Study Finds That eBay Shoppers Often Over Pay

Length of auction is key to getting a bargain

From Canada.com , via the Canwest News Service, comes word of new research that found that eBay customers often over pay for their purchases:

Shoppers looking for last-minute Christmas deals should avoid eBay unless they can keep their emotions in check, new research on the shopping value of online auctions suggests.

Despite their intention to scope out good deals, a survey of over 900 online auction shoppers found that the longer an auction runs, the more likely people overpay for an item.

"Auction participants have a feeling of attachment to auction items when bidding duration gets long. This attachment intensifies the desire to win the auction, which leads to overbidding and overpaying of the auction items," according to the study, published in the upcoming edition of the Journal of Retailing and Consumer Services.

eBay, the largest online auction site, boasts 84 million active users worldwide. Last year, the total value of sold items was nearly $74 billion.

Canada is in on the action in a big way, eBay Canada reported in its 2008 census.

Last year, Canadians spent more than $45,000 a day on outerwear. Throughout the year, we bought and sold more than $7 million worth of NHL rookie cards. Parents and kids coughed up more than $500,000 for Webkinz and $600,000 for Barbie dolls.

These online auction shoppers aren't always getting a deal, said lead author Min-Ying Lee of the University of Kentucky.

"Many auction shoppers do not recognize their compulsive behaviour or attachment to auctions. Rather, they believe that they are very rational and economic shoppers because they do their best to save their money. But in reality, it is hard to say that they really save money. Usually they spend far more than they expected," she said in an interview.

The findings showed that utilitarian and hedonic value equally influenced preferences toward online auctions, which contradicts the conclusion of an earlier study that found utilitarian value was a far stronger predictor than hedonic value.

A shopping trip has hedonic value if it is a joy or feels like an escape, when compared to a useful trip.

The "competitive nature of auction increases excitement and arousal in shopping, which is different from online shopping with a fixed price. Because searching and bidding processes create attachment to a selected item, hedonic value plays a role as much as utilitarian value does in online auctions," the study found.

Avid eBay buyer Randy Demoe of Emeryville, near Windsor, Ont., has all but abandoned traditional retail shopping in favour of the online auction house. With 10 years of experience under his belt, he's learned to avoid overpaying for items.

He said he doesn't get swept up in the emotion of any auction, and always calculates shipping surcharges and taxes before making a purchase.

"It's a lesson learned. You end up spending too much money buying something through eBay. You realize what went wrong and then you try and avoid those," said Demoe, who over the years, has made large purchases on eBay, including a classic car and an eight-metre travel trailer.