Penny auctions aren't scams, but they can make the unsuccessful bidder feel like they have been scammed. The majority of people who use it don't understand what they are even doing. You pay for each bid regardless if you win or lose. So, an ipad might sell to the successful bidder for about 70-130 bucks, but there might also be 20 other people bidding that much for it. With each person bidding that much, and having to pay for each bid a certain amount, which is a set $ per bid, you can imagine the huge profits the companies make. Scam? No. Huge profits? YES! Will costumers come back? NOPE! That's why you see these companies coming and going like flies!