As if the recession hasn’t claimed enough casualties this year, recent news has indicated it may be killing our love of gambling in this country. Lottery profits fell this year for the first time in nearly 40 years, as did state gambling revenues.
But one new Web site entices consumers to gamble their money yet again by bidding for bargain-priced goods.
Swoopo.com was started in the U.K. in 2007, but didn’t open in the U.S. until September 2008, right as the recession was gaining steam. The Web site offers heavily discounted electronics and accessories. It attempts to copy the success of eBay (Stock Quote: EBAY), while tweaking the formula in several crucial ways. Like eBay, it allows users to bid for discounted goods on a ticking clock. Yet, unlike eBay, Swoopo requires users to pay for each bid, even if they end up losing out in the end. In order to place an offer, you must first purchase a pack of virtual bid buttons (packs start at 40 buttons and go up to 1,000), at 60 cents a button.
The rules of the game are simple and absolutely addictive. Let’s say you’re interested in getting the newest Apple MacBook Pro (retail value is $1,799). The site sets the target sell price, which is usually very low (in this case, $35). First, you buy a pack of 40 buttons (cost: $24), and begin placing your bids. Every bid you make increases the initial price of the product ($0) by 12 cents, until the product finally reaches the target sell price and the clock runs out. But each bid also increases the amount of time on the clock before bidding ends.
Whether you bid once or a hundred times doesn’t really change your likelihood of winning out. All your bid guarantees you is an opportunity for an adrenaline rush. According to The Washington Post, one user who did win the MacBook ended up bidding 750 times (cost: $470). Of course, that’s still a heavy discount, but what about the person who bids 749 times for the same product and comes away with nothing? Perhaps this is why the Post also calls Swoopo the “crack cocaine of online shopping sites.”