Fraud or Fair Gamble?

With the prevalence of private sale sites comes the new way to play – online auctions. They’re not just any old auction, though, making Ebay seem tame.  Sites like OohILove are starting to crop up, along with a lot of debate as to whether or not many of these sites are scamming consumers.

I’ll admit, I was curious and considered a whopping $30 worth of bids a post-worthy investment.  Call it investigative journalism – and I’m totally Fletch.  I was incredulous that anybody would win Tiffany jewelry, Louis Vuitton bags or anything else for pennies.   After reading through the site though, the immediate business plan became clear.  As Michelle Madhok from the Huffington Post so aptly put it:

OohILove gets products from the boutiques. (And they can afford to.) The site never claimed to source the products at the bargain prices they sell for; on OohILove, shoppers have to pay for bids, which means the site gets paid even if you don’t win. A rep from OohILove confirms the company buys all of their items from designer boutiques, department stores, or stores that are authorized resellers.

If 200 women each buy one 50 bid package for $50, the company makes $10,000 (that’s nine Louis Vuitton Alma bags).

What about the consumers who felt scammed?  They say they felt tricked – and they were - in the way that you’re not automatically going to winif you toss a ten-spot on the Craps table.  OohILove is not a scam, and their Better Business Bureau score reflects that.  The fraud claims filed against OohILove seem to all conclude in the same way – in signing up for the site and buying bids you are agreeing to the site’s clearly stated terms.  The auctions are a gamble, but they’re fair as far as the site terms go.  It seems that the story of many disgruntled customers is the same:

I am glad to hear that I am not alone in being “scammed.” I saw this on the news, and it was a great way to buy designer items at very low prices. After 2 times buying $99 bid packs, (eeeeeeeeek) I feel scammed by the site. Having a few people look over my shoulder, they determined that the auction end is arbitrary. So it looks like there is a price selected and when it hits, you win. I feel scammed and will be contacting the attorney general of CA about it, although they have bigger issues to worry about…..and I just should have known better! :(

The end auction is not necessarily arbitrary – whomever has the highest bid and is using the bid assistant will ultimately win.  I tried it, fully understanding how the site terms worked.  You buy bids – you will NEVER get that money back.  You bid on an item – and it helps to use the bid assistant, to use odd numbers like 15.03 and to be patient.  I realized that if I didn’t win an item all the bids I used, that $30 I just spent, would go towards another bidder’s purchase and I’d never see it again.   Yet, I won.  I actually won a beginner’s auction using those tactics, and paid approximately $2.00 for a Tiffany pendant… if you don’t factor in the $12 in shipping that they charge for every order and the bids wasted not winning this item.  It’s worth noting that the beginners auctions seem easier to win – you’re not up against a gaggle of other gamblers who are practiced at winning auctions and ruthless in how much they’re willing to spend for a piece.   For example:

I just watched an auction on this website for the Louis Vuitton Galliera bag. The winner spent $1,362.08. This bag costs $ 1,280 for the 16.5″ x 11.4″ x 6.7″,  purchased directly from Louis Vuitton. If you are taking part in these auctions with the purpose of buying the item, regardless of whether you win or not you might want to cheek out the real retail value of the item.

This piece retails for $115.  I paid:  $30 in bids + $2 for the auction (-$4 in bids spent on the auction) + $12 in shipping.   The pendant cost me approximately $40, if I don’t win anything else with the bids I had left over.  If the bids I still had in my bank had won something else, the price for the pendant would decrease, of course.  But is it worth it?

My only beef with the entire transaction – and trust me, I understand the gamble and risk behind it – was the customer service.

When you want to contact OohILove for something – for example, to find out their shipping methods – you have to email them.  There’s no contact number to be found on their site.  After a lot of digging on the net, I found a suitable phone number for them, that was promptly answered by voicemail.  I don’t trust companies that I can’t call to talk to a customer service rep.  You lose accountability in a company when you’re emailing a general email address, because your issue could be handled by 1 or 10 people.  There’s not any one responsible agent who is willing to help you right there (and it could be that I have great luck with call-center service reps).

My customer service complaint was actually address based.  Like a smart cookie, I opted to use Paypal for the transaction – and OohILove only ships to confirmed Paypal addresses.  However, they emailed to say I had an unconfirmed email address and they’d be unable to ship the item unless I could verify who I am (as part of their terms).  They asked for a piece of mail or other document with any sensitive info blacked out (their email suggested a bank statement!?  Are you kidding?) or a scan of my driver’s license (also, are you kidding?).  That seemed like a prime way to have my identity stolen.  I opted to call Paypal, who contacted OohILove to confirm that I am who I say I am.  The Paypal rep noted that it’s probably for their protection since they have limited seller protection on Paypal – but she also noted that OohILove’s site generated the “unconfirmed” address that they had on file.

After spending a few hours back and forth between Paypal and OohILove, OohILove gave up and emailed to let me know they were shipping my item UPS ground (oh. yay.).   The item came with the authenticity card, in a small blue box, wrapped in ribbon and Tiffany watermarked paper.   Though I was delighted at owning my first Tiffany piece, I felt that the entire transaction left something to be desired.

I went back to the site later to see if I could score a second time with the rest of the bids I had.  I did the deed about the same time I’d bid on my Tiffany pendant.  I used the same technique to bid on a pair of Chanel sunglasses and promptly burned through the remaining bids.  I felt a little cheated like you do when you lose a hand at blackjack and remembered why gambling is okay when done in moderation.  I’m still technically “up” $75 on this Tiffany pendant, right?

For further reading on online gambles and your shopping habits, check out this post by Yuli Ziv on Private Sales, Gambling and the Dangers of Innovation…