, or law enforcement advice, and it does not confirm whether any specific message, company, or person is genuine or fraudulent. When in doubt, contact the official organisation directly and report concerns to your local authorities.