Is it illegal to do this on eBay?

[.]

You get a friend or family member to bid on your items, thus driving the price up. The item will then be sold for a higher price than it would have done without the help of your friend.

If the plan fails and they end up winning the bid, they can pay to make it look legit, and then you just give them their money back in person. Nobody loses out and you just relist the item and do it over again.

Is this against ebay's terms?

If so, how would eBay even find out? I have thought about it and it seems there is literally no way they could know or prevent this.

[.]

Totally legal, eBay can't sue or anything, for it's ultimately putting money into eBay's pockets. Very smart as well,

[Ryu]

The problem is right here:
"If the plan fails and they end up winning the bid, they can pay to make it look legit, and then you just give them their money back in person. Nobody loses out and you just relist the item and do it over again. "

Because eBay charges fees for selling items

So if you fail to sell items., you end up paying eBay in fees.

I sold my iPhone 4S and some other items and ended up selling $300 worth of stuff in one month.

At the end of the month, I had to pay $50 in eBay selling fees.

So, yeah. It's not a foolproof plan, because you won't make your money back if your item fails to sell and your friend ends up buying it, because you'll continuously lose money.

[Shakil Ansari]

ebay would never know.
and If the plan fails you dont have to pay and loose some bucks during transaction as service tax or something.

[Kristian]

It's called "shill bidding" and may or may not be illegal where you live. But it is certainly against eBay's terms of service and can get your account terminated very quickly if your found doing it. Since eBay also owns PayPal, they may decide to freeze your account there until they are happy with you again. Also, even if the shill bid wins, you have to pay eBay the listing cost every time.

And yes, they have ways of figuring these things out using various analysis techniques. The more you do it the better the chance of getting caught.

[GinoParisian]

That's called shill bidding, and it will get you banned from eBay hot quick with no appeal. Just because you can't think how eBay can find out only indicates your naivete. eBay routinely buys data about its members and uses it to verify their identity when needed. You'd be shocked how much eBay knows about you, or could find out if they felt like it.

Do you really think you are the first person to try to defraud buyers this way?