What Happens When a Bid Retraction Occurs
When a bid retraction occurs, the proxy bidding process recalculates the current bid total to exclude the previously made bid and the buyer whose bid was retracted is no longer able to win the auction.
Bids can only be retracted under the following special circumstances, which must be reported to eBay as the bid is retracted.
Typos in Bids
A bid retraction is permitted when the bidder mistyped the intended bid amount and as a result, overbid by order(s) of magnitude. For example, an eBay user may have meant to bid $39 on a food processor but accidentally typed $390 instead. This is an honest mistake and would be a justifiable reason to retract a bid.
Changes in Description
These retractions also arise when the seller's description of the item changed significantly after the bid was placed. Say the seller advertised a pair of black, size 12 gym shoes but later amended the description of his product to purple, size 10 gym shoes. It would be reasonable for the bidder to retract the bid, given that he made his bid on shoes in a color that he did not select and a size he cannot fit.
Timing of Contact and Retractions
The seller fails to respond in a timely manner to attempted contact. A would-be buyer may try to reach a seller on a Tuesday but Wednesday of the following week still hasn't heard back from the seller. By this time, the bidder may have seen the product that interested her from another seller and may withdraw her bid.
Just as the timing of contact is important, so are the timing of retractions. In general, attempted bid retractions during the last 12 hours of a listing are subject to special restrictions detailed on eBay's bid retraction help page.
Real Estate Bids
Bids on real estate auctions (land, housing or investment property) are non-binding and can thus be retracted at will. So if you're selling real property on eBay, expect a retraction at any time. You might actually have better luck trying to sell such property offline.
Any bid retraction can trigger an investigation by eBay or a complaint by the seller. In either case, if the bid retraction is determined to have been made without cause (i.e. it falls outside the guidelines listed above), a buyer may be cited for having made an invalid bid retraction. Repeated citations can lead to suspension from eBay.
With this in mind, if you're a seller and taking the steps necessary to ensure that your product descriptions are accurate, you respond to would-be buyers in a timely manner and follow other eBay guidelines, you likely need not worry about any bid retractions reflecting poorly on you as a seller. Allow eBay to investigate and rest assured that you'll come out on top.