This is what eBay says about canceling a sale:
“When a seller lists an item on eBay and a buyer bids on or buys it, the seller and buyer enter into a contract that both members are expected to honor. For sellers, this contract includes both formal requirements, as well as informal, “common-sense” obligations to provide good service to their buyers. If the seller doesn’t meet these requirements, it leads to a bad experience for the buyer and may result in negative or neutral Feedback or low detailed seller ratings (DSRs) for the seller.
Sellers who don’t meet these requirements and obligations are not honoring their contract and are creating bad experiences for buyers. Sellers who create excessive bad buyer experiences compared to how much they sell may violate the Seller Performance policy.
Buyers can let eBay know about their experience with a seller through item not received or item significantly not as described disputes, as well as Feedback, including DSRs.
To ensure a minimum performance standard from all sellers, eBay requires sellers to maintain at least a 4.3 average for each DSR (Item as described, Communication, Shipping time, and Shipping and handling charges).
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Sellers with one or more DSR below 4.3 may be subject to lowered standing in search results.
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Sellers with one or more DSR below 4.1 may be restricted from listing until their DSRs improve.
This average is based on ratings from the past 30 days unless a seller has less than 10 DSRs for that period. In this case, eBay will evaluate DSRs over the past 12 months instead.
Sellers are also required to resolve all performance issues on accounts that are not in good standing before buying or selling with other accounts. Accounts that have been restricted or sellers who have a lowered search standing are not considered to be in good standing. Sellers who are not in good standing are not allowed to register new accounts or use an existing eBay account to avoid buying and selling restrictions or other policy consequences.
Violations of this policy by a seller may result in a range of actions, including:
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Listing cancellation
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Forfeit of eBay fees on cancelled listings
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Selling fee schedule adjustments
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Requirements regarding payment options and potential holds on payments made through PayPal
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Limits on account privileges
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Loss of PowerSeller status
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Decreased visibility in search results
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Account suspension
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Referral to law enforcement ”
The Second Offer is if, for some reason, the winner of the auction cannot complete the purchase, not because the seller doesn’t want to sell it to the auction winner.