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Why was I outbid by less than one increment?

This is a normal occurrence. Remember that the winning bid only has to be one increment above the high bid currently showing on the listing page. For example, let's say you are the current high bidder at £12 with a £20 maximum.

Let's say another bidder places a maximum bid of £20.01 and becomes the new high bidder for this item. This new person's minimum bid is £12.50 — one increment above £12.00. As long as a bidder enters the minimum bid amount required, any bid over that will satisfy meeting the bid increment. The winner of the item will be the bidder with the highest maximum. In this case, the winner could win by one pence.

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