Online penny-auctions and Consumer Protection Regulations

Synaesthesia

Executive Member
Joined
Feb 1, 2007
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5,406
#2
Smokoo is such a complicated system - I think it's fair to call it somewhat misleading. Not only do you have to multiply the value in rands by 20 or 100 to get the real value, but you aren't really bidding on an item! It's a total lottery as to who wins.
 

Vlad

Senior Member
Joined
Mar 5, 2005
Messages
695
#4
finally...
i met one of the founders... told me that if parents spent all their money on his site trying to buy cheap xmas presents for their children, yet ended up losing (spending) so much they actually couldn't afford to buy anything at all in the end, he doesn't care.

sure, the site might be legal, but its immoral
 

stricken

Expert Member
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Sep 5, 2010
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#5
Smokoo is such a complicated system...
There's nothing complicated about smokoo. Each bid adds either 5c or 1c to the items price (depending on the value of the product - it is advertised), so you can work out how many times people have bid, yet, each bid costs the bidder 1 credit = R5.00 to do so. Thus, even though there is a bidder that gets a product on the cheap, there are actually tens to hundreds of other bidders, thus paying for the product many times over.

Smokoo IS A SCAM! How dare they claim to be an Auction with a straight face. Easy come, easy go... OFF WITH THEIR HEADS!

On the other hand, if people are stupid enough to blow their money on this drivel, they probably deserve it.
 
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Jan

Drifting in the black
Joined
May 24, 2010
Messages
4,584
#6
Smokoo is such a complicated system - I think it's fair to call it somewhat misleading. Not only do you have to multiply the value in rands by 20 or 100 to get the real value, but you aren't really bidding on an item! It's a total lottery as to who wins.
I don't think it's accurate to call it a lottery in the strict sense of the word as the winner isn't drawn from a pool of entrants. Similar to an auction it's about whoever bids last. It is still quite unlike conventional auctions though, as the eventual price you pay isn't just linked to the bid price but also the amount of bids you had to put in to win.
 

rbarryza

Well-Known Member
Joined
Apr 8, 2006
Messages
282
#7
In terms of the Gambling Act, a gambling game is a game that requires one to pay (in any form) to play the game, and if by playing the game the person would be entitled to receive a “pay-out,” Michalson explained.
Wait, so any professional sport is gambling according to Michalson? Pro sportmens (like golfers) pay an entry fee to a tournament, and are entitled to receive a pay-out by playing the game.
 

Synaesthesia

Executive Member
Joined
Feb 1, 2007
Messages
5,406
#10
I don't think it's accurate to call it a lottery in the strict sense of the word as the winner isn't drawn from a pool of entrants. Similar to an auction it's about whoever bids last. It is still quite unlike conventional auctions though, as the eventual price you pay isn't just linked to the bid price but also the amount of bids you had to put in to win.
Sure, lottery is probably not the most apt word, but you really take a chance every time you bid, since there are 10 more seconds during which anyone can bid.
 

Trixanno

Senior Member
Joined
Mar 27, 2006
Messages
780
#11
Wait, so any professional sport is gambling according to Michalson? Pro sportmens (like golfers) pay an entry fee to a tournament, and are entitled to receive a pay-out by playing the game.
So are the machines in arcades. Some of the machines reward you with tokens, and those tokens you in turn use to buy the fluffy teddy bear for your Gfriend.
 

F1ve_Claw

Senior Member
Joined
Mar 18, 2010
Messages
963
#12
Can't say I have the money to spend on testing the site out but I'm pretty sure if I did I would end up loosing the money
 

McT

The Humble Scot!
Joined
May 19, 2009
Messages
35,055
#14
Great news. The PPI and CPA will also impact on spammers and the annoyances of direct marketing too. Long overdue.
 

zamicro

Expert Member
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Oct 22, 2007
Messages
3,818
#15
There's nothing complicated about smokoo. Each bid adds either 5c or 1c to the items price (depending on the value of the product - it is advertised), so you can work out how many times people have bid, yet, each bid costs the bidder 1 credit = R5.00 to do so. Thus, even though there is a bidder that gets a product on the cheap, there are actually tens to hundreds of other bidders, thus paying for the product many times over.

Smokoo IS A SCAM! How dare they claim to be an Auction with a straight face. Easy come, easy go... OFF WITH THEIR HEADS!

On the other hand, if people are stupid enough to blow their money on this drivel, they probably deserve it.
Nicely said. Especially the last 2 statements!
 

Sodan

Expert Member
Joined
Nov 25, 2010
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2,720
#16
I don't think it's accurate to call it a lottery in the strict sense of the word as the winner isn't drawn from a pool of entrants. Similar to an auction it's about whoever bids last. It is still quite unlike conventional auctions though, as the eventual price you pay isn't just linked to the bid price but also the amount of bids you had to put in to win.
[-]It's not at all linked to the bid price.[/-]

Oh, actually, it is. My bad.
 
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nelwa

Expert Member
Joined
Oct 30, 2006
Messages
1,073
#17
I've won about R20 000 worth of items on Smokoo and spent about R 8 000 in total on the site. I regard myself quite lucky however. I kept a close eye on the Mercedes they auctioned off last year, the winner spent about R 50k worth of bids on it, but there was another guy "myusername" or something like that, who was bidding from the beginning in that auction, and if I should guess, spent more than R 100k worth of bids on that car, and has nothing to show for it.

The biggest problems I have with smokoo are:

1. False advertising, they claim savings of say 98% on an item, but they conveniently leave out the amount of bids a user spent on that item in the calculation. Most items that state a 95% saving or less, actually means that the winner made a loss on the item.
2. Not all auction results are shown on the site, only items that went for quite a "bargain".
3. Their advertised worth of items on auction are highly inflated, usually about 20% more expensive than the most expensive online offer you can find on the very same product.

I must be honest, they have a very profitable business model, which I would have like to be a part of. I've seen iPads that brought in over R 120k worth of bids. Sure some items go for less than they're worth, but on average they make huge profits on each item.
 

quovadis

Expert Member
Joined
Sep 10, 2004
Messages
2,274
#18
Wait, so any professional sport is gambling according to Michalson? Pro sportmens (like golfers) pay an entry fee to a tournament, and are entitled to receive a pay-out by playing the game.
A closer analogy is that every time a player performs an action on the "field" they have to fork over some money for the pleasure of playing.

The problem with smokoo is automatic bids - the guy with the fattest wallet will most likely always win - there are a few lucky people but that is the exception rather than the rule. If the people were actually having to stay up and use stamina to keep the bids going instead of automatic bids then it would be more of a skill as a game of chance as it is now. Consider numerous of their auctions which have been in their "final" moments - ie. the last 10 seconds for 7 days straight 24/7/365 it does get a bit ridiculous.
 

Jan

Drifting in the black
Joined
May 24, 2010
Messages
4,584
#19
It's not at all linked to the bid price.
Really? I was under the impression that you still have to pay the few Rands worth on the bid price after winning. It's certainly not a major factor, but it is a variable in the equation.
 
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