FAQ's from Here
One of the most contentious topics of debate on eBay is sniping. We provide this Frequently Asked Question page to explain what sniping is,
how to combat it, and how to intelligently use your best proxy bid to win the item on which you have bid. Please read the entire page carefully.

What is sniping?
"Sniping" is the practice of waiting until the last few minutes or seconds of an eBay auction and then placing a bid hoping to outbid the current high bidder. Some bidders, who are used to the more traditional auctions where the gavel only falls when there are no more bids, feel annoyed and frustrated by this type of bidding.

I was outbid at the last second. How can win against a sniper's bid?
The only way to protect yourself from being outbid at the last second (also called being "sniped") is to bid the highest maximum you are willing to pay, also called proxy bidding. Ebay encourages all bids to be proxy bids. There are situations that occur on the internet or within your computer that might prevent bids from being entered during the closing minutes of an auction. Bidding by proxy ensures that your bid will be entered. And remember, it's not the last bid that wins, it's the highest.

Do snipers always win?
There is a common misconception that snipers always win. This is not so. To win, a sniper must outbid you. If someone places a last-second bid that isn't high enough, they almost never have enough time to try again and place a winning bid before the listing ends. On eBay, it is not the last bid that wins, but the highest.

Why shouldn’t I bid lower than my maximum, so I can win the item for a bargain price?
We encourage all members to use the proxy bidding system to bid the absolute maximum they are willing to pay for an item right from the start and let the proxy bidding system work for them. The proxy system will not take more of your bid than necessary to win the auction, thereby guaranteeing you the lowest winning price possible. This way, although it may be disheartening if you are outbid, you will have the satisfaction of knowing someone else was willing to pay more than you were.

Why doesn’t eBay do something to end sniping?
Sniping is an acceptable form of proxy bidding. The only difference between a snipe bid and a bid with five days remaining on the auction is the timing.

Why doesn’t eBay just extend the auction?
There are many reasons why eBay does not have an auction extension (AE) feature when bids are placed in the last few minutes or seconds. First, by having auctions last three, five, seven or ten days, eBay has established a level playing field. Any bidder may bid at any time during the auction’s duration. Auction extensions, while seeming to reduce sniping, in fact have the opposite effect: they turn everyone into snipers. Further, sellers who have listed their items for a specific period expect the auction to end at that time as well; this simplifies their schedules. Primarily, our reason for not implementing AE is that it would jeopardize the proxy bidding system, the very heart and core of eBay. If one knows an auction will be indefinitely extended, there is no reason to place one’s maximum bid at any time.

Isn’t that unfair or dishonest or unethical, bidding in such a manner that I don’t have enough time to counterbid?
Sniping is an acceptable form of proxy bidding, a bid entered by a registered user within the time frame of the auction. That’s why eBay encourages you to use the proxy system of bidding and, above all, bid the maximum amount you are willing to pay. And remember--nothing can counter-bid faster than the eBay proxy bidding system!

But I held the winning bid for the last four days! Then at the last minute, a sniper stole my item!
Holding the high bid for an extended period of time does not mean you are going to win the item. Until the auction ends and, indeed, until the seller is paid, the item on which you are bidding remains the property of the seller alone.

Why don’t snipers bid honestly, and get into a lively bidding war? They spoil the fun for honest bidders.
Snipers are honest bidders also. On eBay, you may bid at the beginning of an auction, the middle, or at the end. All bids count. All bids are valid.

Can I leave the sniper who outbid me a negative feedback?
No. You can leave feedback only to another user who was involved in a transaction with you. You must be either the buyer or the seller.

Isn’t sniping just like shill bidding?
Shill bidding is the deliberate placing of bids in order to drive up the price of an item artificially. This is also known as "bid padding" and is not allowed.

Snipers don’t have any sense of community. They’re interested only in their own selfish desires.
Snipers, like everyone else, are bidding on an item they want to own, for whatever reason. Everyone who bids on an item on eBay is acting in their own interests.

Don’t snipers cost the sellers money, by preventing counterbids?
Any bid by a sniper raises the selling cost of the item by at least one bidding increment. What costs sellers money are bidders who do not understand the proxy bidding system and fail to bid their true maximum.

Why wouldn't a sniper bid, say, $50,000 for an item, thereby insuring a win?
Nothing prevents such a scenario from happening. However, if another user bid $49,999, also in an attempt to insure a win, the unhappy winner would still be required to pay for the item at the final bid price of $50,000.

Shouldn’t eBay be more like a “real” auction?
eBay auctions are on-line auctions. They differ from auctions you attend in person. While on-line and live auctions are open to the public, an auction in Peoria, for example, is not generally heavily attended by people from Germany, England, or Australia. Live auctions are held in a physical location, with people in the room. eBay is a 24-hour, seven-days-a-week online auction open to the entire world. Live auctions do not run three, five, seven or ten days, while eBay auctions do. eBay auctions are closest in format to a PBS TV auction, in which all bids on an item are accepted only to a certain time.

The sniper beat my bid by a mere fifty cents! How did he know exactly how much to bid to beat me?
Given the nature of the proxy system of bidding, it is not uncommon for a newly-entered bid to best a previous high bid by less than the bidding increment. No one--not the sniper, not even the seller--knows your true maximum bid. For a full explanation of how you can be outbid by less than the bid increment, please go to the Bid Increments page.

Why can’t snipers bid their true maximum?
Generally speaking, snipers always bid their true maximum, knowing they will not have time to counter-bid if they are outbid by someone else’s proxy bid.

But I don’t know what my true maximum is!
Do your homework. Research the item and find out its value. By not bidding your true maximum you are at a great disadvantage, not just with snipers but with any other proxy bidder. A true maximum can be defined in many ways: it may be the actual value of an item (a rare dime has a face value of ten cents); it may be the collector's value of an item (that same rare dime is worth $25 in the marketplace); or it may be the sentimental value (that same rare dime is from the year of your birth). Only the buyer knows the true maximum value of an item on eBay.

But I have only a slow 28.8 modem. How can I possibly compete against a sniper with a fast connection to the internet?
When you bid, the amount of data sent to our eBay server is very small. Therefore, the speed of the computer or connection to the internet plays an insignificant role in the outcome of the auction, sometimes even a fraction of a second.

I've seen some sellers say they won't honor a bid from a sniper. Is this allowed?
No, this is in clear violation of eBay rules. The seller may cancel a sniper's bid if he has time, but must honor the highest bid at auction's end.

What if I still need more information or have other questions about sniping?
If you still have questions on sniping, please visit the Bidding Board for more help.