What Is Your Understanding Of The E-Bay Buying And Selling Policy?

As a marketing type myself, this is one of them strategies, where some of the same buyers try to unsettle the sellers confidence in their listings by offering a bit more than the sellers starting price even though they may have bidded already at a lower price, thus quite often walking away with the item attained by some mystical powerselling hustler method!!

My understanding is that you cannot go off site to finalise the transaction. Both these people should be reported. I also understood that the seller can set a reserve price...being a figure they hope to receive. If the reserve is not met, the auction is passed in. There's no point in auctioning items at a loss. I didn't think you could withdraw the item once the bidding has started. I haven't seen a "Make an offer" tag.
Definitely, report those two people. What they are doing is cheating.

i wouldn't want to be in your daughter-in-law's situation. it's really hard to accept that i've rejected an offer that is so much better than what i actually got. guess i would have done the same thing as your daughter-in-law since there is already bids on the auction. don't think i'll report it though, as the seller merely made an offer. the no-sell outside e-bay policy is crafted to protect buyers and sellers. sometimes sellers are approached by scammers who offered a much higher price for the item but failed to pay after the item is delivered. cheers;p

I think eBay does have an option in their system to end the auction early, stating the item is no longer available. Your daughter also could have claimed their was an error in the listing and ended early.
Did she do the right thing. Morally, yes she did. I've been the high bidder on items that were ended with less than 30 minutes remaining and these were the reasons that were used. The real reason was the item wasn't being bid on, and the seller just wasn't going to sell the item for the current high bid.

In these days of eBay, with the insane fees a seller is charged... listing fees, final value fees, Paypal fees and no protection against non-paying bidders (other than not leaving them a positive feedback) I will no longer have any problem pulling an auction that hasn't reached a price I'm happy with.
Currently, I set auctions at a price I'm already happy with selling the item at. If it only receives one bid, that's okay. Multiple bids, I'm very happy. I don't end auctions early to accept outside offers, even if it means I sell the item for less than the offered price.
As far as reporting the bidders to eBay, no I wouldn't. First off, eBay really doesn't do much to buyers unless they don't pay for items. For making offers to end early, the only thing they might do is warn them about their policy. Most likely the bidders would never bid on one of your daughter's items again.
It does stink that she sold an item for far less than she could have sold it for privately, but I think she did the right thing. I'd consider setting a price that she's happy with selling items for, that way she's never disappointed.