Being an eBay enthusiast, I try to buy many of my things on eBay. Not only am I a sucker for bargains, but I also see it as supporting fellow eBay sellers. I hate being outbid on something, but when I am outbid, I accept it, move on, and find an alternative item. But after a recent eBay experience, I have realized that finding an alternative item isn't always the best thing to do. Welcome to the murky ethical gray-area of last-minute bid cancellations.

Here's the situation. I was looking for a hard-to-get DVD, found one on eBay and bid quite a high amount on it. I was subsequently outbid and so I found a cheaper copy of the DVD on Amazon. I was congratulating myself on finding a cheaper version elsewhere when I suddenly discovered that the person that outbid me had his bid cancelled at the last minute, and I was now the highest bidder again for the eBay DVD!

Now I was facing having to pay out over $100 total for two identical DVD sets because the seller had cancelled the highest bid without bothering to inform me first. After some hasty email dialogues, my bid was subsequently cancelled by the seller, but it made me realize for the first time about the pitfalls of bid cancellations. As eBay told me later, "when you are outbid on an item, you haven't necessarily lost the auction because the higher bidders can be cancelled or suspended for any reason at any time". So in other words, it isn't really over until the auction has ended. You shouldn't go looking for another item until the auction you were outbid on has ended.

Many eBayers I keep in contact with expressed surprise when told about this issue. One eBayer who buys and sells told me, "this is the first of me knowing a bid can be cancelled. It kind of puts the bidder in an awkward spot not really knowing if they have the item or not. If they bid at the start of a 10-day auction and get outbid, imagine waiting 9 days to find out if they can look elsewhere for the item!"

Up until the final 12 hours of an auction, both the buyer and seller can alter bids. During the final 12 hours, only the seller can cancel bids. A buyer can alter a bid if they have entered a wrong amount ($999 instead of $9.99), but they MUST immediately enter a new bid right after cancelling the old one. If you cancel a bid but fail to enter a new one, eBay considers that to be backing out of the auction and you can have your eBay ID suspended for it.

The few other exceptions where you can cancel a bid include fraudulent use of your eBay ID; if you're unable to reach the seller by email or telephone; or if the seller radically changes the auction description so you no longer get what you originally bid for. You can read the ins and outs of bid retractions and file a retraction at http://pages.ebay.com/help/buy/bid-retract.html.

Please be aware, however, that eBay investigates all bid retractions, and people that abuse the process run the risk of being suspended. A tally of retracted bids is also displayed on your feedback page. The more bid retractions, the less attractive you look to future sellers (and buyers if you also sell things).

In reality, sellers can cancel a bid at any time for any reason. In my situation, the highest bidder got his bid cancelled for having one negative feedback last year alleging non-payment (even though the bidder strongly contested the allegation in his feedback response). So as the seller on eBay, you seem to have wide latitude in cancelling bids if you feel so inclined. Just go to http://pages.ebay.com/help/sell/cancel_bids.html, click on the link and fill in the form. But I would suggest contacting the previous bidder first to make sure they still want the item!

In my situation, I no longer wanted the item, and if I hadn't checked my "My eBay" page in time, I would have ended up with an item I no longer wanted which could have led to a nasty negative feedback.

What is your view on bid cancellations? Do you think they are justified or is it unfair on the bidders? Let us know!