When one person plays with their bag until their hands have a distinct sweaty balls bag odor and then this person places their fingers under the nostril of some tool or jackass. This tool or jackass is then called "bag sniffer".
Chris has been playing with his hairy, sweaty balls after gym class. Once his hands wreak of his sweaty, salty balls he goes over to Reed and tells him he's just fingered a girl. He says, "Smell my finger." Reed sniffs his moist hands. All of the other guys knew what Chris was doing and die laughing when he says, "Reed, you are a bag sniffer!" This title remained with him his entire high school career.