EBay "Shield" or "Bid Shielding" is a scam used by scammers to win EBay bids on very expensive items cheaply. This scam targets EBay sellers who are selling expensive items without a reserve price. A reserve price is the lowest price at which a seller is willing to sell an item. If a seller doesn’t want to sell an item below a certain price, he/she can a set a reserve price.
This scam involves using multiple EBay accounts. One account to bid very low on an item and other to bid very high on the same item.
This is how the Bid Shield scam works
- The scammer uses his first EBay account to bid very low on an item (usually very expensive).
- Scammer then uses his second EBay account to set a very high bid on the same item that other legitimate bidders would not be able to match, discouraging them from bidding. Because other bidders were discouraged by the very high bid set by the scammer, the only bids for that item would be the low and high bids set by the scammer.
- At the last moment before the auction closes, the scammer withdraws the very high bid he/she had placed. This will leave the very low bid that the scammer placed first, as the winner of the auction.
Here is an example:
If an item cost $500 and the seller forgot to set a reserve price on this item. The scammer can place a low bid of $20. The same scammer will then place a very high bid of $6000 on the same item.
This high bid will discourages other ligitimate bidders from bidding on the same item. This leaves only the two very low and high bids set by the scammers for the same item.
At the last moment before the bid closes, the scammer withdraws the very high bid ($6000); leaving only the very low bid ($20) as the winner of the auction.
Ebay rules state a bid is a legal binding contract and you cannot cancel within the last 12 hours of an auction unless you contact the seller. Although bidders cannot cancel the bid themselves with the last 12 hours, these people will contact the sellers and ask them to cancel the bid for some reasons. The naive sellers will cancel the bid not knowing that they are being scammed.
Sellers are advised to ensure that they place a reserve price on the items they are selling on EBay and do not honor suspicious bid cancellation requests.