Is DealDash a Scam?


Jessica Lee
Updated 27 May 2021
Is DealDash a Scam?
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DealDash is a Scam

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Mostly False

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Although DealDash has been sued for false advertising, it has not stopped this large penny auction site from success with a reported 8 million registered users.

There are elements of scam-like behavior (advertising prices that are too good to be true), and there's a trail of many disappointed customers. However, DealDash.com simply falls into the 'buyer beware' category. It will cost you money to chase deals as you must pay for each bid (60c at full price), and you may lose more in bidding than you actually save. But there are deals to be had on the site if you are willing to risk your time and money. 

United States Scam & Fraud Statistics 2020


$3.3 billion total fraud losses
4.7 million fraud reports

1.4 million reports of identity theft

Source: 2019-20 Consumer Sentinel Report

Sections on this page
  1. How DealDash Works
  2. Why the Controversy?
  3. So...Is DealDash a Scam?

DealDash.com is an online penny auction website where people pay small bid fees to bid on products in the hope of winning the items at extremely low prices. Many people leave the site disappointed. 

The 'live auction' prices only rise by 1c per bid, but there are many bidders on popular items, and prices can rise quickly (and auctions can last over days). As each bid costs the user (typically around 60c at full price depending on bid pack), it is important to know that DealDash is making 10-13c in revenue for each 1c that the price is bid-up by users. 

Auctions must have only one winner and multiple losers who miss out. Therefore, it's important to note that the difference between an auction site like eBay and DealDash is that with DealDash, users are paying each time they bid, and therefore many people are paying to lose. This can greatly upset people and has been called an 'illegal lottery' in lawsuits, but DealDash continues to operate and entertain millions of users per year. 

With DealDash you are paying to bid to win an auction, and paying to bid, even if you lose. 

The company claims to change the world of online auctions, allowing users to secure great, name-brand luxury items for only a fraction of the retail price. The DealDash advertisements feature huge discounts of up to 90%. 

DealDash

The company promotes itself as a fair and honest bidding site, but its detractors see it as more of an illegal gambling site than a pure auction site as many people lose money chasing a deal. 

It is important to note that at the time of publishing, the site does have decent review scores from users, for example:

  • Facebook: 4.2 out of 5 from 3251 people (May 2021)
  • Better Business Bureau: 4.11 stars out of 5 from 149 reviews (May 2021)

How DealDash Works

During a DealDash auction, there’s a 10-second timer that resets whenever a new bid is made. When the timer runs out, the last bidder wins the item. The winning bidder must purchase the item at the same price that concluded the bidding war.

If you lose a bid, DealDash gives you the option to buy the item you were bidding on for the retail price, and they return the bids you made on the item. However, if you choose not to buy it at retail price, you lose your bids (and the money you spent on the bids). 

Bidding

To bid, you must purchase bid credits, and each bid credit costs 60c at full price (sold in packages), so it is important to remember that with DealDash, you are paying for the thrill of the chase. 

  1. Auctions start at $0 for an item and increase by 1c from each bidder
  2. Auctions extend with every bid where each bid extends the timer by 10 seconds
  3. Every bid costs the bidder money, and the last bidder wins, paying for the item at that price

How Deal Dash Works
How DealDash Works (from Company video)

Costs Can Add Up

If you end up with a winning price of $400 for an iPad and placed 100 bids (at the current sale price of $0.13/bid), your actual cost is $413 (100x0.13). If you've done this multiple times and missed out, your total cost can really add up. 

Why the Controversy?

There are three simple reasons why DealDash.com has been wrapped up in controversy, ranging from refund requests to illegal lottery accusations.

  1. Paying to bid: By paying to bid and having to bid many times for any chance of success, some users lose a lot of money. For example, Grant Pstikyan says he spent $5,923 buying 44,250 bids on DealDash’s website in November and December 2016. He says he spent still more money on the bids themselves but lost most of the auctions.
  2. Non-genuine items: DealDash has also been accused of passing off generic items as luxury with unrealistic list prices to induce competition around a perceived deal.
  3. Inflated prices: DealDash has been accused of inflating prices on items to make the 'deal' price look like more of a deal. 

When using DealDash, there’s a chance you could lose all your money. As such, DealDash was accused of running an illegal gambling site. DealDash refuted these claims by saying every bidder has the option to choose when they want to quit.

Another controversy surrounding DealDash was the claim that the site used false advertising to trick users into bidding for products. In television commercials and the company’s informational video, DealDash claims they provide customers with name-brand products such as Playstation, Sony, and Apple. Yet, in 2017, they faced a class-action lawsuit that claimed the company sent out generic, off-brand items that were nowhere near the price advertised on the DealDash website. According to the United States District Court of Minnesota, the defendant in this lawsuit voluntarily dismissed the case, and no further information has been posted about these claims.

How DealDash Makes Money

In a previous interview, DealDash said that it makes about half of its revenue from what users pay in bids and the other half from the commission/margin from the items that it sells at full price through the 'buy it now' process. 

DealDash Does Have Better Business Bureau Accreditation

Despite these claims of running a gambling site illegally and scamming consumers with low-quality products, DealDash is still accredited by the Better Business Bureau  (BBB) with an A+ rating. 

Although they have an impressive rating on the BBB website, it might be due to their 100% money-back guarantee. The BBB doesn’t evaluate a company based on its product or service. Instead, they strictly rate companies based on how it interacts with and helps its customers, so this isn't necessarily a rating on the DealDash's business model or practices.

An overwhelming number of people claimed DealDash charged their account on the BBB website simply because they downloaded the app or made an account.

Other people made claims that DealDash operated on a bait-and-switch method, where they enticed users with luxury, name-brand items, convinced users to purchase or pay the upfront fee, and then never auctioned off the expensive things they advertised.

So...Is DealDash a Scam?

Technically, DealDash isn't a scam, as it does operate as a fair auction website where some people will get a great deal. However, there are many caveats that readers need to be aware of:

  • Trial by fire: It is extremely unlikely that you will log in on your first attempt and get close to paying the advertised $23.13 for a new iPad. 
  • You will get burned: When you sign up and buy some bids, it is easy to waste your bids—you will feel like the site has burned you.
  • It is gambling: If you are genuinely shopping for deals, you are gambling on the chance of a deal with DealDash.
  • You might like it: If you want to risk and play games against others, you might really like DealDash.

We would typically advise against sites like DealDash.com, as you need to be very lucky to be in the right place at the right time to score anything like the advertised deals.

Anyone who is thinking of trying DealDash should beware that it’s incredibly high risk. While there’s a chance for a big payout, the odds are it won’t happen to you unless you have unlimited resources to buy bids and endless amounts of time to watch the clock.

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