Has anyone heard of this scam

Could be a cheat, but maybe not. As you know, the current high bidders max is unknown. One way to find out someones max is to place a high bid, and then retract it (or have you cancel it). *OR* Some have 2 ID's at eBay. One for selling, and one for buying. They may have just accidentally placed a bid while signed on as a seller, changed their mind, mom or dad said 'no you can't have that' ect...

Why he asked you to cancel bids: If you cancel a bid it does not show up as a bid retraction on their feedback page. If they do it, it does, and remains on their feedback for 6 months. I would cancel and block a buyer with *many* bid retractions.

Valid reasons to cancel a bid include entered wrong amount, unable to contact bidder, or description changed. For any other reason, eBay's own instructions suggest a bidder contact the seller and ask that their bid be canceled, and not do the retraction themselves.

My policy is... If it was an honest mistake, it should not have happened often. One bid retraction on someone’s feedback is not a big deal and it is gone in 6 months. Let them do the retraction themselves.

p.s.

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He said he couldn't do it himself (not sure why)

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Can't retract a bid in the last 12 hours of an auction if bid was placed before the last 12 hours. If a bid is placed in the last 12 hours you only have one hour to retract.

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should I report him to ebay?

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You canceled their bid, so they did nothing wrong to report. If they had retracted a bid for an invalid reason, then you could have. I probably would not report a bid retraction, unless it happened more than once. If you are uncomfortable with them, create a blocked bidders list and put them on it. They will be unable to bid on any of your auctions.

I don't have a big issue with retractions - although doing it 4 hours before the end is a bit much. What I'm getting at is that he has bid twice on my auction with different IDs and retracted one of them (the highest) at the last minute. Actually, to try and keep the explanation simple, I neglected to mention that he did this twice on (almost) simultaneous auctions for near identical items - so I don't accept it was a mistake. He is definitely trying something on, although I can't work out what. Also, both the IDs he is using have zero feedback so he has nothing to lose even if I don't cancel his bids for him and neg him (which he would undoubtedly do to me in return)

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I neglected to mention that he did this twice

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That's a little different. I agree, it's not an accident or honest mistake.

Some just enjoy making trouble for others, even they have nothing to gain themselves. I would put him on a blocked bidder list. If they create another ID, and try it again, I would NOT cancel his bid. If they don't pay, report it. If they do pay, don't leave feedback till you have received feedback from him.

You could tell eBay you believe this person has multiple ID's and ask them to look into it.

Hi. I'm not sure I follow the order of events here completely, but is it possible he is just new and unlearned in the ways of eBay? Maybe he bid on two items, hoping for one, and realized he needed to drop one? (Or, bid on three and realized he needed to drop two?) Maybe one ID is for him and another for his spouse, and he realized they were bidding against each other? Or, maybe he is a kid who got busted by his parents (or even a hen-pecked guy who got busted by his wife!)and told to get out of it? Maybe he got caught up in bidding frenzy, then came to his senses?

Those are still not proper ways to do business, and the guy merits being watched and/or blocked, and reported if he continues. But it doesn't sound as if he gained anything, so if it is a scam, it's a poor one, I think. Maybe I'm missing something.

Littlebit, no he expressly said he wanted to drop both items. I too am struggling to think what he could gain. But how about this scenario: Bidders A,B,C and D are involved in my auction. A and B are good guys and are willing to pay £50 give or take. They bid the item up to £30 (they are not snipers !). C and D are the same person with 2 IDs. Quite early in the auction, C and D then bid the item up to £100, at which point A and B lose interest and never look again. Soon before the end C asks me to cancel his bid for £100 (I don't think he can do it himself < 12 hrs before end). I cancel C's bid and now D is the high bidder - but (is this right ?) - D's actual bid drops from £99 to one increment above the next highest, to £31. Nobody else bids (A and B have lost interest) and D wins at a lower price than A or B would have paid. Now there are a lot of things that would make this not work, not least snipers, but does this sound possible ? It sounds like a lot of trouble to go to with a limited chance of achieving anything. BTW my problem buyer has not responded to my email asking him for an explanation. In hindsight I should have let the auction finish, reported him then either relisted or offered to the next highest. Oh well, I'll know better next time ....

Your scenario is weird, but plausible. I guess I am just not devious enough to think of these things.

It still seems like too much work to me! After all, how many times can a guy pull something like that before he gets caught? Crooks are too short-sighted.