The Domain Business Can’t Make The Customer Pay For Someone Else’s Mistake

Kevin Murphy over at Domainincite.com wrote a post yesterday, entitled “Guy hit with $1,600 bill a month after registering “premium” name for $12.99″

The post goes onto explain:

“One DI reader, who said he’d rather not be named, received a bill from the registrar today for $1587.01 for a .みんな domain name he hand-registered March 10 for the base fee of $12.99.

The email from 101domain stated that unless he pays the bill by 5pm PST tomorrow, his domain will be deleted:

It has come to our attention that the .みんな registry considers certain name(s) that you have registered with us as premium names and that there were some intermittent pricing errors on our website allowing you to purchase these name(s) at regular pricing. The cause of this error has been resolved and we sincerely apologize for the error.

In order to correct these pricing errors, the Registry has granted us the option to delete these names if we are unable to collect the premium pricing from our customers.

Due to a short deadline, payment must be received by Thursday, April 24, 2014, 5pm PST in order for deletion of the name not to occur. In the event that payment isn’t received by Thursday, April 24, 2014, 5pm PST the domain name(s) will be deleted, released back into the pool of available domain names, and any payments previously received for the domain names will be fully refunded to you.

The registrar offered a full refund of the $12.99 and a 20% discount coupon as compensation.”

We chatted about this on the DomainSherpa.com show yesterday and we all agreed that the registrar not the customer should eat their mistake.

Domainincite’s post goes on to quote the COO of 101Domain, Anthony Beltran that “fewer than 50″ names were affected by the pricing error, all of them in .みんな. :

In order to offer pre-paid orders, 101domain’s practice is to put up pricing as soon as it is confirmed and as soon as we receive lists of premium names, reserved names, and name collisions from a registry. This is generally well before EPP is available so there is no live domain:check. Our search queries these lists internally to offer accurate pricing well before most other registrars do so that our clients are well ahead of the curve with plenty of time to research and submit orders. Mistakes do rarely occur; some premium lists are fluid, complications have been introduced with SEDO and AFTERNIC getting exclusive listings of premium names (while we have access through their distribution channels like SEDO MLS), or names are snapped up in Sunrise, EAP, or Landrush. We will typically notify clients prior to names becoming active of any changes in pricing or availability and promptly refund in full if requested. With this TLD, this did not happen properly unfortunately.

Sorry no other business in the world operates this way.

When Walmart put up a price on its site of $9 for a $600 item and people bought it, they got the item for $9.

When Best Buy miss-priced an item in their store at for $29.95 instead of what should have been the price of $135 they honored the lower price

Even airlines honor their own price mistakes:

“”When certain Delta fares on the airline’s own website and other airfare booking sites were showing up incorrectly, offering some savvy bargain hunters incredible deals. A roundtrip flight between Cincinnati and Minneapolis for February was being sold for just $25.05 and a roundtrip between Cincinnati and Salt Lake City for $48.41. T

The correct price for both of those fares is more than $400.”

It isn’t known just how many folks snapped up the bargains, but Delta says it will honor the fares.”

“”Delta Air Lines Inc. (DAL) said it will honor tickets sold at incorrect prices today on its website and through other booking channels after customers snapped up bargains like a round trip to Hawaii for $6.90.

However the domain industry seems to be the only one where if someone upstream screws up the downstream customer gets holding the bill.When Zappos’ 6pm.com site,  posted all items on sale for $49.95, they honored the price despite costing them over $1.5 Million.

So plain and simple, In the domain industry if a registry or registrar makes a pricing mistake they should eat it, not the customer.

Making the customer pay for your mistake is bad business.

That is business 101

Pun intended.

 

Comments

  1. says

    This is called “Extortion” and my views are very clear on this weeks DomainSherpa.com show. Outrageous and no domainer should stand for this silently because it may happen to you NEXT! 30 days later?? Shame on ALL of them. Whoever was NEGLIGENT should be holding the bag.

    • k3ria says

      I registered some very good domains that were not on their reserved list and they just stayed in my account at 101domain.com under PROCESSING. When I contacted 101domain, they told me that the registry had changed the status of the domain to RESERVED and I couldn’t happen. I registered this specific domain the day before land rush was over and it was available and not land rushed or paid for by someone else. I don’t think that this is a fair tactic for registries to do this. The registrar told me that when they attempt to register the domain the registry sends back a status. So, somewhere between registering the domain and paying, the registry decided that they wanted the domain to be a RESERVED domain.

    • k3ria says

      FYI, I also got 3-4 “bills” for 1640 dollars on domains that I bought for 12.99 that they changed to Premium after I registered them. I declined their offer to pay them premium and got a refund.

  2. ayemenian says

    WOW!!!
    I just went to a meet-up hosted by Uregistry, Donuts and Minds & Machines in Santa Monica.
    This was discussed and basically they said that they would not do something like this.
    At least, that was the feel that they were trying to give.
    I’ll be honest and say that most of the domainers that I talked to did not trust a lot of what was said.
    Now here is a perfect example.
    By the way, let’s say they back off the demand of the higher pricing.
    Okay, once the domain goes to get renewed next year, what happens then.
    Or, if your are doing great in the domain using THEIR T.L.D., in five, ten, or twency years, what happens then???

    1and1 really screwed up by demanding this money at a time when they and everyone else are trying to establish credibility into this space.

    What an incredicdible P.R. move.
    .Com’s is the only way to go so far.

    • k3ria says

      We are writing to notify you that there has been a pricing change on your pre-ordered domain name(s). Until accepted and confirmed by the registry, all pricing and dates are subject to change and, in this case, the registry has classified the below domain name(s) as premium domain names. Premium name lists may change prior to a new domain name extension launching which we unfortunately have no control over.

      The premium domain name classification system was put into place by the registry as a way to simplify the premium domain name auction system. These premium domain names are being offered at a higher yearly/multi-year rate than normal domain names. In order to register a premium domain name you must pay the increased registration price in addition to any set-up fees you may incur (Sunrise, Early Access, etc.). This premium registration price will also apply at renewal.

      In order to keep your pre-order locked in, please log into your admin panel and pay the outstanding invoices. General Availability starts on May 7, 2014 at 14:00 UTC, thus if you are interested in these names, please submit payment before then. If you choose not to pay the difference, 101domain.com will refund you the amount you have already paid.

      If you have any questions, please don’t hesitate to contact us at support@101domain.com, or log in to your admin panel and submit a support ticket.

      We thank you for your continued business and apologize for any inconvenience this may cause you.

  3. Kevin Murphy says

    Normally I’d agree with you immediately Mike, but the big question here that I haven’t quite got my head around yet is renewals.

    Should 101domain eat its mistake every year for the duration of the registration?

    • says

      Yes they should and here’s why:

      1. The customer was never presented with any notice that renewals would be anything other than the standard registration fee and was not given the opportunity to evaluate if he would make this purchase given the inflated renewal pricing.

      2. The only person actually losing anything real (or realized) in the even of a cancellation is the customer. The registry and the registrar both get paid, just not what they *hoped* (and never had any realistic, provable guarantee would be realized). Any argument about their “loss” is academic at best and even if this is a no-brainer phrase in that language no one can say what would have happened if this mistake was not made.. a mistake by the registrar/registry relationship, not the customer.

      3. The dollar amounts involved here although not insignificant are really quite petty when put in perspective. ~50 domain at premium (read: inflated) pricing is still a drop in the bucket of what the registry will likely spend in advertising, marketing and operational expenses. They should be leaping to take advantage of the goodwill they stand to gain by doing the right thing by the customer.

      4. They (the registry/registrar relationship) fscked up. They should take their medicine and learn from the experience. The customer should not be penalized for picking a desirable domain string from options presented to him as available.

      It should also be pointed out that the domains potential resale/monetization value is much greater and much more plausible with standard pricing than premium reg/renew pricing therefore it is worth more if it is not deleted. Period. Full Stop.

  4. says

    On the other hand, if a real estate such as a 1 million house misprinted the flyer for mere $10,000, you don’t expect the transaction to go through or somehow force the seller to sell the house to you for $10,000.

  5. says

    @Berkens,

    You stated: “However the domain industry seems to be the only one where if someone upstream screws up the downstream customer gets holding the bill”.

    I’m sorry that’s bullshit! It’s NOT the domain industry. It’s the new gTLD Registries, and ICANN that have left loopholes for things like this, and much more, to happen. Wait till renewal time comes, and you can’t imagine what’s possible.

    You are very tepid in criticizing these things. I watched you on DomainSherpa, not only give unenthusiastic, apathetic, muted, halfhearted condemnation to the act, but you tried to place the blame squarely on the Registrar alone, as if there is a difference, there is no difference, it’s half a dozen on one hand, and 6 on the other. It’s a scheme between them all – the cabal. Yes, some Registry policies are implemented at the Registrar level, but we cannot differentiate who is doing what, it’s all of them.

    Just because you speak softly, and in a studious manner should not exempt us from examining what it is you are saying. I urge you to put all these acts by these Registries together, don’t compartmentalize them, deal with them as a whole. You and I are NOT the mouthpiece of domain investors. You only speak for yourself. And I speak for myself. So, you can’t continue to be the agent to soften the blows.

  6. Louise says

    @ Domenclature said:

    You are very tepid in criticizing these things

    STOP CRITICIZING BERKENS!!! He’s the good guy, as is Rick Schwartz. Thanx for coming out of hibernation, @ Rick Schwartz, to voice your condemnation. Thanx for furthering the discussion started on DomainIncite here, and voicing your dismay, from the perspective of a blogger, investor, and attorney.

  7. says

    Domen

    I’m a different guy than Rick

    Rick is very animated and vocal, I’m more laid back and way less animated.

    Everyone is different

    On Sherpa Rick said it all

    Once someone says something that is spot on as far as I;m concerned I’ll just line up behind him and say I agree

    Just for myself I’m not going to be ranting and raving after a guy just appropriately did so and hit all the points

    There have been a many instances before new gTLD’s where there were issues.

    The snapnames bidding scandal was way before new gTLD’s, registrars keeping the best of the dropping domains for themselves happened we wrote about years before the new gTLD’s.

    Trademark owners overreaching.

    Registrars not allowing transfers to go out.

    Plenty of issues that existed before new gTLD’s and now there are more issues as the space expands.

    ICANN left many holes, we pointed out policy mistakes they made years ago which are now resulting in issues for registrants.

    You’t can blame one thing or one source of all of the worlds problems even in the domaining world.

    You can only call people or companies out on an issue by issue basis when they arise.

  8. says

    “Rick is very animated and vocal, I’m more laid back and way less animated”. – Michael Berkens

    Less animated is okay until a Tiger attempts to eat a child. A less animated guy should leap to his feet, and try to save the kid; if they don’t? There’s room for criticism, even for the laid back.

    To me, Jesus Christ is the most Gentle in history, and perhaps forever. But guess what, Berkens? He showed outrage in Mathew 21:12.

    12And Jesus entered the temple and drove out all those who were buying and selling in the temple, and overturned the tables of the money changers and the seats of those who were selling doves. 13And He said to them, “It is written, ‘MY HOUSE SHALL BE CALLED A HOUSE OF PRAYER’; but you are making it a ROBBERS’ DEN.”…

    That’s not being animated.

    I like Berkens, but I don’t think ‘like’ has anything to do with criticism; I’m dealing with the issues. It is outrageous to charge money for a domain name, and come back later to ask for more money on the name -weeks later. That is absolutely unacceptable. I don’t care if it’s Google doing it, or 101. It is wrong.

    It should not only be condemned, something must be done about it.

    BTW, Berkens, I’m holding you responsible to get these people to return those names to their owners. If don’t return those names, I will go on a campaign to boycott your blog, because you have been the new GTLD consultant, and liaison to the domainers. You’ve gotta go to Google and 101, and ask them to return those domains.

  9. says

    ADDENDUM:

    @Michael Berkens,

    I should mention that it is my opinion that it is you that is causing Schilling to hold back thanks of names that he had otherwise pledged NOT to.

    I believe you took a long haired country boy, and gently bent his mind. At least when it comes to dot link, you and Cahn are the ones holding those premiums. I believe you picked them out. So, tell me, how are domain investors supposed to sit here and ignore these roles you are playing?

    • Raymond Hackney says

      Right of the dot has no relationship with Uniregistry, you cannot blame Mike for anything Frank and his company do. If you think Frank Schilling is a long haired country boy, akin to being a hick or country bumpkin then you really don’t know who Frank Schilling is.

      • says

        The saying’s got nothing to do with hick or negative stuff.. That is a saying, and a song, it’s not literal.

        Country Girls Lyrics
        John Schneider

        I’ve been to California, where the ladies look so fine
        They could take a long-haired country boy and softly bend his mind
        Made love in New York City where they dress in silk and pearls
        But Lord I swear there’s nothing anywhere
        That’s better than a country girl…

          • says

            Yeah, I apologize I can see where that creep in. Naaa I didn’t mean it that way. Mike is quite sophisticated tho; very smart, and if you don’t read his input carefully, you may not get it all. He is unassuming, “less animated, and laid back” but he does attend ICANN Meetings, belongs to a club with Google, Godaddy, and other big shots, consults for new GTLD Registries, an attorney, with multi-million dollar dotcom portfolio, multi-million dollar yearly sales, gorgeous wife, Monte Cahn as partner, friends with the top 1 per centers, Hackney as w writer, Schwartz and Stahura as friend, has a dog with it’s own honorarium at TRAFFIC, has another obedient dog with a pedigree at home, mansion in Florida, 4K TV etc etc

            Yeah, Berkens can influence anybody!

  10. says

    Domen

    I don’t know what planet your living on but Frank’s Uniregistry has not hired RightoftheDot.com to perform any services for him or it.

    The “country boy” Frank and his $60 Million dollar plus investment is making decisions without any input from Monte or myself

    • says

      I don’t know Berkens, My browser is showing Uniregistry as Background page here on your site for a month now, I must try to clean my cache or something. Again see my response above, the country boy is in reference to dot link, figuratively.

      I thought I read you offering some new gTLD (dot link?) to someone a couple of days ago. I will try to look for it.

      • says

        Oh I found it, it’s dot Club! How am I supposed to know the difference between dot club and dot link, you really can’t blame me on this one.

        The context is still the same, you and Cahn have a lot of dot club domain names stashed away as ‘premiums’, right?

  11. says

    Domen

    Yes we are working with .club and it should have much “finding out” since I wrote a post about it and have disclosed in several posts about .club.

    Yes we told the registry to reserve domains like night.club, country.club, golfclub, tennis.club and a few thousand more

    Some have sold already (see Sedo sales chart last week)

  12. says

    Domen

    PS Uniregistry approached us with a price to take over the spot for advertising that previously went unsold.

    They are paying us for that spot just like every other blog including DNjournal, we accept advertising, don’t mean we are working with that company.

    If you actually have a business, a website or something that you do other than comment on this and every other blog and forum in the domain world everyday, and want to advertise it, as long as its legal, we will take your money too, if we have space

  13. says

    “He does attend ICANN Meetings, belongs to a club with Google, Godaddy, and other big shots”

    Just to clarify a company I’m involved in ROTD is a member of a trade organization not a “club” with Google, Godaddy, and other big shots. Its called the DNA and if your in the new gTLD space you can apply and PAY to be a member just like ROTD.

    Regarding ICANN meetings I only went to one of three last year and I’m missing the 1st two of this year (not sure about going to LA) Monte has been going for ROTD.

    Once again ICANN meetings are opened to everyone and they are free and you can go to any session that is opened which is most of them and you can meet people in the space.

    Regarding Paul Stahura, he is not what I would call a Friend

    Not sure what your definition of a friend is, but for me he is just an acquittance.

    Although I certainly have met and chatted with the guy several times, over the years, I have never seen him socially or called him just to chat, or been invited to his house or had him to my house, and when we have chatted in person, its always about business, so not what I regard to be a friend and for years anytime we have talked about business he has told me NO, so we don’t work with Donuts and they don’t even advertise on the blog, and I actually chat with Dan and Jon more.

    “Has a dog with it’s own honorarium at TRAFFIC”:

    Unfortunately Bandit passed away so I no longer “have him”, he is buried in a cemetery but thanks for bring up its very nice of you.

    “He has another obedient dog with a pedigree at home

    I actually have two pedigree dogs at home

    obedient? not so sure about that one, they are young and learning but pretty much do whatever the they want

    I have one home in Florida and by Florida standards although it is a great house its not a mansion by any means

    Also no we do not have staff that waits on us although I have been trying to talk Judi into hiring a girl who would come over and feed me grapes so far not much movement on that one

    4K TV yes i have one , like it alot

    Yeah, Berkens can influence anybody!

    Yes I’m a real king maker.

    • says

      It is true that having me around in a blog is not easy, because that usually means the Blogger must dot his i’s and cross his t’s all the time, and must be factual, fair, knowledgeable, without conflict of interests…

      And I hate kings.

      So, we shall see.

      • says

        @Kevin Murphy

        FYI After I commented on your blog against the transfer of internet “Stewardship”, I received follow-ups from Washington DC who read the comments from your blog, and effectively smothered all the gains you made attempting to take the internet to a phantom “Multi-Stake” holder.
        I’m surprised that you are hell-bent of disrespecting me in your comments. I ask you again to desist from such silly attitude. The next time, I will engage you head-on.

        I have made constructive contribution on your blog, and you did not ignore me, why would you do so here? If you disagree with me, simply state the reasons why, but don’t go off in a tirade about “trolling” and so on…

  14. says

    Kevin

    I don’t think he is going to go away

    He already threaded to unsubscribe from the free publication several times

    I’m responding not for his benefit just to make sure his wild accusations don’t go unanswered for others benefits

    • says

      @Berkens,

      Thank you for trying to clear things up, as for the rubric of grading, I give you a 3 out of 10.

      I do go away if I decide a Blog is useless; and when I go, the lights usually turn off on that Blog. Ask Elliot, he’s been in the dark since I left his blog about a year now.

      So, let’s work together to make things better for all. I deal with issues, and I’m fair. Disrespect me at your own peril.

      • John Berryhill says

        “I do go away if I decide a Blog is useless”

        Aha! So by bringing your comments here, and as a logical consequence the audience which reads blogs based on your parrticipation, you are promoting Uniregistry!

        Hence, we will understand that if you continue to post here, then you are probably being paid by Uniregistry to provide them with the publicity and attention your participation necessarily causes.

        Clever.

        • says

          “Hence, we will understand that if you continue to post here, then you are probably being paid by Uniregistry to provide them with the publicity and attention your participation necessarily causes”.

          In statistics, a probability distribution assigns a probability to each measurable subset of the possible outcomes of a random experiment, survey, or procedure of statistical inference.

          So let’s assign a fat zero to that. P[E^C] = 0

  15. John Berryhill says

    Mike,

    What are your thoughts about people who do not honor “buy it now” prices on their domain sale listings?

    Be specific.

    I await your reply with rapt attention.

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