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Smokoo: Scum but not Scam... technically

Posted by: tally

Tagged in: south africa , smokoo , online , gambling , auction


An iPad for R200? Looks too good to be true. You'd better believe it!




A friend pointed me towards a seemingly remarkable site called You may have heard of it. I know Twar wrote about Bidchaser recently ( Bidchaser - feels like legal gambling), which works on the same system. 

Before my eyes, I saw iPads, cameras, laptops - a geeky girl's harem - being auctioned off for pocket change.

I went to the "about us", I went to the "facts and fiction", I even went to the "contact us" page. It all looked legit. But it couldn't be. All the journalistic instinct I have been cultivating for the past five years screamed that there was something wrong. I just wasn't sure what.

I went to the privacy policy, I looked at the terms and conditions, they weren't selling user details.

And then somehow I ended up on the User Guide where it explained that each bid was worth R5, would put up the price by as little as R0.01 and extend the time by 10 seconds. 


So let's look at what this means. I want an iPod and it's R4 currently, so I bid which costs me R5. Alas! Someone else now has time to bid and does so. I bid again, and this puts my spend up to R10. Plus the R4.02. Plus the R200 shipping (yes, always look at the shipping costs when buying online!). Fine. I could stop. But oh, what's R20 for an iPod? I might as well keep going...

But say, after spending R50 or so, I give up. Good for me. I wasted money. It wasn't really gambling technically according to the law but still, I knew I might not win. No harm, no fowl.

Smokoo on the other hand is making a small fortune - much more than the cost of an iPod - because every time the price for the item goes up by 1c, they make R5.01.

RustyPrincess over on the myBroadband forums gives a breakdown of the bid for an iPad:

Off the website:
Current Price: R209.57(R104 785 made by smokoo)
Last bidder: Mojo88 Bid cost: 1.00 credits

Winner savings: Retail Price: R11,000.00 Current Price: -R209.57 2919 bids: -R14,595.00 This is the number of bids the winner bid - so he spent almost 15k on an Ipad, and then still has to pay R600 to ship it

Savings: R-3,804.57 Shipping Cost: R600.00

But wait, there's more

Here's where things really get interesting. Smokoo offers an "AutoBidder", so you can step away from the action to go to the loo or get some sleep. You can set the maximum and minimum you're able to bid, which is great. You won't end up spending R15k unless you give it permission...

But if you don't use the AutoBidder, you stand no chance of winning, as every time you bid, someone's AutoBidder will place a bid. And if you do use the AutoBidder? Two AutoBidders will keep at it until the one runs out of funds. And after you've spent R14 000 in R5s on something, don't you think you may just up that number of funds?

Technically not a scam

There's nothing happening on Smokoo that you are not told about or perfectly aware of. And technically it's not gambling (which is illigal in South Africa), it's bidding, isn't it? 

I can't say I wasn't tempted, as I saw the seconds counting down on that R4 iPod... but then guess what? The seconds reached 0 and someone bid! And then there was another 10 seconds...

And so it goes.

Once again, if something appears to be too good to be true, no doubt about it... it is.

Comments (56)Add Comment
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written by Dissol, September 18, 2010
Yes, I did the same double take as you did. There was 'something' wrong about the whole site. And, like you, I had a look at the terms & conditions, and realised that the 'price' shown had nothing much to do with how much the price had cost you. It is a clever con, and I am sure that some will have fallen for it...and still trying to work out how that R200 iPad cost them thousands of rand...if they were doing a lot of bidding.
written by Mzungu, September 18, 2010
Cool, I blogged about this very item too... was watching it closely
Smokoo Shop
written by Smokoo Shop, September 20, 2010
Smokoo Shop has brought a not-so-new concept of penny auctions to South Africa. We understand that we will have to take a few kicks on the shin from folks who haven’t done their research or understood how the system works or how the auctions run.

The concept of the penny auction is for the merchant (us) to be able to cover the cost of the items from the bids (credits) placed to win the auction and enable customers to win auctions securing items at well below retail price (cost of the bids included).

We are extremely disappointed that one “runaway” auction between a few of our customers has got so much attention, while the auctions that have closed and we have made a significant loss have not been highlighted at all.
Blackberry Torch – sold for R0.92 (R475 – R7999 = LOSS R7524)
Samsung Netbook – R0.88 (R440 - R3999 = LOSS R3559)
iPod Nano – R1.00 (R500 - R1899 = LOSS R1399)
Sony Camera NEX-5K – R1.94 (R970 - R8999 LOSS R8029)
From jus the four items listed above Smokoo has made a grand loss of R19,511.00.

What hasn’t been very well described in the “Example” above is that every registered customer has detailed information of how many credits they have used to bid on an auction and furthermore what the total cost (including shipping) to them will be. As an aside on the shipping costs we are constantly looking to better our relationships with couriers and ensure we are able to provide the service as cost-effectively as we can to our customers.

At registration all customers receive a welcome e-mail which directs them to the “How it Works” section as well as “A User Guide to Smokoo”. This is part of our effort to educate our customers on how the site works and assist them in establishing their own bidding and auction strategies.
We offer Live support as well as support by e-mail and telephone and are contactable almost 24/7!

We don’t appreciate being called Scum but can take a hit on the shin – oddly enough our only competitor in South Africa has received neutral and almost complimentary “review” by the same author as this post we are responding to. Hey – that’s free press for you!
written by Charmed, September 20, 2010
The aim of every business is to make money.

The fact that you made a grand loss of R19k means you're making money elsewhere to keep on running.
written by Dissol, September 20, 2010
This reply from Smokoo is really weak... As Charmed points out, cherry picking 4 examples to show that they made a loss on these only means that they are making far more on other items. The only reason for any business to be in business is to make money - we are all aware of that. Unless Smokoo have a much cheaper supplier of all these items, then they can only afford to sell them on at much the same price as any online retailer. So the end customers on average will have to cover that cost...or Smokoo goes under.

But Smokoo are being very 'clever' here. They are not telling the truth at all!! Think about it; even if these items were sold for much less than trade price - they don't actually just make the trade price, in fact I would suggest that their biggest earnings comes from the bidding process. Each of your bids costs you money whether you are successful in the auction or not. So they made their money from every single bid that was placed on these items...the end price is actually immaterial.

Let me give you an example: I will aution a R100 note. To bid on this, you must all register with Dissol Con Inc. Registering is free! Bargain hey? So I get (for easy maths) 20 people signing up. They purchase bids off me. Let's say that I will sell each bid for R5 (to keep maths easy).
The bidding starts:
OS bids R1 (so I get R5 for his bid)
Source comes back with R2 (so Dissol is up R10 now)
OS bids again R3 (good deal for a new R100 note - Dissol now has earned R15)
Charmed leaps in with a bid for R4 (but I have R20 already)
As soon as I have had 20 bids - I am even. But the 'price' is still only R20 - for a R100 note...
So the bidding continues...and finally OS places the winning bid...he has just bought my R100 for R50...what a bargain!!! Or is it?? I have made R500 well, OK, I have to give OS his money now - so only R400 Thank you!
And let's have a closer look at OS - he got his crisp R100 from my wallet...but he placed 20 bids to make sure he bought the the R100 cost him 20 x R5 = R100!!! But actually he is better off than the rest of the bidders, as each of their bids cost them, and they got nothing in return.

I smell a scam I am afraid...or will Smokoo reply with how much they really made from their example???? smilies/wink.gifsmilies/grin.gif
Smokoo Shop
written by Smokoo Shop, September 20, 2010
Folks - we have not "Cherry Picked" anything: We selected randomly four examples of where we have made a loss in response to Tally's example.

We don't hide how we make our money nor do we wish to. You have all seemed to have got the mathematics understood, perhaps that is because you have read the "User guide to Smokoo" where we explain exactly what you have.

What makes us different to some other online auction sites is that we do offer "Buy Now" auctions at which the customer is able to outright purchase the item on auction less the value of bids they have placed - at any time during the auction.

The long and short of it - there is no scam - but also Online Auctions are not for everyone.
written by Dissol, September 20, 2010
ooo...forgot something!!

After the auction, I could then come onto MyDL and complain that I have "made a loss" of R50 on the deal, but hey...I can take it on the shin (in fact you could take a sledgehammer to my shins if you wanted...nah nah!)

Hmmm...I see another auction I am going to sell kicking Dissol in the shins...Register with Dissol Con Inc, and you could get a jick for as little as 2c. Roll up roll up!!!

C'mon Smokoo let us see your real earnings...or is it just Smokoo and Mirrors???!! smilies/grin.gif

Tell you what; give me an iPad and I shall delete my comments.... smilies/kiss.gif
written by Dissol, September 20, 2010
oooo I am contactable "almost" 24/7 too!!! What a ridiculous thing to say?!
written by Dissol, September 20, 2010
oooo thought of something else!!! If the bidding is going too slow, then I just place a few bids myself, and either force the bidding up, or I "buy it back" for another day. How are Smokoo clients assured that this will not happen? Let's say the bidding I outlined above stopped at R4...then I just register myself...and buy it back for R5.

They cannot lose!!! Heads they win, tails you lose!
written by tally, September 20, 2010
Thanks for the response Smokoo. It's always nice to see companies getting back to customers.

Just a few things.
Firstly: if you see I referenced someone else's article which is critical of your competition for doing the same thing.
Secondly: I have never reviewed Bidchaser, you must be confused.
Third: I am merely stating my opinion, quite independent of whomever I may work for, of what I, a possible customer, found on your site.

If you have a problem with this image, perhaps you need to go to greater lengths to disprove the accusations others are making. No one is trying to attack you just because. What I posted here and what others have posted on the site are legitimate concerns. For example your autobid. Are you saying that my above described scenario of two autobidders competing against each other until one runs out of money is not possible? If I am mistaken I apologise and please explain.

Yes, I know it all comes down to the customer. So does Facebook's privacy policies. And we've all seen how that's gone down.

I have mentioned that you are not a scam. What you are doing is legal - both according to the new laws regarding Internet gambling, and according to laws against fraud. It's very clever. Yes, it's not your idea. It's still clever. And it still, in my very humble opinion which you are free to differ with, confuses people into spending much more than they intend.

Educated or not, you ignore (at least in your PR) the psychology of the user. The user knows that bidding again will cost him/her another R5... but once you've already spent R500... aren't you going to just keep going? As my good friend Kindred pointed out, it's almost like an addiction... and that's the trick. That's what makes your site work.

For what it's worth I'm sorry you have a PR nightmare to deal with. That's not nice for any new company, especially one which is technically legitimate. But you can't blame the consumer for "kicking you in the shins", just as you can't blame a Facebook user for being frightened Facebook will sell his or her details. It's not really about what you do or do not do... it's about what you *could* do. In this digital age of scams and phishers and fraud, people are nervous, they are scared. Perhaps you need to put something out on your main page acknowledging these fears and addressing them? Before any other potential users stumble across the site as I did and jump to conclusions based on what they find there.
written by Kindred, September 20, 2010
You know what is interesting, is the examples smokoo shop have given, yes they made a loss in all of those ... but lest looks at some others.

Iphone 4 16Gb = sold for R39.34 so R19670 in bids less cost R15000 = + R4670
another iphone 4 16GB = sold for R66.48 so R33240 in bids less cost R14500 = + R18740
another iphone 4 16GB = sold for R31.47 so R15735 in bids less cost R10000 = + R5735
BlackBerry 9800 Torch = sold for R23.16 so R11580 in bids less cost R7999 = + R3581
Ipod Touch 32GB = sold for R8.17 so R4085 in bids less cost R2989 = + R1096

My estimate is a profit of : R33822

Anyone can play the pick a product and show what is happening game .. but my items cover the cost of thier loss
written by Ebila Boy, September 20, 2010

Has anyone ever told you you're a bit of a tool? Cos for someone railing against windmills you're doing a really kak job at it.

Their terms and conditions are clearly stated. Would you prefer that they made a loss on every item the put out on bid? Do you also rail against Pick n Pay and your're local resturant because they make a profit on the things they sell?

Go troll somewhere else you muppet. You're posts are weak, and your logic is pathetic.

written by Dissol, September 20, 2010
Tally, I think you are being too polite. Your post is spot on. Their responses have been weak. While it may technically be legal, it is very misleading for many people. I did a straw poll in my office (huge personnel nightmare, but they did both give the same answer). They both thought that it looked like a good deal...until I explained the maths to them. Then they realised it was not such a good is misleading in its very nature (indeed, I think, but am not sure that penny auctions like this are banned in some countries). It is an old scam, or con trick. Simple and effective, and it is designed to sucker people in to spending more than they thought - OS has just gone home to boast to his wife about the bargain he just got. He bought a R100 note for R50... brilliant!! He is bidding to kick me in the shins tomorrow!!!
written by Dissol, September 20, 2010
I reckon I could make a case that this is in fact gambling, and not an online auction.
written by Ebila Boy, September 20, 2010

Not to really rail against you, but are you really saying that people have no personal responsibility?

Cos in your reply to Smokoo that seems to be what you're saying.

So basically no matter that the company provides all the information, and by the sounds of it directly points their users to how everyhting works, they're still responsible because their users cannot put one and one together themselves.

Being a bit hyperbolic here, but you seem to be suggesting that the company hold these people's hand every step of the way.

Also you're maths is a bit faulty. You say;

Winner savings: Retail Price: R11,000.00 Current Price: -R209.57 2919 bids: -R14,595.00 This is the number of bids the winner bid - so he spent almost 15k on an Ipad, and then still has to pay R600 to ship it

If only one person was bidding, they would have spend 15k on the product - you forgot that other people would have been bidding as well, so the person would have spent less than that. (and in some cases a hellava lot less depending on the amount of people bidding)
Smokoo Shop
written by Smokoo Shop, September 20, 2010
Thank you for your response Tally - we do appreciate the opportunity to assuage fears and concerns - especially in the 21st Century where it seems everyone is out to take the money from our pockets before we've earned it.

Responding to your question regarding the autobidder - the scenario is possible on an auction site with very few customers or that is still very new. From a customer point of view it wouldn't be very prudent to purchase huge amounts of credits and setup the auto bidder and consider the auctions won. The site and the auctions are interactive and require users to monitor what is going on.

As the Smokoo customer base increases, the likelihood of such an event occuring becomes smaller and smaller.

With regards to concerns about collusion or "auction fixing" we can assure you that we don't have the facility to create robots to bid on Smokoo's behalf, and in the interests of fairness all persons affilated to and employed by Smokoo directly, as well as their immediate families are prohibited from participated in the auctions.

We are currently in discussion with independent auditors to establish at least a monthly report which we will be able to publish to the Smokoo site whereby we are audited to ensure that auctions are run fairly with no interference or influence by Smokoo as well as the security of customer information stored on our servers.

We are open to constructive critisicm and ideas on how to improve our service to our customers - if we are missing something and it is pointed out - we are only to glad that we have been made aware of it and have an opportunity to rectify it.

Thank you for acknowledging that what we are doing is above-board: In response to fears and concerns we are doing our utmost to inform and educate our customers on how the site works.

As another user has already stated - we cannot hold every customer's hand every step of the way and as we mentioned in the close of our last post - online auctions are not necessarily for everyone.
written by Dissol, September 20, 2010
Ebila boy! I can only assume that you work for Smokoo??? As for trolling; I think not - I post regular comments here. If you can't stand a bit of criticism then I doubt you will last long. Please point out where my logic is pathetic??? Or are you just a troll yourself for Scamkoo, but afraid to admit it? smilies/tongue.gif
written by Ebila Boy, September 21, 2010

You're logic is pathetic cos you build up this ginormous strawman and then knock it down again.

You call it a con, when demostratably it is not so. You say "But Smokoo are being very 'clever' here. They are not telling the truth at all"
And then go on to say that they get their profit from the bidding process. Would you like to point out where they've lied and said that they get profit from elsewhere?

You also say that it's an old con or trick and that it's very misleading. Could you please explain exactly how it's misleading. Do they not explain and point out to their customers exactly how things work? Do you assume that people can not add up 5 + 5 + 5?

You seem to blame the company for people's stupidity and apparently don't seem to like the fact that they make a profit from people?
Do you also perhaps rail against Pick n Pay because they sell their bread at a loss because it means that people will buy their other products at the same time. It's called a loss leader, and attracts people to the more expensively priced items.

And I called you a troll for the simple reason that four of your posts tilted against windmills and really didn't argue anything of substance.
It's actually quite telling that on calling you out, your first response was to think I work for Smokoo. And while I know they're doing nothing illegal, I wouldn't take part in their auctions as A.) I have better things to spend my money on, and B.) Can recognise how they go about making their profits and the chances of me winning the auctions - something you appear to think the majority of people are incapable of doing.

Of course, nothing I say here will convince you I don't work for Smokoo, but considering you're apparent dislike for this company, could I not assume that you perhaps work for their competition?

See what a stupid argument that is Dissol?

Anyway - I'll check in later. Got some work to do and whatnot, and my fingers are tired from typing out that diatribe smilies/tongue.gif
written by Ebila Boy, September 21, 2010
Meh sorry boet. Caught me on one of those days were you dont feel like working and your bosses are pissing you off. Nothing personal against you. Just enjoy the argument. smilies/wink.gif
written by Noisy Cricket, September 21, 2010
Dudes, you are all getting hot and bothered for no reason.

Firstly, it is clear as day how they make their money, and if you can't pick up on that, then you are not paying attention. And yes, its a good model, they make good money, they have also made some losses, but in the long run, they will make their money, "The house always wins".

Secondly, yes this is an auction, but it feels more like gambling and a bit of a lottery, and so what if it does.

You buy a power ball ticket for R3.5, and might win or you might not, same as you bid for R5 and you might win, or you might not, you can also choose to spend R15K on lotto tickets the same as you spend on bids, or chips at the roulette or poker table.

Again, SO WHAT, they make their money, and most of the time you get a good deal, not every idiot will bid out R15K for a R11K product, and if he does, its his own fault for doing it, let him bump his head, you can't hold everyone by the hand in life.

And if you want to bid on a product, and you see all these auto bidders, then it's clear as day that you should rather step back and let them fight it out, if you are more conservative with your money.

There is no scam, its just a auction with the excitement of gambling and the chances of a lotto (much better chances though I think)

Who cares, go have fun, and just be smart about how you use your money, no need to go all Special Assignment on their asses just because most people are a little slow on the uptake as to how this works, that is why your parents told you to pay attention in school, otherwise if you grow up to be an idiot people will take you for all you have, and you have no one to blame but yourself for that.

Low cost high volume transactions is how many businesses make money, you are just miffed that you didn't think of it first, hell when I saw this the first time I wanted to kick myself, because it was so simple.

Just relax, life will go on, the universe will still be here tomorrow, Smokoo is just another business trying to make some money in a creative way.

I like it.
written by Twar, September 21, 2010
I only read the first few responses, and I'm afraid im with Smokoo on this one.

A lot of you claim that the users are fooled into thinking they spend less? Quite frankly, if you are going to bid on an online site, you better do your research thoroughly. If you don't its your own fault.

Secondly, they have a Buy Now option, and after every bid you place the price of the bid is subtracted from that price. This is the one part of the site that makes it very legitimate. If you really want to buy an item, lets say an iPod, then doing it through a site like smokoo or bidchaser GUARANTEES that you will get it for either the retail price, or cheaper. (that is assuming they subtract the whole bid amount from the price, and not just half of it like bidchaser does.) Either way, chances are that you will probably win the bid if you are willing to spend the entire retail price in bids on an item, which means that you will most probably get it for much cheaper.

Of course, the site makes a lot of money out of all this. And a lot of people lose.
Firstly, they aren't hiding the fact that they make a lot of money. Its a clever idea, and I think they deserve it. They also lose money in some cases, but obviously the winnings are more, otherwise they would be out of business.

Now the reason they make a lot of money is because a lot of people lose on these biddings. And the reason for that is that there are a lot of people out there just trying their luck, trying to get an item for MUCH cheaper than the retail price. If you lose money this way, it probably wont be all that much, and the website is certainly not to blame. If you REALLY want the item youre bidding on, take the retail price of it - convert it into bids, and start bidding. As you bid the retail price will go down with every bid you make, and if you happen to spend the entire retail price on bids on the item, well then just use the handy 'buy now' option and get it for no extra cost. I seriously doubt that you would lose if youre willing to pay the real retail price though.

At them moment I am using bidchaser to be one of those lucky few to win things for far under retail price. This is because I am just a student, and don't have the kind of money to buy the entire thing. Its all about luck to me at the moment. Now so far in total (including delivery fees etc) I have spent exactly R 566 on bidchaser. And in return I got a GPS worth about R 2850. And I still have 152 bids left. Thats R 760 in bids. So it can work out pretty nicely if youre lucky.

Once I get a job and I actually need/want to buy some of those items, I will surely rather bid on it through bidchaser or smokoo to get it for retail price or less in the end.
written by Dissol, September 21, 2010
@ Ebila Boy, Noisy Cricket or whoever. Of course I am only guessing you have a connection to Smooko. I could be wrong (but doubt it). Let's use some of my pathetic logic here. You (as far as my knowledge) have never posted on MyDL before, and yet you decide to use your very first comment on this site to aggressively protect a company from fair (if stiff) criticism. I smell a rat.

The reason why I say that it is a con, is for exactly the reasons I have explained. Their (or perhaps, your) marketing pushes the idea of an auction where you can purchase items for much less than their retail prices. You do warn people (in the small print) that every single one of their bids costs them R5 - which is unusual, to say the least. Most (all?) other auctions, bidding is free, so people will tend to forget that they are spending money by bidding... You even encourage people to spend more "The idea is to appear as if you have bids to spare and are determined to win". Why not put PAY-TO-BID in big capital letters across your site?

I am railing against windmills, because this is a slick con trick, and will be separating fools from their money. I do rail against any company that targets the people who are a "little slow on the uptake" as yours does in your admission. The reason I do, is not because I am a muppet or a troll, but that I meet these people all the time, people who have been conned out of money that they have worked hard to earn. I am not just miffed that I didn't think of the idea first. There are a multitude of ways to hustle, if that is how I wanted to earn my money. I like to be able to sleep at night. Clearly you do not have the same qualms...

But don't be too upset. I have railed against religions, the pope, homeopaths, fraudulent policemen, even the justice system in Saudi Arabia... I am not just picking on you!!! Shame...were you a little upset, thinking you were the only ones.

My work means I do deal with people who have not had a decent education, or people who have intellectual impairments (these presumably are the fools, that you mention in your comments. And it sickens me when I learn of the latest way that they have been ripped off. Many have very little spare cash...and they will see something like this as a place where they might be able to score a bargain...without realising that they could spend a fortune, without purchasing a thing.

But thankfully this is a free country. So you can call me a muppet (which is quite nice, as the muppet show is entertaining), a tool (which I also view as a compliment, as tools are useful). Calling me a troll, is really quite amusing, as I comment here regularly, although your comments have only ever appeared to defend I wonder which one of us the hat fits??? But because it is a free country I am also able to highlight the way this company operates, and to post my own opinions about the way you (or they??) operate. I really hope that the few posts here, including your own comments will have turned potential customers away from your site. So keep trolling...

I dislike it...
written by Ebila Boy, September 22, 2010
Remember how I said you assuming I worked for Smooko was a stupid argument Dissol?

It still is.

And so is calling what Smooko does a 'con-trick'

It isn't - which basicallly means the rest of your argument falls flat.

Still it's an impressive strawman you built up there. Must have been fun making up an argument against them and then tearing it down.

Pity your strawman isn't even that good.

And is it nice when people are conned out of money?
No it isn't. But when the reason you're conned out of you money is because of simple greed, then pardon me for not feeling oodles of pity for them.

Plus you know, there's that problem with that whole pesky personal responsibility thing.

You sign up for things and don't bother to find out what it entails, then sorry. That's your problem.

And you know people who don't have a decent education aren't stupid as you seem to imply. I've met a lot of smart people who know their shit, even if they only have a std 3. And those with intellectual impairments should have people helping them make their decisions.

Ag Dissol, Its not like I have a stake in this race, I happenend to stumble upon this blog in the course of working, read it, and the comments and just thought the argument was a stupid one. I was bored, and theought I'd get my argument on.

Thanks for playing boet

written by Dissol, September 22, 2010
Ebila Boy; this is so easy - you are low-hanging fruit here!

Let's follow your logic, shall we?

I suggested that you were connected to Smokoo. I still think you are. We only have your word that you are not. It means nothing, it carries the same weight as my own comment. But it is still very fishy, that you just happened across this blog, after never, ever having posted here before, to my knowledge. You don't seem to comment on any other posts...just the one exposing Smokoo... You see how this would lead anyone to the logical assumption that you are connected. If you are not connected, then why even waste time defending a company that you have no interest in?

You suggest that Smokoo are not running a con-trick, whereas I say the opposite. Hmmm...again, one comment against the other. Same weight. The difference is, I pointed out how Smokoo are playing the scam. You call this a strawman argument. Please show us where the strawman is?? I gave an example of how I would 'sell' R100 and make R400. OS walked away from my own auction thinking he bought R100 for R50. Have I got the auction process wrong?? My auction was much more generous than yours...oops...Smokoo's, as R5 of real money would buy you R1 in the auction. You...oops...Smokoo only give you a cent for each R5.

I call it a con, as you push it as an auction. But you hide the pay-per-bid aspect. Looking at other comments about your...oops...Smokoo's operation, the clever people see the con, but an awful lot of people think that they will 'beat the system' by placing late bids...they do not realise immediately that they also extend the time, and that you have software available that will keep pushing the price and time up. I wonder how many long term customers you...oops Smokoo will have? I suspect that people join...lose some money on a few runs, and then realise what a scam it is, and leave, after giving you...oops Smokoo chunks of money.

I don't have oodles of pity either for people that are motivated by greed, and sure, most of the people that lose money on your site are motivated by that - greed. Which is exactly what Smokoo are motivated by too; greed. There are scams, and con tricks that are legal. Smokoo is one of those.

You arrive, out of the blue, to defend a greedy company. Complaining that people are using strawman arguments, and then you follow that with an ad hominem attack!!! You are not a tool at all - tools are useful! You are not a muppet - muppets are entertaining. As for the trolling. Read my post, and make your own mind up!! smilies/grin.gif smilies/tongue.gif
written by Ebila Boy, September 22, 2010
Geez Dissol beat dead horses much?

First things first - I'm not so much defending Smooko as much as pointing out what a terrible argument you have.

Do you have any idea what a strawman argument actually is? Because it doesn't seem like it. So let me spell it out for you. In calling what smooko is doing a con, and a scam you're creating an argument that has no basis is facts.

Let's see what Wikipedia has to say about it (not the best place to source things admittedly, but it'll do for this argument.)- A strawman is "when someone creates the illusion of having refuted a proposition by substituting a superficially similar, yet unequivalent proposition (the "straw man"), and refuting it, without ever having actually refuted the original position.

Get that?

Cos here's what you're doing. You're arguing a position that isn't there. You call it a con, and a scam, and seem to reckon its gambling (something which i don't really agree nor disagree with - but it's close enough to gambling that i wont really argue the point)

The only problem is you don't provide any reason for your claims other than some superficial - they don't provide the information in big enough letters for me!

In no way do they keep any sort of information away from their clients about any fees that their clients have to pay.

So, if they're providing their clients with the information they need, and not hiding anything away from them. Exactly how are they deceiving them? Where is the con when you've been told exactly how everything works? Where are the lies Dissol? Where is the sleight of hand, where the card with the ace of spades on it has disappeared up the scammers sleave?

If i can use a rather bad example. What you're doing is looking at a company and seeing that people are buying products/using services from that company. Perhaps the company is making a large profit. Perhaps not. Now you don't seem to like what the company is doing. For what ever reason. Now instead of saying 'I don't like what that company's doing' and leaving it at that, you say 'it's all a con', and then attack that company along those lines.

Now even after pointing out that your argument there is bad, you may continue to believe it's all a con. Despite the fact that you haven't provided any sort of basis in fact for what you say.

Hey, that's your prerogative. Cognitive dissonance is a wonderful thing.

Still doesn't mean you have a good argument I'm afraid.

written by Ebila Boy, September 22, 2010
Ah, yes sorry - the ad hominem attacks. My apologies on that - I just find I get peoples attention a little bit faster and that they tend tohave more of a horse in the race (so to speak) when I attack them personally. S my apologies for that. Well on the muppet attack anyway.

I didn't actually call you a tool. Merely asked if anyone ever had called you one. It's an import distinction.

I maintain the troll term though. Five posts tilting against windmills will give a person the impression that you're trolling the topic.

Maybe that's just me though. smilies/tongue.gif
written by Dissol, September 22, 2010
Oh, you are precious!!! Brilliant!! You are going to spell out what a strawman argument is... Err... please point out where my example (your strawman) of the R100 note auction, that I have differed from the model that Smokoo uses?? I know that I have been more generous than they are...but hey that is just me. Where is that example different from any Pay-per-bid? I call is a con, you say it isn't, so we have to agree to differ there. I admit there is a fuzzy line between a sharp business practice, and a con. You may think they are one side of the line, and I think they belong in the other. That is not a strawman. Or is that too difficult for you to grasp. The sleight of hand is telling people that the product was sold for R0.92. It wasn't. Much more money than that was paid over to Smokoo than nearly R500 in fact! It is just a sleight of hand, and most people seem to fall for it. Most people think...Aha! I will wait until the time is almost up and then pick up a bargain, as you have pointed out, most people are motivated by greed. It would be a little more honest if R5 bought you a R5 bid. And if a running total of the number of bids was placed there. So people could easily see how much they are spending.

Maintain any terms you want about me; I could not care less what you think of me!!! But in terms of trolling, if you looked about the MyDL website, then I do comment on a lot of you...on just this one. So while all your comments on MyDL, ever, have been in defence of a con trick, I have commented on other issues, and made posts too. Thousands of them on MyDL. You also make no sense whatsoever in your comments. You admit that you like to attack people personally, as you have admitted here, as it "gets their attention a little faster", and at the same time, you are surprised, and offended that I come back to comment!!!!

My logic is pathetic according to you, which is fine, everyone is entitled to an opinion. But let's have a look at your logic shall we?? So a person that posts thousands of comments on hundreds of posts on a site can be called a troll, by a visitor on their first visit??? And you can call people names to get their attention, but are then upset that they comment back????

I really, really do not need to call you names. Your own words paint the picture!! Priceless... smilies/cheesy.gifsmilies/cheesy.gif

Twar, I do hope you are enjoying this!!!
written by Twar, September 22, 2010
Dissol, what I think you are missing, and that is definitely missing from your R 100 model, is the fact that everyone had the chance to buy your R 100 cash for R 100. And that after every bid of R 5 the price cash buy price came down with R 5.

The difference between this site and true gambling is the following. When you bid on one of these sites you have a guarantee to be successful if you are willing to pay the full price. With gambling you can lose an infinite amount of money without winning anything.

Like I said in my article about bidchaser is that it definitely feels like gambling, and that under certain circumstances it is. But the fact that you can buy any item at retail price or less guaranteed is what in my mind ensures that the site is not a scam. I'm pretty sure it wouldn't be legal if that option wasn't there, as then it would be gambling for sure.
written by Dissol, September 22, 2010
Twar, yes, I take your point. But I maintain that few people would exercise that option (as you may as well purchase the same from any high street shop, and so avoid the expensive shipping costs). But there is a sleight of hand going on. In my example, OS may have thought that he got a bargain by purchasing R100 for R50 (even though he actually didn't). Most people fall for the trap when you first show them this site. As most humans are motivated by greed, they see a potential bargain. Few stop to do the maths (like you did) beforehand, and realise, that quite unlike any other auction site they will be charged R5 for each and every bid. I have no doubt that this is where they make the bulk of their money. A 'good' con attracts unsuspecting, guillible people in by making something out to be a really attractive deal. An iPod Nano for R1 seems like a good deal. But it did not cost R1. If the true cost is the amount of money that the seller takes for a product (which is a fair way of working out the price), then that R1 Nano actually costs R500...that is how much money the seller took before selling it. Nobody bought that nano for R1. But after a very short while (but potentially a fair amount of money), the users will understand the scam, and leave.

So my prediction is that they are a fly by night, and will not last a year. They may take huge amounts of money in that year...but it is still a con. There are many, many legal cons going on every day. Make a quick buck and move on. In previous times they had to make do with a trestle table outside a railway station, but the internet opens up a whole new market to these people.
written by AbortRetryFail, September 23, 2010
Had a look at the site myself and the delivery costs seem excessive too. I bought an android-based Ipad ripoff from China and got it couriered to my door in under 3 days for R150, THEY have a R600 delivery charge for something that's identical in size, shape and weight...

an Iphone delivered at R250? the darn thing fits into a POCKET! Do they really need to hire an abnormal load 18wheeler or maybe a 747 to courier it to your door?
written by Ebila Boy, September 23, 2010
Oh, you are precious!!! Brilliant!! You are going to spell out what a strawman argument is... Err... please point out where my example (your strawman) of the R100 note auction, that I have differed from the model that Smokoo uses??

That wasn’t your strawman. But you knew that already didn’t you?

I know that I have been more generous than they are...but hey that is just me. Where is that example different from any Pay-per-bid? I call is a con, you say it isn't, so we have to agree to differ there. I admit there is a fuzzy line between a sharp business practice, and a con.

There is? Is the fuzzy line that one is a legal practice, and the other is fraud?

Yup – that’s pretty a pretty fuzzy line– but only because I have to squint to see how you can equate the two.

You are aware that words have meanings right? Let’s check out the definitions of those words you seem to like using so much.

Scam: A confidence game or other fraudulent scheme, esp. for making a quick profit; swindle
Con: To swindle; trick: That crook conned me out of all my savings. To persuade by deception,

Hell – let’s just check out swindle as well, since it appears in both those definitions

Swindle: To cheat (a person, business, etc.) out of money or other assets. To obtain by fraud or deceit.

Now again Dissol, where is the fraud? The deceit? Is the information not there? It’s not in big flashy letters as you seem to want – flashing on and off in big, bright shiny lights.


Rather it’s in the third paragraph right after you’ve clicked on the page marked HELP. (Which I’m sure you’ll be pleased to find out is in pretty big letters smilies/tongue.gif)

Those devious bastards.

You may think they are one side of the line, and I think they belong in the other. That is not a strawman. Or is that too difficult for you to grasp. The sleight of hand is telling people that the product was sold for R0.92. It wasn't.

Yes it was. You’re just not happy that to place each bid costs people money.

Much more money than that was paid over to Smokoo than nearly R500 in fact! It is just a sleight of hand, and most people seem to fall for it. Most people think...Aha! I will wait until the time is almost up and then pick up a bargain, as you have pointed out, most people are motivated by greed. It would be a little more honest if R5 bought you a R5 bid. And if a running total of the number of bids was placed there. So people could easily see how much they are spending.

You are aware that people buy packages right? Like they put R100 down, and then make x amount of bids that cost them R5 each? Hell, even a kid in grade two can minus 5 from 100 a couple of times and get an answer.

Maintain any terms you want about me; I could not care less what you think of me!!! But in terms of trolling, if you looked about the MyDL website, then I do comment on a lot of you...on just this one. So while all your comments on MyDL, ever, have been in defence of a con trick, I have commented on other issues, and made posts too. Thousands of them on MyDL.

Your mom must be so proud.

Also, you know people have to start commenting somewhere. I’m sure you have a first post somewhere in your past. Mine just happened to be on this topic.

You also make no sense whatsoever in your comments. You admit that you like to attack people personally, as you have admitted here, as it "gets their attention a little faster", and at the same time, you are surprised, and offended that I come back to comment!!!!

Erm... Where did I do that? Care to quote me?

My logic is pathetic according to you, which is fine, everyone is entitled to an opinion. But let's have a look at your logic shall we??

So a person that posts thousands of comments on hundreds of posts on a site can be called a troll, by a visitor on their first visit???

Yes – and the amount of posts you’ve done has nothing to do with your trolling this thread. I already explained why you’re a troll.

And you can call people names to get their attention, but are then upset that they comment back????

You’re delusional.

I really, really do not need to call you names. Your own words paint the picture!! Priceless...

Twar, I do hope you are enjoying this!!!

(i'm not sure when or if you'll reply to this, but I'll check in throughout the course of the day. Otherwise will reply on Monday if I don't get the opportunity today. Regardless, have a cool long weekend)
written by Ebila Boy, September 23, 2010
Damn, wish you could edit posts on this thing. Just to make myself clear. In one of my retorts I ask you to quote me on where I did something. Don't be sneaky now and quote me on just the one thing (I'm well aware I said I attack people to get their attention) Rather I'm looking for the quote where I'm surprised and offended at your replies to me.

Good hunting.
written by Dissol, September 23, 2010
Very odd person. If you do not have a connection to Smokoo then you are even sadder!!!

Smokoo is a con, and a scam. It fits the definitions you give. You seem to assume that all scams are illegal (even though in your definitions there is no mention of illegality.

If I try to sell product A, and I receive x amount of money for product A, then product A can be said to cost x (can you follow that logic???).

I have no doubt that it will soon disappear (as maybe you will, to try to defend the Smokoo scam on other blogs who are also commenting negatively on it!).

Don't worry about replying, I have no further interest...I shall be commenting on the next scam, and will not be re-visiting here; I have no doubt that anyone reading your diatribe can make their own minds up now.
written by John T Smith, September 23, 2010
It seems people are getting a little confused as to why exactly Smokoo is scum.

The crux of the matter is that a penny auction (the class of site Smokoo fits under) is not really an auction at all. It conforms to all legal definitions of what an auction is, yet the R5 bids turn it into little more than a lottery.

Yes, you may bid at exactly the right time and win an iPhone for R200 + R5 + shipping

But wait, theres a random chance someone will bid on top of your bid and you essentially lose that R5. Smokoo can get away with calling it an auction because they claim its not a random chance since a machine didn't generate the number, but rather the events occur due to human actions.

Its still random in my books, and to me Smokoo should fit under the Lottery classification, and in which case it would be illegal in South Africa. Unfortunately they can legally call themselves an auction, which is bullshit.
written by ShackledMuse, September 24, 2010
Okay, the fact that this blog had 30 plus comments, proved that there was an argument coming if I scrolled down. I visited the site before I read the comments (or the debate, if you will.)

My opinion: It's a scam. For all the reasons covered by Tally and Dissol.
written by barrmar, September 25, 2010
I have never heard of an auction where you pay to bid. It is normally a case of the highest bid wins!
This reminds me of the MTN "competition" at R7.50 to answer each question. It took R50000 to win, and the person that spent R49992.50 lost everything as did everyone else that pulled out earlier. (Not sure of the exact amounts involved, but it was in that region). That one was eventually ruled to be an illegal lottery.
I guess the same will happen here - eventually!
written by Twar, September 27, 2010
I hate to have to reiterate this over and over, but it seems no one takes note of the fact that you can at any time buy any product cash, and that the amount you have bid on it already is subtracted from the cash price.

If it weren't for that fact it would be gambling and therefore illegal in south africa.
written by Swift, October 01, 2010
I think it is a business and it gives the opportunity to make a big score as well as losing some. You go in understanding all the risks, the money Smokoo makes is irrelevant. They are in business and as was said earlier "where they make a loss they must gain somewhere else" so their profit can't be all that high and if it is, so what? If I win an iPad for a nickle I won't complain. The opportunity is there, take it leave it.
written by Dissol, October 01, 2010
Swift, well...the problem with their model is that it suckers people in before they properly understand the process. The other major issue, is that it would be VERY easy to "rig" the bidding to ensure that they have no chance of losing. I am not suggesting that they do that, but many auctioneers use the con trick of taking bids off the wall, to try to push the price higher, and bidders may find that they are bidding against themselves. But normally, by doing this trick the autioneer runs the risk of not selling, and therefore not taking any money. However on Smokoo, they would make money by doing this. I would reiterate, that I am not accusing Smokoo of doing this, but there would be no way of ensuring that they are not.
written by Mozzie, October 02, 2010
Twar you are mistaken about the buy option. Not every item on Smokoo can be bought, in fact very few items have what they call the "Buy Now" option.
written by Twar, October 03, 2010
Ah, youre right. I assumed it works the same as bidchaser, where every item does have a buy now option. Just looked on smokoo now and saw they dont have that for every item though.
written by Dissol, October 03, 2010
Twar, I don't think it is surprising that people are confused how the site works... I think it is purposefully set up like that.
written by SDW, October 05, 2010
Penny Auction Sites – Breaking through the Smoke and Mirrors

As a penny auction site frequenter and bargain hunter myself, I couldn’t help but pick up on the threads on the MyDL forums regarding the only two operators in South Africa: I noted that the forum threads have focused on the penny auction business model which is the same the world over. Let’s assume that you are interested in participating in a penny auction and have no problems with the business model I have decided to share, from my own personal experience some tips and advice on how to identify rogue operations.

After having spent many years in the United Kingdom, where the penny-auction industry is well established, I thought it may be useful to post some basic checks and investigations that any basic computer/ Internet user can carry out before signing up and purchasing from the sites.

Through my research and investigation into the legitimacy of the UK and US penny-auction sites I have discovered (International with local sites in many countries) and (also international but with a stronger UK market presence) which are, in my personal opinion, totally legitimate and honest operators. Let us compare the two top international operators to the two sites MyDL forum threads cover: and

One very important indicator that you can look at is a web analytics tool that will give you a summary of the amount of Internet traffic/ site visits the operator has had over an historical time period: allows any Internet user to review this information free of charge. What you need to look for to identify a ROGUE operator is a constant and almost unchanging level of traffic or number of site visits. All legitimate business sites will show a fluctuation in the volume of traffic which would look like the “loop the loop” rollercoaster. A business that has a “Flatliner” traffic result would show that all traffic is constant and hugely suspect. Compare the International operations MadBid and Swoopo to Smokoo and BidChaser and see the results for yourselves! (go to and enter the site address in the search bar – the page will refresh and provide you a link to “Get Detail” clicking on this link will refresh the screen and provide more detail in a graph for the site you have searched for. You can also then compare the sites by adding the other site URL’s into the text boxes below the graph – the specific report I look at is Daily Reach.)

What you will also notice is that there is a strong correlation with the popular auctions on the legitimate sites showing a significant increase when popular items are on auction. You will clearly see that rogue operators have an almost constant reach and there are no peaks or troughs in their site activity and traffic.

For interest sake – compare and - interesting correlation with the peaks and troughs! Well done MyDL for a sneaky way of boosting your own site traffic!

written by SDW, October 05, 2010
A second very important check that the site operators have a means through which you can contact them: Whether it be e-mail, chat or voice line – check to see if there is anyone to answer your query. If no contact information is provided it is VERY LIKELY they are a ROGUE operator and patronage of their site should be avoided altogether. has three primary contact mechanisms, specifically a share-call voice support, LivePerson Interactive Chat as well as several advertised e-mail addresses. has a “contact us” form with no address and no telephone or interactive chat support.

Check on the forums and search engine results for:

Complaints or Compliments and make sure that the site operators have responded to at least one of the complaints and threads on the forums. If they are silent and no response provided by them, the chances are very likely you won’t hear from them if you have any problems to resolve.

Checking on forums will give you a range of opinions about the site and legitimate operations would be actively involved in these discussions. You would also be able to confirm whether or not customers of those sites have indeed won anything AND received the goods they have paid for.

Customer testimonials are always a good indicator and will assist you in assessing the legitimacy of the business. What is very interesting is that I’ve not been able to find any complaints or compliments about the shipping/ delivery of goods from BidChaser even on their Facebook Page. What is noticeable about this is the fact that BidChaser has many more items of significantly higher value than Smokoo advertised as ended auctions and begs the question – who is actually receiving these items if anyone at all! has been mentioned in several threads across several different forums and has responded at least once to each of the threads. I have only been able to find two threads relating to BidChaser and not a single response from them to the threads. What is interesting to note about the forum posts about is that the majority of comments are not related to their legitimacy but rather an attack of the self-same business model employed by all other penny-auction sites – Swoopo and Madbid included!

Check on customer service portals such as Hello Peter to verify if the portal has received any complaints against the operator and whether or not they have responded to the complaint(s).

Legit business may even pro-actively register their businesses on portals like Hello Peter to add to their credibility and indicate their commitment to providing an excellent service.

Some of the dead-giveaways about a rogue operation would be to look at the auctions they are running : South Africa has made great strides in Internet Technology and connectivity, but is still a long way from the levels in “Developed Countries”. What does this mean? Well in a nutshell, when you see a countdown timer seamlessly counting down without a hiccup, something fishy is going on.

To elaborate – when a customer places a bid – the server request originates from outside of the auction operators server and will be affected by network lag, congestion and latency which would be seen as a slight delay in the clock refreshing after a bid has been placed. Rogue sites use “Shill Bidders” or “Bots” to place bids from the server. When these types of bids are placed and originate from the server there is absolutely no evidence of any lag, latency or delay in the countdown and price being updated.

I have given you some tools to help you make up your own mind, some good advices, take it or leave it.
written by Mozzie, October 07, 2010
Since Smokoo seems to respond on this forum, perhaps they can answer something that is puzzling me. I am a Smokoo bidder and on 2 occasions I have seeen auctions stop under strange circumstances. 05/10, in the evening there were 2 auctions running at the same time, the one for Mobile Internet and the other for a Samsung laptop, there were a lot of people bidding on both auctions, and all of a sudden the timer dropped to 0 and the auctions were both finished at exactly the same time. 06/10 Samsung Netbook, again a lot of people were bidding on this auction, in fact there were 4 autobidders, the same story again, timer all of a sudden drops to 0 and the last name on the auction list is the winner. With regards to the last auction i find it highly unlikely that 3 out of 4 autobidders either ran out of bids or stopped their autobidders all at the same time. Even if that was the case, having watched the auction for most of the afternoon, there were quite a number of single bidders that bid inbetween the autobidders. Any feedback would be appreciated.
Smokoo Shop
written by Smokoo Shop, October 07, 2010
Smokoo Shop would like to thank all participants in this thread for the heated debate. This will be the last post that Smokoo makes on MyDigitalLife for a number of reasons, some of which we will list below:

It has become undeniably evident that MyDigitalLife has been benefiting greatly from the traffic generated to their site through this discussion and consequently their own site rankings and Google indexing sky rocketing during the debate.

There are many unfounded allegations made against Smokoo without any solid research being done into the brand and its operation. Journalistic ethics – the responsibility to give a balanced argument that will allow readers to come to their own conclusion - has also been brought into question since we have had no response after repeated attempts to contact the author of this original thread to conduct a full interview with us at our offices. Even after having visited the MyDL team at their offices in Rivonia we have had no confirmation or commitment to conduct an interview.

Without spurring a further heated debate, we believe that there have been sufficient posts from various MyDL users and Smokoo customers to enable readers of this thread to come to their own conclusion.

@ Mozzie – we have the answers to the questions you have in your post, should you or anyone else be interested in the response, please post the question on the iAfrica Smokoo thread and we will gladly provide you with the requested information and explanation.

Customers of Smokoo are able to contact us through various media and we respond to all enquiries we receive – if you need an answer to a question you may have, feel free to contact us directly or post on the iAfrica Smokoo threads.
written by Mozzie, October 07, 2010
I have reposted the question as requested. For the record I would like to state that in no way was I insinuating that Smokoo is scum or a scam. I have personally won on the site and received my prizes. Its personal choice really, if you want to bid then you have to be responsible about it and also realise that you can't always win.
written by Bidbananasblog, October 08, 2010
Nice information, valuable and excellent, as share good stuff with good ideas and concepts, lots of great information and inspiration, both of which we all need, thanks for all the enthusiasm to offer such helpful information here. A penny auction scam is a make new category of method to auction. If you like getting brand new items and receiving incredible deals on them than a penny auction possibly barking right up your passage. When command in a penny auction the bids cost a little bit of money.
written by Twar, October 08, 2010
I think bidbananas guy needs some english lessons.
written by Malanie, October 11, 2010
Check out current bidding on a mac notebook, 4 guys have been at it for over an HOUR AND A HALF at R5 rand a shot for a R10 900 item ..hellooooooooo wake up people, this is scam deluxe!!
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