Swoopo just might be an evil eBay

If you know what’s good for your pocketbook, you will not ever go shopping at Swoopo. It bills itself as “entertainment shopping” so that should be your first warning.

Your second should be the fact that, even though it looks like an auction site akin to eBay, there is a significant difference — you have to pay to play.

That’s right, on the Canadian version, each bid costs you 65 cents. (It’s a slightly different amount in different countries, but the idea is the same). So, the deals look great — I’m looking at a $1,900 laptop that’s going for less than $50 right now — but every time you want to make a bid, it costs you that 65 cents.

Also, depending on the auction, each bid only raises the price by a penny or two. So that laptop looks pretty enticing at $50, but if you click “bid” then it’s just going to go up to $50.02″ — and it’ll look pretty enticing to everyone else out there, too.

Also, each bid adds to time to the auction, so you can, uh, swoop in at the last minute and steal an auction. Nope, you have to bid and bid — at 65 cents each click — until everyone else decides that they’ve sunk too much money into it.

But here’s the insidious part: make 15 or 20 bids on an item, and suddenly you’ve got real money invested in it. And if you don’t win the auction, you’re still out the money — money that you don’t get back.

An article on Slate-associated The Big Money likens it to crack cocaine, and does a pretty good job of explaining it:

Consider the MacBook Pro that Swoopo sold on Sunday for that $35.86. Swoopo lists its suggested retail price at $1,799; judging by the specs, you can actually get a similar one online from Apple for $1,349, but let’s not quibble. Either way, it’s a heck of a discount. But now look at what the bidding fee does. For each “bid” the price of the computer goes up by a penny and Swoopo collects 60 cents. To get up to $35.86, it takes, yes, an incredible 3,585 bids, for each of which Swoopo gets its fee. That means that before selling this computer, Swoopo took in $2,151 in bidding fees. Yikes.

Something tells me I’m on the wrong side of the equation here.