Evolution of eCommerce has paved the way for many opportunities. Unfortunately, every good brings along a few things bad too. E-commerce is an open playground for all and some illegitimate businesses have also had their day in the sun. Some businesses are outright illegal and sooner or later they get busted. But, there are some borderline cases where the legitimacy of the business is ambiguous and is often the subject of debates. DealDash is one such eCommerce venture, which has continued its operations rather legitimately but not without being frowned at. In this article, we will discuss whether DealDash scam or not.
Before getting into the legalities of the business, let’s first understand their business model. This will help us judge them better.
DealDash is the oldest bidding auction site in the USA. You must have seen many DealDash commercials on the internet and TV (the most popular featuring Barbara who won a $1700 HDTV for less than $30).
DealDash is a bidding site but nothing like eBay. On eBay, the bidders have to pay only when they have won the auction after outbidding the other bidders.
In other words, eBay bid winner pays only for the auction price. But, that is not the case with DealDash. A DealDash bidder has to pay for every bid. Each bid costs 60¢ and with every bid, the price of the item gets raised by 1¢. Here is how does DealDash work and is DealDash legit.
Let’s say the starting price of an item on which you wish to bid is $10. Now, with every 60 cent bid, you raise the price of the item by 1 cent. So, suppose that you are the first bidder and you bid on the item, you spend 60¢ and the new price of the item is $10.01. If no one bids further, you could buy the item at this final price. But, practically this is not possible. DealsCash has hundreds of thousands of users and lots of people are bidding on items.
Now, suppose you are outbid by another person, who has also bid on the item and paid 60¢ for it. This means that the price of the item will again increase by 1¢ and it will now be $10.02. You and the other bidders will keep bidding until no one is bidding and 1¢ will be added to the base price for each bid.
Let’s say you won the auction after 100 bids and there were 500 more bids apart from yours, the new price of the item will be $16 ($10 base price and $6 for 600 bids at 1¢ per bid). Eventually, you will have to pay $76 for the item ($16 auction price and $60 for 100 bids at 60¢ per bid)
But, in reality, if you choose to stay in this bid fight up till the end, you will have to probably bid many times more than this and there is no guarantee you will win. For instance, Barbara had to bid more than 420 times to outbid everyone else. She paid nearly $30 for the auction price of the TV and spent about $250 on bidding. So, in reality, she took the TV home for around $280.
This still is a great deal as the retail price of that TV is $1700. But, what we need to understand is that there was no guarantee that Barbara would win after spending $280. And, what’s more incredible is that fact that DealDash would never tell you how many lost their money before Barbara could win the TV (and there must be many)
The problem is that the more a user invests the money in bidding in trying to win the product, the more likely he or she is to bid more. After having spent so much money on bidding, you would not want to leave it on the table until the auction results are disclosed. You would want to give it a shot. But, you can never tell when the auction will truly end. Therefore you stand to lose more than you can win. This does not borderline on gambling – for many, this is true gambling!
Is DealDash Legit?
Technically speaking, DealDash is a legitimate business. It has been operational for several years and has never had to shut shops owing to involvement in any legal issue. Of course, the company has faced the backlash from media as well as from the users for offering little or no value to its customers. DealDash has also been the subject of criticism for disclosing vital aspects of the business only in the fine prints
Sometimes the auction price you pay for the product could be significantly higher than the market price. The company has never refrained from misleading the people through its cleverly crafted commercials that easily slip through the cracks in the laws. For instance, in one of the commercials, an auction winner was shown to have won a product worth $350 for less than $25. However, after taking the bid money into the account, she had actually paid nearly $480 for the product, which was apparently much higher than the retail price.
The prices shown in their commercials are truly misleading. However, DealDash is still legal because you accept the Terms & Conditions at the time of registration, which clearly states that you may have to pay the price higher than the retail cost.
But there is a silver lining to it. There are two aspects of this business that could keep you from losing money:
- They have the satisfaction guarantee on first bid pack you buy. If you are not satisfied with the services, you could have your money returned for the first pack of auction bids purchased.
- If you are a losing bidder and you buy the item from DealDash at the full retail price, your bids are returned to you. You could use those bids to bid on any other item on auction on the site
Conclusion- How Does DealDash Work
As far as the laws are concerned, DealDash is a legitimate site. It has laid out its business model clearly in the Terms & Conditions. But the strategies used in commercials can easily be dubbed as amoral. As a user, you are more likely to lose money on this site than win an item at a lower price. In simple words, you would be better off not using the site. So now you know DealDash is a legit not a scam.