Are expired domain auction services doing enough to deal with deadbeat bidders?
Expired domain auctions can get very competitive. But often times the winning bidder never makes the payment, sending the domain back to auction and wasting everyone’s time, not to mention increasing the total prices winners pay.
That’s the case with one NameJet bidder that a reader tipped Domain Name Wire off to. This bidder — “jerry” — defaulted on over $13,000 of domain purchases, and was still allowed to bid in future auctions. In at least one of those future auctions (s)he was the second highest bidder — meaning he inflated the price the winning bidder had to fork over.
Here’s one of the domain names he bid on and didn’t pay for:
Here’s a link to more domains jerry defaulted on at the beginning of August.
So what’s the penalty for defaulting on a purchase at NameJet? $10. That’s according to F.A.Q. on NameJet’s site:
We will attempt to debit the winner’s NameJet account or bill the credit card on file for up to 7 days. If the winner has insufficient funds to pay for the domain, then the name may go into a public auction where the previous winner will not be allowed to enter. We charge a $10 non-payment processing fee if the combined balance of your NameJet account and credit card are insufficient to pay for your purchases. You will receive daily email reminders listing domains that have been awarded but are still pending payment. In addition, you can view your Reports online to see which domains are pending payment. Accounts with excessive non-payments may be disabled by NameJet.
In other words, default all you want until NameJet decides it’s too much. Then it will cut you off.
Is this a fair policy? Without a reasonable excuse, shouldn’t the policy be one default and you’re out?
Expired domain companies don’t have much short term incentive to crack down on deadbeats. As in the example, this deadbeat increased the price on other domains, so it helped the company. (That said, it’s possible that re-run auctions attract fewer bidders. I lost a domain at SnapNames once that was bid to $5,000, and picked it up in the re-run auction for $1,250.)
Here’s an example where “jerry” ran up the price in a domain auction a couple weeks later:
Jerry won the domain booksworld.com on August 24, and defaulted on that domain, too.
A NameJet phone representative told me that customers can submit complaints about particular users through the customer service interface. If desired, users can submit these complaints somewhat anonymously through the external support tool although you need to provide an e-mail address.
But the person who referred this issue to Domain Name Wire did bring the bidder to the attention of NameJet. So far he’s still bidding.