Registry Refunding Reg Fees ->Registrar ??

[Grrilla]

Could someone in the know please help clarify the rules that allow registrars to hold a drop, release it and subsequently receive a refund from the registry. What is the intended reason for this protocol and what is the length of time given to the registrar to release the name and receive a refund?

This question comes about on the heels of this interesting series of events:
1) I went for a drop and lost out to another party, which turned out, in this case, to be a registrar. (The new contact info showed that the name was registered for a year from the drop date- ie 30Sep 2006)
2) I receive an email from the registrar offering the name for sale. I do not respond.
3) A few days later, (not exactly sure how many), the name is once again available for registration and I reg it.

I know that this has been discussed in the context of names that were already w/ the registrar, were dropped and went unclaimed via backorder, but did not know that registrars could pick up *new* drops, hold onto it for a few days, and than release it. Essentially, the registrar picked up a .com drop of a name I had in other tlds, pitched it to me, and upon not receiving a response, (I'm assuming), released it so that they would receive a refund from the registry within the prescribed time period.

 

[Riceman]

From what I understand they have 120 hours from when the name is registered till they drop it in order to get a refund for the full cost of the domain.

 

[Grrilla]

Tx Riceman. 5 days does seem about right for the time span on this one, although I'm not sure- one of the members that I work w/ PMd or I wouldn't have even caught it. As he mentioned, in the long run it did save me $$s because I picked it up for reg fee and didn't waste a drop on it.

It does seem a bit underhanded for a registrar to use a 120 hr grace period to mine names like this for the purpose of making a potential sale, which is why I was wondering what the actual purpose of the 120hr holding period was. It can't be to give a registrar this kind of sales oppurtunity. Seems like, in this case, someone is working the system, IMHO.

 

[Riceman]

I think the 120 hours is to allow time mainly to delete the names in the event the purchase was fraudulent. many drop registrars purchase names, give them a day of traffic or so and if the name does not have enough traffic they drop it within the 120 hour period. They can "test" names without having to actually pay for them.

 

[Grrilla]

I think the 120 hours is to allow time mainly to delete the names in the event the purchase was fraudulent. many drop registrars purchase names, give them a day of traffic or so and if the name does not have enough traffic they drop it within the 120 hour period. They can "test" names without having to actually pay for them.

So, if I'm understanding you correctly, some registrars are, in essence, "domaining" and are taking advantage of their direct conduit to the registry to pick-up drops for their own domain name sales portfolio. I wonder how common this practice is? I would imagine that the larger outfits are less inclined to practice this, although I do know of one fairly well known registrar that was competing over, (and, of course, winning), drops in a name group that I was actively seeking a while back.

Looking at it from a registrar's POV, using the 120 hour holding rule to mine for drops that may have traffic or resale value could have some justification- it isn't cheap to get set-up as a registrar and, I suppose, this is one of the indirect perks that is available, although I doubt that it was ICANN's intention that a rule that was put in place to protect registrars from fraud, would be used this way.

 

[Riceman]

Some do in fact mine but mainly for traffic. Also understand that verisign(the registry for com and net) watches registrations and drops to ensure registrars are not abusing the system. They are quickly to suspend connectivity in the event of abuse.

 

[Kate]

Well what I can say is that I monitor a few dozen names. Sometimes one expires and gets backordered then becomes available again a few days ago - so I reg it
It happens from time to time so it is obvious registrars are testing traffic in an attempt to monetize names...

 

[Dave_Z]

Could someone in the know please help clarify the rules that allow registrars to hold a drop, release it and subsequently receive a refund from the registry. What is the intended reason for this protocol and what is the length of time given to the registrar to release the name and receive a refund?

The "original purpose" for the 5-day "grace period" was for product testing and
to allow registrants to delete typos. But as Riceman said, Verisign makes sure
registrars aren't abusing the system.

PM sent in a while. If you haven't seen it yet, you're gonna love it.

 

[mcahn]

Sorry I was late in responding to this.

Registrars have 120 hours from the time registered to delete a domain newly registered and receive a refund for that registration. Registrars are debited by the registry when a domain is registered and renewed. Only new registrations are allowed to be credited back during this time, not renewals.

The original purpose was to protect against fraudulent registrations, system errors, or mistakes. However, some registrars take advantage of this period to register names, test them, then delete what names they do not want to keep based on traffic, etc. This was never the intent of this grace period and was always frowned upon by Verisign. Now they have been quite passive about this practice as it has added many more newly registered domains. This is being abused for sure in my opinion.

Many large registrants have become registrars for this very purpose.....but it will probably not last much longer due to the strains in the registry systems and the accounting nightmare that goes along with all the debits and credits in the system.

hope that clarifies.

 

[Mark]

It does seem to be abused more and more lately ... and it seems to me "The Big Boys" are acquiring more connections to the registries under other names as well now (possibly to make it look like they aren't abusing their connections as often). It has ruined the "Drop Process" as we all knew it just a year ago.

Maybe if "We" the consumers start raising more Awareness somehow - and financially back the registrars that are playing as fair as possible , We can get things changed.

It Just seems they would realize they are cutting their own throats in the long run to me. Monopolies of most types have never been tolerated long by the consumers.

 

[pratiknaik]

A little off-topic, but useful information. DirectI reseller's account allows deletion of a domain within 4 days of registration at 1$ deletion cost. I guess, that makes them best choice for domain fishing for small fishes in the pond.

Thanks,
Pratik

 

[Kate]

Interesting info :]

 

[Grrilla]

A little off-topic, but useful information. DirectI reseller's account allows deletion of a domain within 4 days of registration at 1$ deletion cost. I guess, that makes them best choice for domain fishing for small fishes in the pond.

Thanks,
Pratik

Thanks for the info, pratiknaik. That's an interesting innovation on Direct1's part.

Since the O/P, I've gained some new insight into this issue and can, unequivocally, confirm mcahn and other's remarks. There are registrars that operate with a business model that uses the 5 da trial holding period to test names for the purpose of building a portfolio to monitize domain names. And, as all4cost mentioned, the trend is on the rise. Stay tuned. Looks like there could be something in the works.

Oh. As a sidenote, one of the names that precipitated my question was Grrilla.com, a name I had put an inexpensive B/O on which, to my surprise, I didn't win. 2 days later, I receive an email offerring to sell me the name. 3 das after that, (5 das), the name was released and I regged it.

 

[Dave_Z]

Oh. As a sidenote, one of the names that precipitated my question was Grrilla.com, a name I had put an inexpensive B/O on which, to my surprise, I didn't win. 2 days later, I receive an email offerring to sell me the name. 3 das after that, (5 das), the name was released and I regged it.

Did you email the registrar that dropped it and said "In your face!"? :lol:

Thanks also for replying, Monte!

 

[Grrilla]

Did you email the registrar that dropped it and said "In your face!"?

No, because I don't want to discourage them from sending me their future "tests". This is a nice service that they are providing and I really do appreciate it. Oh, and many tx again for the PM, Dave.