Is DealDash Legitimate? How Does it Work?

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DealDash is an online auction site that promises users the chance to buy brand-name merchandise at highly discounted prices. The site has come under fire for its policies and the way it structures its auctions, leading some to wonder if DealDash is a scam.

See: 3 Simple Steps You Must Take To Shield Yourself From Identity Theft

Is DealDash a Scam?

DealDash is not a scam. It’s a legitimate, albeit untraditional, auction site that has been in business since 2009. It’s registered with the Better Business Bureau, which gives it an A rating, indicating that DealDash is highly responsive to consumer complaints.

While DealDash is not a scam, it’s important to understand how it works before you participate in an auction. Otherwise, you could wind up spending more than you intended — and a lot more than the item is worth.

What Is DealDash?

DealDash is a penny auction site where you can bid on name-brand products and items from yet-to-be-discovered international designers and makers. The products are overstocks and excess inventory DealDash purchases from product suppliers and manufacturers. DealDash then lists the items as auctions, where, it says, winning bidders can purchase them at savings of 90% or more.

The site has completed millions of auctions since it came online in 2009.

How Much Does DealDash Cost?

DealDash auctions are pay-to-play, so you’ll have to pre-purchase bids in order to participate. Expect to pay $30 to start, although the number of bids you get for that price varies.

Bids are sold in bundles called bid packs. Undiscounted, a single bid is 60 cents, so an undiscounted bid pack of 100 bids would cost $60. However actual bid prices may change daily.

The price displayed to new users on Aug. 12 was 12 cents per bid, sold in bid packs of 500 bids. New users got 50% off their first pack, bringing the price to get started on DealDash to $30.

On Aug. 13, the only option for new users was a bid pack of 220 bids for $30, or 14 cents per bid, via the website. The mobile app offered a bid pack of 440 bids for $30, equaling just under 7 cents per bid.

How Do DealDash Auctions Work?

All DealDash auctions start with 10 seconds on the clock and an opening of $0. Each time someone bids, the price increases by 1 cent and the clock resets to nine seconds. Whoever makes the last bid before the clock runs out wins the auction. However, that can take many bids.

The winner of an Aug. 11 auction for a set of bamboo sheets, for example, had the 195th bid placed. They paid a total of $49.42 for the sheets — a winning bid of $10.42 for the sheets plus $39 worth of bids.

On Aug. 12, another bidder won the auction for the same product with a $13.85 bid but paid a total of $100.65 including their bids. That auction ran for 434 bids, extending the auction and driving up the price each time.

After the auction is complete, DealDash ships the item to the winner free of charge. Losing bidders can purchase the product at a “buy it now” price. If they do, their losing bids are credited back to their account.

Why Has DealDash Been Accused of Being a Scam?

Practices leading to accusations that DealDash is a scam justify scrutiny of its business model and policies — even in cases where part of the blame lies with user error.

Controversial Practices

DealDash’s pay-to-play model is one source of contention, leading some to liken it more to a gambling site than a legitimate auction site. That comparison stems from the fact that by selling bids, DealDash makes money on every bidder, whether they win or lose — and bidders pay whether they win or lose.

Inflated Prices

As noted previously, if you lose an auction, you can purchase the item for its buy-it-now price and get your losing bids credited back to your account. However, GOBankingRates explored those buy-it-now prices and found them to be grossly inflated. That’s because they typically reflect the manufacturer’s list price rather than retail price. The sheets mentioned earlier have a buy-it-now price of $250, for example. GOBankingRates found the sheets on Bed Bath & Beyond’s website (formerly Overstock.com) for $73.72, marked down from $77.99.

In another example, a stand-up paddleboard with a buy-it-now price of over $800, which is how it was also listed on the manufacturer’s site, was listed for just $104 on Walmart.com. Auctions for this item cost the winning bidder as much as $632, including the cost of their bids.

Confusing Website and Mobile App

While some users appear not to be reading the terms and conditions — the document has a full explanation of how the site works — the same complaints come up so frequently that it’s difficult to understand why DealDash has not made the website and mobile app easier to understand.

One common complaint on the BBB website is that registration on the DealDash mobile app triggers unapproved charges to a new user’s credit card or PayPal account. The individuals making complaints wrote that they’d added their payment information so they could see the auctions and decide whether to bid, but they hadn’t realized they were actually purchasing bids despite tapping a “Complete Purchase” button.

Users also misunderstand how auctions work on the website. Some believe they’re purchasing the item when, in fact, they’re just purchasing bids they can use to bid on the item.

How Not To Get Ripped Off on DealDash

Before you enter payment information on any DealDash webpage or mobile app screen, read the terms and conditions and support information carefully so you understand exactly how it all works. Also, don’t trust the buy-it-now prices — look up items online to find the retail prices. Finally, start with an auction for a low-priced item to see how you like the site. Your first bid-pack purchase is guaranteed for 90 days, so you can get a refund if you decide it’s not for you.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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