Now, I HOPE that by telling you guys about this that you won't take this information and use it for evil. J But, some of you may not be aware about what shill bidding is or what it does. Again, this doesn't go on ALL the time with all sellers, but there are some sellers that got temporarily suspended from ebay for doing it. In reality, ebay could really care less, especially if a power seller is involved, because shill bidding makes THEM more money. Hence, the TEMPORARY suspensions.
This is how it works and why they do it. Seller A has a really cute dress that they think they should make three figures on. So, they enlist their friends and family (who have multiple ebay i.d.'s) to bid early on their dress. Or, the seller herself/himself (who also has multiple ebay i.d.'s) will go to an internet café or some other place with a different IP address and bid on their own items.
Why do they go through so much trouble? By bidding early in an auction, it creates more excitement and desire for a particular item and creates a bidding war. If you are an experienced ebayer, and you REALLY want a particular item, then you know that you never bid on something until the very end of the auction. That's how you win your item without paying through the nose for it.
Why is it wrong? Shill bidding artificially inflates the prices of items. It's called fraud. You paid three figures for a dress that you *may* have gotten for two, because the seller or their friends/family bid against you until they got the price they *wanted*. They basically stole from you. Make sense?
Sometimes this backfires on them, though. The shiller will be the high bidder on the item and the seller will have to *relist* because of a *non-paying bidder*. Well, I always check the feedback left for others by these sellers, and if I don't see a negative left for the *non-paying bidder*, I get suspicious. Also, be leery of second chance offers soon after an auction ends. It could be the seller outbid themselves and is trying to reverse the damage.
How can you tell if an auction has shill bidding activity? One way is to pay attention to the i.d.'s that are bidding on the auction. Run the bidding history of that i.d. through ebay's advanced search option. If a particular i.d. has bid early on quite a few of a particular seller's auctions, but never wins, then that might be something to be suspicious of. Some of these i.d.'s will have low or zero feedback scores as well. Now, that doesn't necessarily mean anything by itself, because there are lots of new buyers joining ebay everyday.
Again, shill bidding doesn't take place in ALL high priced auctions all of the time, but it does go on. And, it's dishonest. Bidders get caught up in the excitement of an auction without realizing that something shady is going on. The next thing you know, you're eating ramen noodles for two weeks because you blew your cash on a not-so-one-of-a kind vintage dress from an unscrupulous seller.