Do the right thing when you buy an expired domain that was accidentally dropped

panic

Most of the domain names that I buy as investments are expired domain names. This is where I’ve made the bulk of my money flipping domains and I still buy expired domain names all the time. 99% of the time these are domains that nobody is using and they just let drop, and back onto the market they come. A few times I have received a panicked email from someone that goes something like this:

“I just noticed that xxxxxxx.com was not longer in my account, I have had this domain name for years and it means a lot to me. I’m not sure how you ended-up with it but I really want it back. Please let me know what I can do to get it from you.”

In the last nine years that I have been buying domain names, this situation has happened three times. Every single time I have given the domain back to the person for the exact price I paid for it.

The other day a friend of mine told me a story about a domain that he accidentally let expire. He sent an email like this to the new owner who wanted thousands of dollars for the domain. He was sharp enough to look what they paid for it – $48. At the end of the day he settled on $800 and got his domain back but I cringed when I heard this story.

Karma is a real thing and I’m a big believer that you should do onto others as you would like them to do to you. I urge anyone who buys expired domains to not extort domain owners if they accidentally let it drop. It almost never happens but if it does take the high road, don’t think twice, do not pass go, be a normal human and do the right thing.

{ 20 comments… add one }

  • JZ July 18, 2016, 9:38 pm

    big users of drop services get this kind of thing on a weekly basis. its simply not good business to just hand over these domains. i wish it were that easy but its not.

    Reply
  • Joseph Peterson July 18, 2016, 11:00 pm

    It’s fine to give the domain back to the previous owner. It’s a magnanimous gesture.

    But I would definitely disagree that it’s necessarily “the right thing to do”. That implies that buyers who don’t surrender their property are in the wrong. And I hardly think that’s fair.

    Researching domains to buy, watching auctions, spending money – that’s a lot of work. If
    domainers give away the fruits of our labor whenever we’re asked to do so, then they will be easily exploited. Even if the previous owners mean well, it’s generally a case of someone who works hard and pays attention losing out for the sake of someone who’s been lazy or negligent.

    That previous owner is perhaps not the ideal person to make the most with the domain. As I see things, the goal is to place domains with the best owners. So I wouldn’t automatically concede that some previous owner has any special right to what they’ve abandoned.

    Of course, it’s easy to sympathize. I’ve lost domains through my own negligence too. But I would never expect the new owner to simply return the domain to me. I’d never have the audacity to ask.

    There are cases where I’d sell the domain back cheaply. Simply giving the domain back teaches the person nothing and undervalues both the domain and our work. There are also cases where the previous owner demands the domain back and threatens lawsuits.

    Reply
  • Ian Ingram July 19, 2016, 12:03 am

    In my experience, it’s rarely an accident that a domain drops. In order for a domain to expire and drop, generally quite a bit of human error and/or procrastination needs to happen.

    At GoDaddy for example:
    The renewal fees are not paid for whatever reason.
    Auto renew has been turned off (or auto renew is on & GoDaddy has attempted 3 times to renew it with the Credit Card on file but couldn’t for whatever reason).
    Several (7-10?) emails from GoDaddy reminding the owner that the domain is expiring or credit card has failed, etc. have been ignored.
    The domain is placed in an auction in which anyone can participate.
    The homepage of the domain indicates that it’s in auction and a direct link to the auction is also provided.
    The previous owner has 6+ weeks to check their emails, or see that their site isn’t working anymore.
    Even several days after someone else wins the auction, they can still renew the domain for a modest $80 fee.

    Unless there are really circumstances that are out of their control, if someone else has taken the time and resources to win the domain at auction, it seems they may value it more than the previous owner.

    I understand issues can happen and sometimes an offer like this could be justified, however, if it is their own fault… To put it bluntly, stupidity should not be rewarded. We are slowly becoming a society that places warning labels on hangers telling people not to eat them. Someone once said, maybe it’s time to remove the labels and let the problem sort itself out…

    Reply
  • AbdulBasit Makrani July 19, 2016, 2:31 am

    Very well said Joseph and I completely agree with you.

    Reply
  • DonnyM July 19, 2016, 2:55 am

    I would give the name back for the amount I bought it for. Now if it was 10 or 20k then that would be tricky.

    If you can see that the prior owner had owned it for years on a developed website then with out hesitation I would give it back. Keyword #Karma 🙂 It’s really not that important.

    If you found a wallet in the street with personal photos, cc and cash do you keep and say “I was in the right place at the right time” or do you track down that person and give it back.

    What this really comes down to is money$ and the felling that you can turn a $69 dollar name into $$$$$. Domainers probably feel that I have worked hard to find this name and I want my payday.
    No right or wrong answer it just says what type of person you are.

    DonnyM

    Reply
  • Joseph Peterson July 19, 2016, 4:05 am

    @DonnyM,

    This isn’t remotely similar to finding a wallet in the street and pocketing the cash. Not 1 bit.

    Buying expired domains is REALLY indistinguishable from buying repossessed homes or cars. When someone doesn’t make payments on time, they lose their property. Then that property goes to auction where people (who work quite hard at what they do) bid to purchase that property.

    Previous owners are not entitled to ask for their house back or their car back after it’s seized by the bank and sold to other people. Bidders in those auctions are honest people running a business based on reallocating abandoned assets. We are most definitely NOT stealing somebody’s lost wallet. That insinuation is actually quite offensive.

    Reply
  • Stuart Maloff July 19, 2016, 8:04 am

    Joseph, I agree that keeping a domain that was owned by someone else that you won in auction is very different than stealing one’s wallet. However, I am not sure I would go as far as comparing a repossessed home or car.
    I would say 99.9% of the time that a home or car was repossessed it was because the owner owner was unable to meet the payment due to other financial obligations. I would say with a domain name, it is the other way. 99.9% of the time they could afford the $10 renewal. It is possible it was laziness, but some times their email may have changed or they had a personal issue such as a death of a family member or a newborn which in the month of the renewal it was an overnight. Other times, the renewal emails go to spam.
    I am not saying returning it is right and keeping it is wrong or vice versa, but it is different from repossession of a home or car, as in those cases it was not an oversight, rather a lack of funds. Morgan, you are a great guy to do that, but I also understand we are in a business to make a profit and it is not really extortion if you are asking market value for a domain that is yours. Asking $10,000 for a domain you’d normally sell for $1,000 is more like extortion to me.

    Reply
    • Morgan July 19, 2016, 8:17 am

      Great comments everyone, as for the “rarity” of an accidental drop, I don’t think it’s as rare as you’d think. People change email addresses over time. If you’re a normal person who only owns a handful of domains and you change email addresses, you won’t get any of the reminder emails.

      Reply
  • Chris July 19, 2016, 9:42 am

    @Joseph
    “Buying expired domains is REALLY indistinguishable from buying repossessed homes or cars.”

    There is a difference. If you buy someone’s repossessed home or car and they come knocking and don’t like your price, they will probably find a satisfactory alternative.

    In the case of a domain, you have them over a barrel if they have already undertaken a lot of branding and development under that name.

    I don’t agree with taking advantage of this, but then I don’t agree with the whole end-user/reseller pricing distinction in the first place. Does this distinction exist in the housing/car markets? (and if it does, it might be an extra 20%, but not the 2000% or more markup that many domain sellers look for).

    Reply
  • Aaron Strong July 19, 2016, 12:48 pm

    Just do the right thing and help out the previous owner…. Do the right thing and don’t make excuses or analogies to justify……Stay true my domainer friends.

    Reply
  • DonnyM July 19, 2016, 12:57 pm

    @joseph

    Would you return wallet? remember you’re not stealing the wallet you found it.

    If not a wallet, how about a kid who lost his puppy who had no tags, would you keep the puppy because the child forgot to close the gate. You could sell the puppy for $500 and make a profit and buy two puppies.

    Buying a domain is pretty easy, it is in no way comparable to buying a repossessed home.
    What other business makes it so simple to push an online asset in 5 minutes. Takes months for repossessed home. If it was offensive to you then the puppy example should be even worse. But it was not directed towards one person. I find it all funny.

    Domaining is not like digging an ditch for 8 hours a day, that is hard work.

    Domaining is fun. It can be hard looking for a domain but in most cases the best names you will get are from a private owner and not in an auction and your not going to give a domain back you bought from a private owner.

    In the end I agree with Morgan it’s all about Karma, but if you don’t believe in Karma then take the wallet and puppy and start a new business called dogmill.com lol:)

    DonnyM
    .

    Reply
  • JZ July 19, 2016, 3:01 pm

    donnym, you clearly don’t do this for a living. as someone who scans expired lists 10 hours a day 7 days a week for almost 10 years, it is “hard” work.

    your comparisons are foolish.

    if someone can’t update their emails or simply take the time to renew a domain, its clearly not that important to them despite what they might say. i can manage to keep track of tens of thousands of domains .. the average person should be able to handle a handful.

    Reply
  • DonnyM July 19, 2016, 3:35 pm

    JZ

    The comparisons may be foolish that is for entertainment.

    I mean if your buying domain names every day for 365 days a year is giving up one name for $69 is it really going to put you out of business? It may for the other party. Karma, Karma,Karma.
    If you don’t believe in Karma, keep the name and ask 10k for it. Screw the other party.

    Yeah I do it part time but I can take 10,000 of those names in one hour, and tell in you in order which ones get type in traffic. So it is not about how many hours it’s about efficiency.

    Reply
  • Joseph Peterson July 19, 2016, 9:07 pm

    @DonnyM,

    I’m not stumbling down the street until … Oh, what’s this I tripped over? A wallet? Guess it belongs to me now! What’s this? A car with the door unlocked and the keys in the ignition? Guess I get a new Honda!

    That’s a ludicrous comparison. Of course, I’d go out of my way to return somebody’s wallet.

    When I buy domains at auction, I’m bidding on inventory that has either been voluntarily listed by a seller or which has been repossessed and no longer belongs to the previous owners at all. These aren’t stray wallets. They are 100% legitimate public auctions.

    I’m not a hobbyist dabbling in domains. This is business. This is a job. You may think it’s fun, but for me it’s tedious even arduous labor. I’m just as likely to develop back pain sitting at a computer for 12+ hours day after day as I would be digging ditches.

    If previous owners are entitled to ask for their property back after they’ve let it go, then that undermines ALL expired domain auction platforms and interferes with the business of countless people who work quite hard buying expired inventory and selling it so that it can be recycled / repurposed.

    What you’re suggesting ought to be the norm is actually a PRANK on the show “Impractical Jokers”:

    https://www.youtube.com/watch?v=QT_0sMEAcTY

    Every time something sells at auction, the previous owners stands up and says, “Wait, I changed my mind!” So the bidders all waste their time. In fact they’re all cheated, and the entire auction process breaks down.

    Reply
  • Eugene Fraxby July 19, 2016, 9:15 pm

    Not quite the same but I was the original hand registrant of a 2 word domain I really loved and I lost it because either the original domain registrar/host went bust (small company) or they purposely ignored my requests to transfer it out. I even got some business associates who were themselves hosts and they tried to intervene for me but couldn’t get it back either. The domain is now owned by a well known company that recently merged/was taken over…

    They email me periodically trying to sell me the domain for as much as $8000 since I also have the singular version (and still do). I tell them I am not paying that kind of money for something I once had in my control for less than $10 per year. I even offered to give them some good PR if they sold it back to me for whatever they paid on drop catch e.g. appear in an article/press thanking them for giving it back. But they ignore me which is disappointing.

    Reply
  • DonnyM July 20, 2016, 12:05 am

    @Joseph

    Go dig a ditch for 8 hours for 1 day and tell me that is more easy than domaining. I like domaining it is fun, digging a ditch sucks and is way harder.

    What we are talking about is maybe 1 domain out of a few hundred may ask for domain back. Not every domain name needs to be given back, so the system would not break down.

    Look at Eugene he lost his domain because he did not have control of it, not his fault, but I,m sure some people would just love to take advantage of a situation like that.

    I don’t really care but for me dude I feel better about helping someone out, that is how I grew up and that is how I do business.

    DonnyM

    Reply
  • Joseph Peterson July 20, 2016, 12:35 am

    @DonnyM,

    Let me make a logical distinction:

    (A) Giving back a domain to the previous owner is always the right thing to do, which implies that keeping the domain is always the WRONG thing to do.

    (B) Giving back a domain to the previous owner is at cost, for free, or at a discount is a generous thing to consider doing. But it’s up to the new domain owner and can be decided on a case by case basis.

    I deny (A) but affirm (B).

    Because of this, you’re implying that I’m selfish, greedy, and refuse to help people out. And I find that rather insulting.

    I work hard to acquire domains. (Believe me, the military taught me what work is.) The one person in this situation who ISN’T doing their share and ISN’T working hard is usually the former owner whose inattention / negligence / laziness caused them to lose a domain. When they demand it back for the same price I paid, they are valuing my effort and time at nothing. In general, I see no justification for humoring that behavior.

    Some of these former owners have threatened me with lawsuits right off the bat. In other cases, I’ve seen them get the domain back only to drop it yet again the next year or – what is more annoying – sell it to someone else. So I no longer feel much pity for their excuses. The best I’ll do is offer to sell at a discount but at a price that pays for my time and the lost opportunity.

    Quite often, I’ve given domains away for free. But I’m more sympathetic to people who have never owned the domain than to people whose laziness or incompetence has misused the domain already.

    Reply
  • DonnyM July 20, 2016, 1:05 pm

    @Joseph

    Of course you if you’re going to give the domain back they have to at least pay for what you bought it for. That is only fair.

    Sounds like you have been attacked by prior owners and had some bad experiences. If a prior owner demanded it back by threats then hell no are they getting it.

    Don’t get insulted, what I,m saying is not intended for you personally, but yeah I can understand why you would feel that way. You work your as*, off and sometimes you probably fell people are trying to take advantage of your hard work. I get it. Probably more people are trying to screw you over now than ever.

    Have a good Joseph

    DonnyM

    Reply
  • Joseph Peterson July 20, 2016, 1:21 pm

    @DonnyM,

    No hard feelings. Man, I could tell you stories!

    There’s 1 case of negligence and dishonesty that involves a Spanish .ORG and “Star Trek II: Wrath of Khan”. Remind me some time, and I’ll write it up.

    Reply
  • Ian Ingram July 20, 2016, 5:44 pm

    My guess is that 99% of the time a domain drops it is a direct result of the actions or inactions of the domain owner. Should people be held accountable for their actions? Of course they should. Obviously, this isn’t a cut and dry issue…

    Someone wants a domain back that they owned, it was auctioned and now you own it. What if:

    – They contacted you 3 days after the domain landed in your account? 3 months? 3 years?

    – You are already in negotiation with another party on the domain.

    – The previous owner was a competitor or the domain would really help your business.

    – You have already accepted an offer from a third party but have not started escrow yet.

    – You went back and forth with a bidder on GoDaddy and won the domain three hours later because someone kept outbidding you by $5.

    – Someone just offered you $8,000 and you are about to accept/counter their offer.

    – You paid $10, $1,000, $10,000 for the domain?

    – A friend, family member or colleague was the previous owner?

    – It was an incredible buy and you feel you will eventually make 100 or even 1000 times your money on it?

    – The person went through something like Eugene?

    – The domain isn’t great or is a clear trademark violation that you should have steered clear from?

    – A large company just announced a major product or company name change the day before the previous owner contacted you wanting it back?

    – You believed the person’s story was completely made up or they told you they weren’t going to pay the $80 redemption fee that GoDaddy wanted and they expected to just purchases it for $10 when it dropped?

    Some may give a domain back all the time, some may give a domain back none of the time but most would probably give it back some of the time.

    Being nice is fine. Being gullible is not. IMO, most of the time it is no accident that someone ignored a bunch of renewal notice emails or that their credit card is maxed out or they just didn’t know any better.

    If you are contacted by someone who says they owned the domain, maybe they do deserve some compassion, but you SHOULD realize:

    – The person contacting you may not be the person they say they are.

    – They may be lying and saying anything they can to get you to do what they want.

    – There is a fair chance that another domain investor or interested party contacted the previous owner and was trying to purchase the domain from them prior to the transfer & now they realize they dropped something with value.

    – They may have had the domain listed for sale at another marketplace and have just received an offer. Or, an offer came to them due to the Whois not being current yet.

    – They saw that the domain was purchased for $1,000 by a domain investor who is likely going to try to make a substantial profit and they have a fear of missing out on the 1k let alone much more.

    My point is, not everyone’s sob story is real. Not everyone is who they say they are. We shouldn’t coddle people. Not everyone deserves a participation trophy. If you put the work in to identify and purchase a valuable domain, treat it as such. YOU made that kill. If a sheep comes along and says “I ran out of grass or whatever…” Make sure it REALLY is a sheep. Give away too many kills and YOU will die. Give away too much of your time, YOUR BUSINESS will die. Give a domain back only to see it put up for auction immediately or dropped the next year as Joseph said… maybe you are the sheep?? 🙂

    Reply

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