Do Not Chargeback Your Credit Card at Godaddy or They Will Take Your Domain and Keep It for Two Years

Jan 18 2011

Nobody likes charge backs, especially Godaddy.  I am going to preface this story by saying Godaddy has been very good to me.  I have 90% of my domains there because the service and backend of the site is a perfect fit for me. They personally called me a few weeks ago and extended me services and rates normally reserved for people with more domains and spend more money.  Having the privilege of being in the “Executive Club” means an almost 0 % chance of having your domain being stolen, the lowest rates on renewals and registers, and a personal account rep to answer all your questions.  The only thing it can’t do save you from making the mistake of a credit card charge back and losing your domain.

The story goes like this.  I bought my brother a domain for his birthday a few years back, his name.  He set up an account with the domain at Godaddy and set up a site.  As we all know, the default at Godaddy is auto renew.  A few weeks ago his domain auto renewed.  His wife, like all wives, calls him and asked what the charges on the credit card bills were for.  My brother is not a domainer, he only has a few personal domains in his account.  He tells her that he hasn’t purchased anything at Godaddy lately not realizing he had just had a renewal.  You may say why didn’t he get an email saying he had been charged?  Again, he’s not like you and I, he doesn’t check email every day and his ears don’t perk up when he sees emails from Godaddy and the words renewal in an email. He didn’t see it.

I don’t think the name would have actually expired because he said he had it on his calendar to remind him but as we know, Godaddy renews early.  So the chargeback happens and Godaddy retaliates.  Businesses hate chargebacks.  I know why.  It screws up accounting.  There’s paperwork.  It’s just a pain in the ass.  So how does Godaddy make up for the problem?  They take away the domain.  Not when it expires but right then.  When it comes time to renew, my brother checks his account and noticed the domain is gone.  When he puts all the pieces of the puzzle together he makes the call to Godaddy and asks what he needs to do.  They tell them that they now own it unless….he pays them $50 for the chargeback.  He admits it’s his problem and is willing to pay some fee but thinks it’s way too high and just says forget it “I’ll wait for it to drop, nobody wants to own my name”  That’s when the rep lets him know that Godaddy has renewed it for TWO YEARS and will just hold it.   A little bit of a FU to the chargeback guy.

My brother is furious.  He calls me to respond to my previous phone calls of saying how good Godaddy has been to me with a “Well they sure hate me”.  I told him I would give a call to my rep and see if I can do anything.  My rep wasn’t in so I talked to another rep that pretty much said there was absolutely nothing he could do.  When it comes to chargebacks, Godaddy doesn’t make any exceptions.  Not in these exact words he generally tells me they are are a pain in the butt to deal with and charge accordingly, no exceptions.

So here I am, a businessman in the middle.  I understand Bob Parsons financial side and I understand my brother’s, but I am going to say this. IT IS CONFLICT OF INTEREST FOR A REGISTRAR TO OWN A DOMAIN PORTFOLIO.  It puts them in a place of competition with it’s customers and takes away trust. It give the feeling that they are competing against you in acquiring domains.  I even understand renewing the domains and auctioning then off.  Why let some fast triggered company get them and resell them?  But why two years.  If a domain doesn’t sell at auction it needs to be dropped.  Holding them after no interest is shown in a domain puts them into domain investor mode.  It is plain wrong. I will speak to Bob Parsons (if he give me the chance) about this matter, but this needs to be addressed.

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Outsmarting the Dumb, Outworking the Smart

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24 comments

  1. Rick Schwartz

    “IT IS CONFLICT OF INTEREST FOR A REGISTRAR TO OWN A DOMAIN PORTFOLIO”

    Welcome to the Choir. 😉

    Just another thing domainers “Allowed” their business partners to get away with. Now it is too late and this is the kind of stuff to look out for. Some will look for ANY loophole to seize YOUR assets.

  2. Joey Starkey

    I have a love hate relationship with GoDaddy.

    Although I have most of my domains there just because they are so well known most end users trust them. But they are getting harder and harder to deal with.

    I don’t see ever being able to totally drop them but I do have a plan B it if becomes necessary.

  3. You Know Me

    Add to the sh*t list of them blocking the Whois info. from others like DomainTools.com and they are starting to get me angry.

    Is every company in the domain biz a scumball now ? It used to be most of them, but now it’s all I think.


    1. Post author
      ShaneCultra

      Kevin,

      That wasn’t the point (although it would make me look cool in the eyes of my little bro) but rather to be a voice that probably represents a lot of customers. I called Godaddy and gave them first shot at fixing it but they said their hands were tied. Now that people actually read this blog I try and discuss things BEFORE I post them on the blog (Rob Monster taught me this after I blasted Epik before talking to him, lesson learned) Godaddy has an issue that needs to be addressed. If it needs to be done in a public forum to get attention then this is as good as any.

  4. Nadia

    That’s a horrible policy. I also learned yesterday that if you do a chargeback on any marketplace items, your auction account gets banned. It didn’t happen to me, but I called my rep because there was a name I’d ended up with (that’s I’d bought on impulse while sleep deprived) that was a TM. I figured I was stuck with it, but called just to check, and he warned me that “if you chargeback anything, your Auctions account gets BANNED, and we don’t want that to happen.” Yeah. Well, it still seems a bit excessive.

    I hope your brother gets his name back. I don’t like the idea of registrars hoarding names.

  5. Dr. Richard

    Godaddy is the first registrar I used and I like it.

    But in this case, I would say that Godaddy acted in unethical or illegal manner.

    Go get your domain.

  6. nancy

    very unfortunate situation that companies have to take a tough stand like this. I understand the chargeback policy. I even understand charging a fee if you want to get back in good standing. Almost like if you let the domain go into expiration and want to get it back in the redemption period (which if i understand correctly, this domain was still active when this all took place) I don’t understand the seizing/freezing of the domain for 2 years.
    I’m sorry about the problem you’re having and I sincerely hope you get it sorted out, but I seriously doubt they’ll make an exception. Especially in such a public way. It will no longer be the exception, they’ll have to make it a rule. Just my opinion.

  7. SWH

    In the name of full disclosure, I am a Go Daddy customer and overall like the company — knock on wood I haven’t had any problems so far in almost two years.

    Please consider the businesses perspective in this matter when their customer requests a charge back with the credit card company…

    1) The full amount charged is removed from the companies bank account IMMEDIATELY without contacting them first.
    2) The company is typically charge $35+ for “charge back processing” by their merchant services account. Non-refundable.
    3) The company is mailed (by USPS) a letter that tells them about the charge back and they are typically given 7 to 14 days to dispute it. The time it takes to reach you in the mail chews up some of that response time.
    4) The company has to research and provide written documentation of the customers transaction, tracking information, delivery confirmations, etc… then fax all the documentation to the charge back processing center.
    5) There is also a potential of being dropped by their merchant account provider due to them being too risky.

    What was the minimum this charge back cost Go Daddy?
    $11 (rounded up) for the renewal fee + $35 charge back fee = $46

    The $50 fee to get the domain back seems reasonable to me since you aren’t even factoring in the man-hours needed to deal with a charge back.

    As for holding the domain until the fees are paid, this seems reasonable and here is why… The domain is collateral and the person who issued the charge back could have handled it properly from the beginning. If this were a subscription service you charged back, would they still allow you to login and access the service? In my opinion the business should not have to eat the costs they did not incur, unless their policy is to always make the customer happy with no questions asked, even if they cost the business money.

    What really irritates me about the card holder and the credit card companies is the fact that the card holder is required to contact the company who charged their card erroneously to attempt to come to a satisfactory resolution (the phone number is on the credit card statement). The credit card charge back department is supposed to have the card holder confirm that they did in fact try to come to a resolution with the company before requesting a charge back. Unfortunately the card holders typically lie or the credit card representative doesn’t bother to ask. Believe me, I have not had one charge back where the customer actually tried calling or emailing us first. But the charge back paperwork clearly has a check in the box next to “The card holder has attempted to contact the company to work out a resolution, without success” (that’s not verbatim, but close enough).

    I’m fairly confident your sister-in-law didn’t even attempt to call Go Daddy to determine why the charge was made, otherwise the issue would have been cleared up in a matter of minutes since the domain name was her husbands actual name. Instead she jumped on the phone with the credit card company, probably waited on hold for 10 minutes, and demanded the charge back.

    In 2.5 years my e-commerce business has had 5 charge backs, 2 were blatant fraud and the other 3 would have received full-refunds if they would have called or emailed letting us know there was a problem. The consumer needs to be responsible for their actions — and yes, this will sometimes cost them.

    Just my 2-cents.


    1. Post author
      ShaneCultra

      @swh

      Excellent points, well said. As a retail shop owner I know the chargeback costs and time consumed. I even understand holding the domain a year to make sure people don’t chargeback every time the auto renew and then just pick up the domain after expire. But two years? That’s building a portfolio. As for the chargeback. It was was a mistake and it were me I would have just paid the $50 as it was my fault but it was the scenario if he didn’t that I did appreciate. My brother has an easy way to get his name back. Pay $50

  8. Lee h.

    The reason for two years is he probsbly bought it originally for two years, it auto renewed for two years, he charged it back, godaddy repoed ure bros domain because theyre already out the 2 yrs of reg. Your bros fault I gotta say. Had he callef their billing when it billed he could have cxled the domain and got a full refund. Hes an ass and called his bank to do a chargeback on something he agreed to pay. I hate to say but ure bro is the deadbeat in this situation.

  9. Domaininator

    What I don’t understand is that you originally paid for the domain for a certain period of time. If they took the domain before the expiry date, then aren’t they in breach of service?

    MikeZ

  10. Steve C2

    Go Daddy… cool name. Peel that off and look at how they do business. No way for me to get involved in that. PLus Resistrars should NOT have domain portfolios and I won’t do business with one that does it like Go Daddy.

    However, Chargebacks are NOT for dsiputing a transaction. If his wife had followed her bank card agreement and contacted GoDaddy first to try to resolve the issue there would not be a problem. Instead she misused the chargeback procedure. Like a lot of people she perceived it as ‘someone elses’s problem’ and sent a big bad chargeback to them.

    I have had so many people use chargebacks for the customer service process that I have a policy that I charge an extra 50.00 if you start a chargeback that you loose without contacting us first. I have turned the people who want to ‘stick it to me’ as a profit center.

    A chargeback costs a merchant at least 100.00 to process over 60 days. I am sure Go Daddy gort tired of that a long time ago.

    People, read your agreement with your bank. Chargebacks are to be used only if the customer service process fails.

    GoDaddy bad, chargeback bad too.

    And no,

  11. Carmen

    Shane –

    Your quote: “It gives the feeling that they are competing against you in acquiring domains.”

    It’s not a feeling, it’s a certainty. GoDaddy “stole” valuable domains from my shopping cart when it accidentally expired. Estimated total cost of these domains was over $20,000. I heard about similar cases from other domainers, too. It is a common knowledge. I no longer search for domains on their website, but use other registars.

    A lot of good things can be said about GoDaddy, no doubt about it. But you cannot trust them with this one thing.

    Thanks so much for writing about it; I thought somebody should!

    Carmen

  12. Ray

    I always turn off auto renew on all my domains. I do not see the need for it. You do not have to worry about losing your domain if you turn off auto renew. They will send you reminders that it is time to renew.

    I guess if everyone turned off auto renew problems like this could be avoided.

  13. worker bee

    I work at GoDaddy, and I can tell you that when there’s a chargeback, the merchant services company charges GoDaddy a fee. That means, not only do we lose the money for the domain we already paid to ICANN, we also have to pay a fee.

    The domains are used in training of new employees usually and as I’ve seen, they are mostly garbage domains. GoDaddy will happily give up the domains if the fees and their losses are covered. GoDaddy needs to train employees on everything web – including DNS and domain management. These “reposessed” domains are perfect for this because they are least likely to be seen as squatted on or as GoDaddy having a portfolio. I mean, the owner made it clear they didn’t want them by doing a chargeback. Your situation is rare, but reversible. Hopefully you can understand GoDaddy’s position on this.

    99% of the time when I read complaints like this about GoDaddy, there’s either a reasonable explanation or a solution/fix I would be able to provide if you called in to talk to me (rather than just jumping straight to chargeback – especially when our refund policies are pretty relaxed). I may be drinking the company kool-aid, but this is a rad company to work for and as a customer for 8 years, I’ve never had customer service as good from ANY company I’ve ever dealt with (except maybe Zappos).

  14. Masrur

    Nice story… so that’s why i never put my domains on “auto renewal” mode even sometimes I failed to do it..hehe..

    Yesterday, i got mail about auto renewal fee for website tonight services. I missed it since it bundled with cheap domain registration promotion.

    But, I don’t have any brave to chargebacks since there are many domain names in my account. I don’t want to play a game with chargebacks. 😀

  15. Chris Nielsen

    I am not a fan of Godaddy. They only seeem to be interested in how much money you can provide to them, but I will say their customer support is generally very good.

    In this case, the fee they are asking for does not seem excessive and I appreciate the detaiiled estimate given above. But the 2-year holding of the domain seems like a lie. The first year was a ready paid for, so why should they drop the domain when they can try to sell it? But they would have renew it for a second year and while their cost is not great, it seems like a gamble that it will sell the second year if it does not sell in the first. And if reps are lying to customes, then a boycott should be declaired (like I said, I don’t like Godaddy and would not miss them if they went away. I know others look forward the whole year for their SB commercials, but I am not impressed.).

    If my advice had been asked, I would have advised paying the $50 (Cheap in my opinioin to recover from your own mistake), and then move away from Godaddy to another registrar that will value your business just a little bit more and may realize there are other choices for domain registrars.

  16. Most Expensive Domain

    I like Godaddy and like you I have 99% of my domains with them. I don’t have a backup plan as I never see a need for one. However, this does scare me since I have a ton of domains.

    Why would Godaddy registered your bro’s domain for 2 years is not only unethical but should be a conflict of interest and therefore illegal.

  17. Johnny Chase

    Sorry, but your brother fucked up.

    Suck it up, chalk it up to a learning experience and pay the fee.

    Imagine the thousands of clowns like your brother that GoDaddy has to subsequently explain to the appropriate banks/credit networks . I’ve been in the same position for a fortune 500 co and the conference calls are never pretty.

    You refer to your domains as investments. Your house is an investment, I’m sure your brother doesn’t pay as lax attention to his mortgage repayments? His wife told him it was a GoDaddy charge, why did he not log on and check his account?

    GoDaddy may have some slightly questionable practices, but they’re all what you agree to every time you register or renew a domain with them. I’ve waited 3, 4, 5 years for expired domains to drop with another registrar. Sucks, but it’s life. You’re playing by their rules.

    As for them holding a portfolio, off the top of my head I can’t think of a business that doesn’t ‘eat its own cake’ in some form or another, so why should GoDaddy be any different?


    1. Post author
      ShaneCultra

      @Johnny,

      You are right AND you’re a douche. Not everyone looks at domains the same as we do. Most people don’t even know how to change DNS. Things that seem basic and simple to you and I, aren’t quite as easy to others. Get out of your little box and realize that the entire world isn’t seen through your eyes. That being said, sure he should have just paid the $50.

  18. Jason

    Your brother made the mistake. Just like many others that fail to renew names far more valuable. Now the domain is like most presents people receive – forgetable. If he didn’t pay a small $50 fee, then he doesn’t value his name enough to own it.

    I don’t think this article will be enough to change public opinion. Im sure you wrote it to warn others. 100% of all my names are at GD. I prefer to use them over any other. It’s more like a lesson to teach another to be more alert.

    I once made a mistake not checking a price ahead of time before listing a domain in NYC. The buyer ended up going right to Sedo to purchase it at the fixed price. I lost out, but learned. I’m luck I used a fixed price instead of a make offer, or I would have to pay high commission on a small sale.

    I’m sure your brother will get his domain back. Did you only register the a domain for one year? I would have done 5 years. In any case, thanks for the article.

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