Disclaimer: This article is for informational and entertainment purposes only. It is not financial advice. Please do your own research before making any financial or purchasing decisions.

If you’ve ever lost an eBay auction even though you placed a higher bid than the selling price, you’re not alone. I recently experienced this frustration in a recent auction for a 1956 Topps Jackie Robinson: with two seconds left, I entered a max bid of $492.92, but the auction ended at $490—and I didn’t win. At first I thought there was some sort of glitch or that my bid didn’t go through; however, I have a different theory now of what actually may have happened.

Here’s what I think happened, how eBay’s bidding system works, and what you can do to avoid a similar situation.

How eBay’s Proxy Bidding and Bid Increments Work

eBay uses a proxy bidding system. When you enter your maximum bid, eBay automatically bids the lowest possible amount for you to win, up to your max. However, your bid must be at least one full bid increment above the current high bid to become the new high bidder. For example, for items in the $250–$499.99 range, the minimum bid increment is $5. If the current high bid is $490, you must bid at least $495 to take the lead.

What Happened in My Auction

• The current high bid was $490 (but I didn’t realize it had gone up to this price in the last few seconds before closing)
• I placed a last-second max bid of $492.92
• My bid was higher than $490, but not high enough to clear the $495 threshold required by the $5 increment rule
• As a result, my bid was not accepted as the new high bid, and the auction ended at $490 with the previous bidder winning

This is a common misconception: eBay does not accept any bid higher than the current high bid—your bid must be at least one increment higher. Even if you snipe in the final seconds, the system will not accept your bid unless it meets or exceeds the required increment.

What If Two Bidders Place Nearly Identical Bids?

Suppose the high bid is $490 and two people place bids of $495 and $495.01 at the same time. The bidder who entered $495.01 will win the auction, but the final price will be $495—not $495.01. eBay’s proxy bidding system awards the item to the highest maximum bid, but the winner pays only the amount of the second-highest maximum bid plus the minimum increment, if necessary. In this case, $495.01 only needs to beat $495, so the winner would pay $495.

If both bids are placed at virtually the same time and for the exact same amount, eBay awards the item to whichever bid was placed first (going down potentially to milliseconds on the time stamp).

How to Avoid This in the Future

• Know the Bid Increments: Always check the current price and the required increment for that range
• Set Your Max Bid Accordingly: When sniping, make sure your bid is at least one full increment above the current bid.
• Use Odd Bid Amounts: Many bidders use round numbers. Bidding $495.01 instead of $495 can sometimes give you an edge if another sniper also bids $495
• Prepare Your Bid in Advance: Have your max bid ready to go and submit it with a few seconds left to minimize technical issues or lag
• Don’t Assume Any Higher Bid Will Win: eBay’s system will only accept your bid if it meets the increment rule, regardless of when you place it

Final Thoughts

Sniping is still one of the best strategies for winning eBay auctions, but it’s crucial to understand the bid increment rules. If you bid just a few dollars above the current price but not enough to clear the increment, you risk losing—even if your bid is technically higher. Next time, I will be sure to double-check the increment and bid accordingly.