In September I complained about the NameJet Reserve at the Namejet auctions. I then asked Namejet to replace this “feature” because using a phantom bidder was not proper auction reserve handling. My support ticket lasted more than a month as I explained that no serious auction houses are handling reserves like this. I gave them them a couple of examples of other auction systems. They explained to me exactly how this worked and why it worked that way. I gave them them a couple of examples of other auction systems. Their system was using this strange procedure due to system limitations. Namejet was not designed to auction off domains with reserves that are privately owned. They acknowledged that this is not how reserves are handled by other auction houses:
I did receive a response from our internal management. This subject was discussed at length. The auction process is affected by the features of the automated reserve bid amounts. Domains with reserves are privately owned. When a reserve is created by the domain owner, it represents the minimum amount that the owner is willing to accept, The automated feature of the reserve amount causes the reserve to act is if it were another bidder, until it reaches it’s reserve. All bids prior to that point are ineffective.
Once the reserve is reached, all standard increments will apply as other bidders participate and the automated reserve is inactive. Prior to this point, because of the NameJet Reserve process, you are only entering every other bid. Since your proxy bid is not valid until it has met or exceeded the reserve amount, the apparent increase will always be your largest proxy bid plus the increment ($10 in your example) until the reserve has been met. This is a function of resolving the difference between your maximum bid and the minimum reserve amount. I know that some reserve processes are passive and they are not implemented in the same way, however, the NameJet Reserve increment no longer applies once the bids are active and valid. Prior to this point the proxy bids are not acceptable.
Namejet was setting the reserve price $10 less than the actual reserve in order to allow the real bidder to make a higher bid that the “Namejet Reserve” bidder and reach the actual reserve price:
When the NameJet reserve is established, it is set below the actual expected price that the owner is trying to get for the domain, by the amount of the increment. In your example if the reserve is set to $100, but this would be for the case for the customer who is actually trying to get $110 for the domain. This was initially due to a system limitation, because the reserve is implemented as an actual bidder.
Finally they told me that they were working on producing a revised reserve system:
I have been told that we are in the process of implementing a revision to our reserve system that will be deployed by the end of the year and possibly sooner, The new implementation of the reserve system will notify the user that their bid has not yet met the minimum reserve amount.
The new reserve system is now live and working as it should. The “Namejet Reserve” bidder is now gone. The highest bid displays an R next to it indicating that the reserve is not met:
The highest bidder is now always a real bidder. If the reserve is not reached then the domain is not sold.
It is nice when a company really listens to problems and reacts effectively and reliably.