SnapNames auction refunds: Rare glitch or protectionism towards private domain sellers?

SnapNames is the sister company of NameJet; both marketplaces share the same domain inventory and even use the same front-end interface.

In recent weeks, a series of domain auctions ended up being reversed, after the winners paid for the domain names.

To each individual auction winner, SnapNames support claimed that each reversal incident was rare and isolated. We have identified at least 4 such cases for a minimum of 12 domain auctions.

All auction winners experienced the following type of actions from SnapNames:

  • A congratulatory email informing them of winning the domain auction and upcoming processing of its cost.
  • An email within 24 hours that their account was charged for the cost of the auction, stating that ownership transfer had commenced. That email promised the delivery of additional information within 72 hours.

No domains were delivered within that timeframe and no notifications were sent voluntarily by SnapNames. The auction winners that contacted support received the following type of responses:

 I am sorry for the delay. The [domain] has a delay with processing. It is pending to be placed into an account for you with Network Solutions as the Registrar.   Processing is aware and is working on it. 

Further down the road, auction winners might have received this type of response, when inquiring about an update:

We are aware this escalation is taking longer than expected. Our processing and engineering teams are working to get the domain migrated. We value your patience. We will follow up as soon as the domain is accessible.

Eventually, an email would arrive notifying the auction winner of a failure to fulfill domain purchases, noting that this happens in “rare cases.”

Apparently, the alleged rarity of this incident was repeated across 12 domain auctions at a minimum, most of which closed on January 23rd while others closed in February.

These auctions had a few other things in common: they were listings provided by private sellers.

One of the domains was listed by its auction-starter at NamePros, which indicates that the seller knowingly and with the approval of SnapNames initiated the auction. In that case, SnapNames claimed that the domain changed registrants in September of last year, which we find very hard to believe.

In another case the domain was won for $70 dollars after beating the opening listing of $69 dollars set by SnapNames; that domain was listed for sale at the time with a $9,599 dollar price tag on GoDaddy and Sedo.

According to another bidder, SnapNames must have screwed up or forgot to use reserve prices, as he won some pretty good deals with no reserve. The closing prices ranged from $69 to $232 dollars. That price range indicates that there were several bidders in these auctions, none of which would receive the domain eventually, even if they bid up.

One final auction winner adds more speculation to this reversal case by SnapNames:

“I believe I had backordered the name then lost the backorder/expired auction a month or so previous then saw it was being auctioned again and had another go assuming they had a non payer. The name ended cheaper than the original auction.”

This last part indicates that SnapNames reversed and refunded auctions when the seller’s expected prices were not met. Instead of setting a reserve price, or due to not setting a reserve price, these auctions were canceled and any payments made were refunded.

What cannot be refunded is the time spent by domain investors to locate domains worth bidding on and the time spent on active bids as some of the bidders were in different time zones around the world, along with the time spent engaging with less-than-stellar support at SnapNames.

Lastly, what cannot be refunded is the feeling that a popular auction platform like SnapNames has lost its integrity.

The names of the bidders and the respective domains they won are in our possession; meanwhile, some of the sellers appear to have been long term customers of NameJet/SnapNames. It’s imperative that SnapNames addresses this issue immediately and fully.

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