My boss was recently in the process of hiring someone who ended up playing his current firm against us via counteroffers. She revoked the offer and moved on to the next candidate. The counteroffer talk really pissed her off, as she felt like the candidate appeared to only be interested in money after that. You just never know how something like this is going to appear to the new firm.

I haven't had this- but I have said that I had another offer but was more interested in working there for x or y reasons and could they move up the base offer? That worked (and was true). Somehow, using a counter offer from your own firm on paper and talking is bragging rights/nice/great.. but also "disloyal" - so who knows how the new company may interpret this. Basically, I'd avoid the wording that it came from your own firm unless you are in some super specialized area that only a few firms do. If you're a consultant, programmer etc.- not so much. I might even consider just going back and asking for more (without the other offer info.)- unless you locked yourself in on what you wanted and then you got it and now want more due to counter. I have always gone back and asked for more- except once since I knew I'd be making close to my own boss (after working as a consultant).

My previous company had a policy never to issue counteroffers.

I never mention other offers unless the new employer asked. I just say I really appreciate the offer and would be happy if my salary is increased to such amount. It worked for my last job. My new job offered me what I put on the application form.

I wrote to the hiring manager and cc:d HR.

Looking for some stories and advice on how to use current employer's counter offer if you know you will accept new offer but want to use the counter offer as a negotiating tool to get more $ out of new employer.