The problem with discussing a man's auction practices in public, without doing him the courtesy of notifying him are many. One problem is that you only get one side of the story.

Here is eBay's policy on ending an auction early:

"If you are ending the auction because you no longer wish to sell your item, you must cancel all bids on your auction before it ends. If you do not do so, you are obligated to sell to the high bidder."

Further, eBay FAQ about the user agreement says "If you are ending the auction because you have secured a better price elsewhere, or you no longer wish to sell your item, you should cancel all bids on the auction before ending it."

So, when the poor seller finds out he grossly underestimated the value of his chip, he has the right to end the auction early. He merely has to cancel the bids first. He is NOT bound to sell the item to the high bidder during the course of the auction, only the high bidder at the time the auction ends (if it has met, or there is no, reserve). He has the right to cancel the bids and end the auction for whatever reason he feels is appropriate. STARTING an auction creates no contracts! Only when an auction ENDS is there a contract created.

He gave his bidders the COURTESY of a letter explaining the predicament he found himself in, which he did not have to do. He could have just cancelled all bids and proceeded however he felt was best. But because he did the honest and courteous thing, he gets a nice thread started, nominating him for "Auctioneer of the Year", which I take it is not meant as a compliment.

Saying that the man willing to pay $400 should just bid is fine, except that means that his bid will only be one bidding increment higher then the current bid, which could still be way under the actual value. If there are two bidders who recognize the value of the chip and bid accordingly, there is no problem. But if not, this poor seller does not have to take it in the shorts because he was not as familiar with the values of chips as others. Don't put an obligation on him that does not exist. He's done nothing wrong.