RackUp is a startup that says it can bring the excitement of live shopping (think of the crowds outside a store before a big sale) into the online world.
The company just demonstrated its system at the TechCrunch50 conference in San Francisco. There are other startups focusing on fast online auctions, such as Swoopo, but RackUp is focused on selling gift cards to shoppers for their favorite stores. Basically, you bid to buy a gift card from RackUp, then RackUp adds a bonus based on the size of the bid and how early you bid in the process. So you might pay $50 and get a $70 gift card.
Not everyone gets a card, though. The auction lasts for 60 seconds, then the users who made the 10 highest bids get their gift cards. The short time period makes the process much more exciting than your average eBay auction, and if you’re planning to spend the money at a store anyway, why not try to get a bonus?
Spread over the 10 winners, RackUp says the bonus usually averages out to an 18 percent discount. The cost of the bonuses are covered by the retailers as a way to drive sales, and RackUp also charges the retailers a fee.
The challenge for this company is that to many prospective customers it may be difficult to grasp.