Domain kiting/tasting is something that has garnered a lot of controversy. Stated simply, it’s where someone buys a domain, puts advertising on it, sees if it gets enough traffic to justify the cost of the domain over a year by taking advantage of a 5 day domain “return” policy.
ICANN has been looking at this for such a long time with the intent of creating a policy for stopping it. Why? They must not realize that a single tool they already have in the uniform agreements that ICANN has with each registrar is plenty – they just don’t enforce it. An excerpt from the RAA, the document required to work with different registries to sell domains.
3.7.4 Registrar shall not activate any Registered Name unless and until it is satisfied that it has received a reasonable assurance of payment of its registration fee. For this purpose, a charge to a credit card, general commercial terms extended to creditworthy customers, or other mechanism providing a similar level of assurance of payment shall be sufficient, provided that the obligation to pay becomes final and non-revocable by the Registered Name Holder upon activation of the registration.
It’s amazing how many times that has been cited recently and I can only imagine that a provision like 3.7.4 allowed the justification for the 5 day grace fee. Today with domains at $6.42, the price of a domain is so little that it just takes a few clicks in that 5 day window to be profitable.
If you think about domains compared to real estate, it is still interesting how domains have fixed costs even though names like ibm.com, apple.com, or business.com are worth so much more than kiafskehkboiqvoqbftxoxva.com.
You want to know how to stop it as a registrar? Do not allow refunds for registration. Our refund policy forbids it so we do not encourage domain tasting/kiting.
If ICANN actually enforced that provision by threatening de-accreditation to those registrars, kiting would just go away.