GoDaddy Makes Another Payout Change

Now that April Fool’s Day has passed, I will skip to the end – this was an April Fool’s Day joke.

Following its payout policy change involving LTO deals at Dan.com and Afternic, GoDaddy is making another change to LTO payments.

First, some background. From inception at Dan.com, if a lease to own deal was started on the 2nd of the month, subsequent payouts would be made to sellers on the 2nd or 3rd of each month during the lease term. Once the money from the buyer was received, it was sent to the seller like clockwork. Following the payout change, payment plan distributions were moved to the 7th, 14th, 21st, or 28th of each month. If a payment plan was started on the 2nd of the month, subsequent payments would be sent days later on the 7th. If made on the 7th, payment would be sent on the 14th.

This change was frustrating to domain name sellers, particularly because buyers and sellers were already locked into deals and nothing could be done to revert back to how it was originally. In addition, the announcement was unclear and buried in a long product update. From what I understand, GoDaddy heard domain investor feedback, and today’s change was made to improve the seller experience.

To avoid the inconvenience of having 4 payout dates a month, GoDaddy will be issuing one payout per month to customers.

Starting today, April 1st, the single payout date will be made on the 31st of each month. No matter what day of the month the LTO payment is made by the buyer, the payout to the seller will be made on the 31st. If the month does not have 31 days, like the month of April, the payout will be pushed to the following month with 31 days. So, for example, if you have a LTO deal that started on March 1, the first payout will be sent on March 31 and the second monthly payout will be sent on May 31.

This may seem a bit confusing to you, but it’s actually not as confusing as all of those LTO payout emails I receive on the 7th, 14th, 21st, and 28th. These emails are in addition to the corresponding PayPal payment emails that are also sent when the monthly payments aren’t sent via wire transfer.

As Billy Mays famously said, “But wait… there’s more!”

In addition to the payout change for LTO deals, all Afternic and Dan.com sales will also be paid once monthly on the 31st. No matter what day you sell a domain name across the GoDaddy network, the payout will be sent to you on the 31st.

As with the LTO change, if you sell a domain name at Dan.com or Afternic in a month with 30 days, your payout will be sent on the 31st of the following month. For instance, if you sell a domain name via Afternic today (April 1st), you will be paid out on May 31.

This will unburden the inboxes of domain investors with many active LTO and standard deals at Dan and Afternic. I was told this payout change will have absolutely no impact on 99.5% of the people who read this article.

I am told that the idea behind these changes is to help reduce the amount of time and effort domain investors spend reviewing emails and tracking multiple payouts each month. It is definitely NOT related to accruing interest on these funds.

Payouts will be batched together, so in another bit of good news, instead of charging sellers a $.75 transaction fee per sale, there will only be one $.75 fee levied no matter how many domain names you sell the prior month. That’s a win in my book.

If you’re a GoDaddy stockholder, you may be worried about the negative impact on the “nickel and diming” line item on the corporate financial statement. I would imagine the interest earned on cash in the bank will counterbalance this lost income.

There is one more aspect of today’s news that makes things a bit more complicated – what happens when a payout date falls on a US federal holiday or on a holiday in a location where GoDaddy has an office. Today is the US holiday of April Fools Day. If today were a payout day, it would be shifted by a month.

If GoDaddy has an office in a state that observes its own local holidays, the same rule would apply. For instance, we celebrate Patriot’s Day in Massachusetts on April 15th. This could have been an issue, but I understand GoDaddy has been closing some of its local offices, including the one in Cambridge, Massachusetts.

Commenting on the change, a representative sent me the following statement:

Moving forward, our team has reviewed
Operational efficiencies. We are embarking upon a
New payout schedule. This change, we’re making
Offers more consistency for clients who use our
Platform for selling domain names.
Our aim today is to be transparent. 
LTO and sale payouts will be consistent and predictable,
Yielding benefits for our customers.

If you haven’t figured it out yet, this is an April Fool’s Day satirical post. I do not expect GoDaddy to change its payout policy again (*unless interest rates rise substantially – maybe).