TylerCruz.com: An Internet Entrepreneur's JourneyThe journal of a web entrepreneur on his journey to wealth.

The 5-Day Domain Refund & Domain Kiting

Early yesterday morning I couldn’t sleep and decided to partake in a small $5 poker tournament. Since poker tournaments can take many hours to complete, I decided to look for some domains inbetween hands.

I ended up registering: 

• AstrologyForums.org
• AstrologyForums.net
• HostingForums.org
• WeightLossForums.org
• WrestlingForum.com

I was pleased, especially with HostingForums.org and WrestlingForum.com. A rough guesstimate was that they’d bring in several thousand dollars. Unfortunately, somebody had beat me to HostingForums.org (damn!), so that was a disappointment. However, there was a far greater disappointment.

Wanting to help gauge the value of the domains I just landed, I typed in “wrestling forums” on Google. To my surprise, as well as concern, I saw that the #1 position was held by… none other than… WrestlingForum.com. My initial reaction was a split-second of disappointment (which turned out to be correct in the end), followed by a split-second of eager anticipation and hope: had this domain of a popular website somehow expire without the owner knowing?

I clicked on the link, hoping I’d get a DNS timeout error, but the site loaded up fast and fine. Damn. I then, reluctantly, began to check what I had suspected. Yes, I hadn’t registered WrestlingForum.com, but WrestingForum.com! I accidently typed the wrong domain! This is the first time that has ever happened to me, but it makes sense… back in the day when $8 meant a lot more to me, I would be very careful when doing such purchases, and double check such details. But these days I’m more concerned with grabbing the domains as soon as possible.. when I’m registering, I actually believe that mere seconds count.

Anyhow, the typo discovery was a big disappointment, I had purchased the domain for 2 years, and so while this wasn’t a huge amount of money lost, I was still disappointed in that I had lost it on such a stupid mistake.

When crying to my friend Zeeshan for sympathy, he notified me that as per GoDaddy’s contract with ICANN (Internet Corporation for Asssigned Names and Numbers), I had my right to a refund if my purchase was within 5-days. I now remember hearing something about this before, but had completely forgot about it at the time. Anyhow, this news made me happy.

And so an hour ago I phoned GoDaddy. The customer support representative was very down-to-earth and nice and instructed me to cancel the domain from my account. He reassured my concern that even though there were no messages anywhere stating I’d receive a refund, that I would still get one if done within 5-days of the purchase, and that in the future I could just do the same, without needing to contact support. Great, problem solved, and knowledge learned. I was satisfied.

While it only took a couple minutes for the above to take place, we ended up talking for a good 20-30 minutes. He was a real cool guy, and actually surprisingly knowledgable about the domain industry. Usually these tech support people have little-no actual working knowledge on the industry, but this guy did, so it appears GoDaddy has high standards when it comes to hiring employees.

Our lengthy conversation started when I had inquired as to how much the cancellation fee would be, which quickly sparked our rant on domain kiters.

Domain kiting is when people (mainly companies) take advantage of the 5-day return policy, and register tens or thousands (or even millions in the case of some registrars) of domain names, and park them (put up ads). When done in such high volume, this can return a lot of cash. The domain kiters then cancel all the domains for a large refund. This is domain kiting, and it’s a big problem. This site explains it in more detail.

The term domain kiting was actually coined by the ever-cool, knowledgable, and business-savvy Bob Parsons, entrepreneur and CEO of GoDaddy. He originally spoke of domain kiting one year ago. Here is an excerpt from his domain kiting post:

“Out of 35 million names — 32 million were part of a kiting scheme.
During the month of April 2006, a little more than 35 million domain names were registered. Of these names, 32.7 million were used – most again and again – but never permanently registered. These 32.7 million names were part of a scheme – a growing abuse of the domain system — one I wrote about in my last blog article. It’s an outrageous practice. I used to call it the add/drop scheme. After thinking about it, I think the name “add/drop” sanitizes the practice too much, so I’ve decided to call it something closer to what is actually taking place. The name I’ve decided upon is “domain kiting.” ”

Anyhow, the rep was so pissed with domain kiting and was really getting worked up. It turns out that there are actually no fees for cancelling a domain; Parsons is pressuring ICANN to inflict a fee on domain kiters, which should greatly help prevent their temporary usurping of domains, but assured me that they wouldn’t impose fees on legitimate refunds, such as in my case. As he put it, they don’t want to penalize sweet old “grandma” for making an accidental domain. We also covered discussions on typosquatters, people registering domains in the wake of the Katrina disaster, etc.

He went on to give me tips on cashparking and such, and well, this was my first time contacting GoDaddy support, but from what I’ve experienced so far, I’m very impressed.

Anyhow, there you have it. If you ever make a typo or legitimate mistake when registering a domain, you now know that you can get a full refund. Now, that being said, I haven’t seen any refund yet, but maybe it takes a couple days to process…

[Update: The next morning I received the refund from GoDaddy through PayPal :)]

Oh, and that poker tournament which started all this? 4.5 hours later, it was over, with me taking 1st place of course 😉