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What is a "reserve price"?
A standard feature of every auction platform is to give the ability to the seller to decide the minimum amount they're willing to accept for the item(s) they are auctioning, regardless of what the auction ends at. If, by the end of the auction, this minimum amount (called the "reserve price") has not been met then the auction ends without a winner and the seller keeps their item(s). The reserve price is never disclosed to bidders; at most the auction details might inform you whether that reserve price has been met.
In regular eBay-style auctions reserve prices are not a big deal, since it costs nothing to bid unless you actually win the auction. But it is different with penny auctions like pennibids.com, since bidders pay for their bids in advance.
How does a reserve price work for a penny auction?
Great question! Without going into the details of how penny auctions operate behind the scenes (because they can be messy!), your bids, along with everyone else who participates, all add up together to a total which has very little to do with the auction's "final value price", which is the amount the winning bidder pays to claim their won auction merchandise.
Keep in mind that online auctions, regardless of whether they're penny auctions or more traditional auctions, will attract bids until the auction's final value price reaches a point where it doesn't make sense for anyone else to continue bidding. For instance, in an eBay-style auction, you would be very unlikely to place a bid that is higher than the item's retail value because that wouldn't make sense, unless the item is so unique or unusual that you would have a hard time finding it outside of that auction. With penny auctions, people generally continue to bid until the savings on the item are no longer high enough for them to continue bidding, at which point the auction ends.
Do all auctions on pennibids.com use reserve prices?
No. It is common (but not automatic) for auctions of more expensive items to use reserve prices simply because the seller needs to be assured they won't lose their shirt by auctioning their item(s). But there will definitely be many auctions every day where there will be no reserve price at all.
So what happens if an item I bid on has a reserve price that isn't met?
The good news is that at pennibids.com, you lose NOTHING if the item you're bidding on doesn't reach the auction's reserve price, if one is set. If your auction ends without reaching the reserve price then we will refund 100% of all bids. Our goal is to run honest, fair, and transparent auctions, so we will never keep a bid that we didn't legitimately earn.
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