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Many penny auctions use shipping & handling fees to increase their profits (or in some cases, decrease their losses). Bidders often recognize that shipping charges are slightly higher than they should be, but they bite their lip and pay the charges anyhow.

At the same time, bidders are left to wonder whether or not inflated shipping prices ever cross the line. For example, should a penny auction charge for shipping & handling when an item is going to be processed through Amazon?

What about giftcards? Is it really fair to charge $3-$4 to ship a giftcard?

I revisited some of these questions in my recent email correspondence with penny auction Quibids. So here’s the story:

After winning an LCD tablet with a retail price of $40, I was surprised to discover a shipping & handling fee of $12.99. Before I go any futher, here are two quick side notes:

  1. In fairness to Quibids – All Quibids shipping prices are displayed openly, and I failed to check the shipping price before winning the auction.
  2. In fairness to common logic -This LCD tablet is smaller than a DVD, so one might wrongly assume that the shipping price would be $5 or $6. Instead, the shipping price was more than 1/4 of the item’s value.

At first, I decided to give Quibids the benefit of the doubt. I thought “Who knows? Maybe the tablet is going to ship through a private vendor.” Needless to say, I was disappointed when the item arrived via Amazon. Quibids charged me $12.99 in shipping & handling fees when they never shipped or handled the item. To add salt to the minor wound, I knew that the item shipped for free through Amazon. When I emailed Quibids support asking whether or not the charges were fair, this is the response I received:

All of our shipping prices are not only based on what we have to pay for shipping but they are clearly displayed on every item on the item auction page towards the bottom of the page so that information is clearly available prior to determining to bid in an auction.

Though their response is true, it doesn’t address the question of whether or not the charges were ethical. So I replied with the following:

Is it ethical for Quibids to charge $13 for shipping when the item shipped for free?

And the response from Quibids:

We do not commit to a vendor until after an auction and we display shipping charges based on what we pay on average from the various vendors that ship various products.

This post isn’t designed to pick on Quibids. In fact, Quibids is part of our carefully-filtered penny auction directory, they offer an excellent variety of items, and we would recommend them to others without hesitation.

At the same time, their support team dodging an important question was a reminder that sites know what they’re doing when the set higher shipping rates.

So here are the questions to consider:

  1. Is this an issue worth discussing?
  2. If so, how should bidders respond?