A reaction to someone telling a story with the intent to be funny, amazing, or something of good quality, but the out come is something that is none of those things, usually ending in silence. The bad story bin is created much like performing the heimlich maneuver in which the fists are locked and the arms are held forward, creating a circle. At the time the story is complete, is deemed a bad story, and the bin is created, you then prompt the person to put an imaginary ball into the bin, which represents the story. In the case they don't place the bad story in the bin, you ignore them until they agree to comply.
Doug: 'Haha, I got a great story, I went to Speedway and got a slushie for like, under a dollar.'
Dan: 'Uh.. k? They always have had cheap slushies, damnit, bad story bin.'