“Your Auction Has Ended”: Will GoDaddy give me back my time and money?

I won an auction for a .com domain name on the 11th of September for more than $1000 USD at GoDaddy Auctions. I didn’t pay immediately. I paid on the 13th of September because I know the problem I describe below and try to pay GoDaddy at the last minute. I always wait for the “URGENT – Payment Due for xxxxxx.com” email from GoDaddy before I pay my won auctions.

On the 17th of September I got the dreaded email from GoDaddy with the subject:

“Your Auction Has Ended”

This means that the domain I had won and paid and thought was mine had been renewed by it’s owner and the auction had been canceled. I would never get the domain name and I would also have to wait for a refund from GoDaddy.

This was not the first time that happened to me. I have had maybe 20 domain names that were renewed after I won the expired auctions. I had to wait for 13 refunds. And that is just from this year and I am not that active at GoDaddy Auctions. The other 7 domains were renewed in the first 2 days so I hadn’t already paid for them. That saved me 7 refunds.

I got an email that my funds were refunded on the 19th of September and I got the actual funds in my bank account the 21st. So GoDaddy had my money for 8 days and I got nothing in return. In this transaction I lost money on the interest I would have gotten from my bank and also lost money from the currency conversion. (I paid in USD, my bank account is in Euros) But more importantly I lost my time bidding on the auction, paying and then processing the refund with my accountant. I could have used the time to go after some other domain name and I could have allocated the funds to a different domain name. That is why I am not that active at GoDaddy Auctions.

But that could be worse. I could have paid on the first day, as many do, and the domain could have been renewed on the 7th day. (owners have until 7 days after the auction ends to renew their domain names)

So the total fund holding period could have been 7+2+2 = 11 days.

Some say this is a good way to see what your domain name is worth. A free simulated auction that can be used as an appraisal. Owner let’s his/hers domain expire on purpose, the domain is auctioned off, owner gets a free appraisal and then owner renews domain name. And then he might hope for an offer from the auction winner or anyone else in that auction.

Also whois contact details are visible the entire period, before/during/after an auction, so anyone can contact the owner after the auction (if he/she has lost the auction) and make them an offer to buy the domain name for a fraction of the winning bid. Owner makes some money instead of nothing and domainer pays less than the winning bid. Winning bidder gets all the hassle. Some registrars change the whois details after a domain is expired to avoid this. e.g. Network Solutions changes whois to Pending Renewal or Deletion. Of course anyone could find the owner’s whois details using Domain Tools but GoDaddy just makes it easier for anyone to do this.

I don’t like these tactics but if the system is broken then someone will try and exploit it. GoDaddy needs to change this process before most of the domainers get alienated from GoDaddy Auctions.

Last month I reported that en.org got renewed 2 days after the GoDaddy auction. It was sold for $21,586 at GoDaddy but the auction was canceled. I just hope the winning bidder hadn’t paid in that 2 day period because he would to wait on a massive $21,586 refund. Then the il.org auction at GoDaddy was canceled, as this name was also renewed, fortunately before the auction was over.

I don’t think that these 2 domains were auctioned intentionally or that these are going to be sold off any time soon. The domains are owned by big organizations like the Enterprise Network and Choose Chicago. But one email from a domainer could have gave them the heads up and they renewed the domains they had otherwise neglected to renew.

So in order to avoid some of the refunds and since you have 3 days to pay after the time auction ends, I suggest you pay the winning bid after the second day to avoid some of the refund hassle. Just don’t forget to pay!