Being outbid by less than a bid increment is definitely possible and, in fact, occurs frequently. To understand how this can happen, it’s important to remember the ‘Next Required Bid’ simply indicates the minimum amount of the next bid. As long as the next bid placed is equal to or greater than the ‘Next Required Bid’, the bid will be accepted. The following example illustrates how a bidder can be outbid by less than the next required bid increment.

The high bid on an active auction item is currently $500.00; the bid increment is $50.00.   Remember that every bid placed is placed in a max bid format. 

Bidder 55555 places a max bid of $700.00.  Bidder 55555 is now in the lead with a high bid of $550, or one bid increment above the previous high bid of $500.00.  The ‘Next Required Bid’ is now $600.00. 

Bidder 66666 places a bid for $600. Since bidder 55555 placed a max bid of $700.00, he will remain the high bidder with a current bid of $650.00, or one bid increment above bidder 66666's bid of $600. The next required bid is now $700.00; which indicates the minimum amount of the next bid must be equal to or greater than $700.

Bidder 66666 decides to place a bid of $710.00. Since bidder 55555's max bid of $700.00 was reached and surpassed, bidder 66666 is the high bidder at $710.00.  The ‘Next Required Bid’ is now $760.00, or one bid increment above bidder 66666's bid of $710.00. 

If no other bids are placed before the auction closes, bidder 66666 will be the winning bidder of the item with a high bid of $710.