I have been in a negotiation with a buyer, and it seems like we are close to an agreement on a domain name sale. The domain name is priced at $4,999, and I sent the buyer a GoDaddy checkout link to help expedite the sale. That’s where we ran into a payment snafu.
The buyer needs additional levels of authorization to approve a purchase above $5,000. With GoDaddy and its checkout link, the $21.99 domain name renewal is tacked on to the $4,999 purchase price, bringing the total amount over the $5,000 level. After a phone conversation, I understood the buyer could seek that approval, which would take an unknown amount of time, or the price could be modified. I opted to reduce the purchase price to get beneath the threshold.
Someone might suggest that Escrow.com could have been a better option to avoid this issue. I disagree. When doing deals with Escrow.com, I almost always split the escrow fee with the buyer. This, too, would have taken the total purchase price above the $5,000 amount. This is in addition to the personal KYC process the employee would have to undertake to acquire the domain name on behalf of the company.
I would bet other companies and organizations have limitations like this. The approval process could go unseen to investors who rely on inbound deals, and prospective buyers may look at other domain names to buy if the total price goes over that $5k threshold. It could be a source of lost deals that aren’t heard about.
I don’t think I’ve heard about this issue before, but I bet there have been other deals lost because of it. Charm pricing is a marketing tactic, but if there are fees added onto the purchase price, it might cause the domain name to become just out of reach.

I’d like GoDaddy to explain why it tacks on a renewal for these checkout link purchases. I imagine there’s some technical reason, such as getting a registration in its system for when it renews. But given the headaches it causes, I’d really appreciate an explanation.
My guess it is because some non .com domain names have exorbitant renewal fees or some people price their domain names so low, the renewal cost would eat too much into GoDaddy’s commission.
I would love to hear their rationale though, but I doubt they will give it.
I don’t think a renewal cost eats into their commission. They’d just charge it when it renews. Perhaps it has something to do with transfers.
It comes down to buyer experience; ensuring the domain name always has at least one year of registration, and will not expire post-purchase.
Elliot – your use case is interesting and I’ve made sure the right folks are aware, but ultimately it’s a better experience for buyers in general to have a renewal, than not.
Perhaps at a certain price point for .com domain names, GoDaddy just eats that fee and takes it from their commission. Even a marginal lift in STR for doing that would likely net GoDaddy more money and customers.
There’s an easy solution to this: when in checkout, display the domain’s expiry date WITH A PROMINENT WARNING and it’s renewal cost at Godaddy, and then provide an OPTIONAL renewal add on. Let buyers choose for themselves, and make them aware they MUST log in and renew soon after purchase otherwise their domain will expire.
setting asside the renewal fee,…..and whoever pays the transasaction fees in the godaddy link……
on a $4999 strike price for a domain escrow.com charges $130 if a wire is used and $280 id a credit card is used..
What does godaddy charge in a similar $4999 transaction.
that should set the stage for comparison
$4888?
I just lowered a bunch to $4,975.
I think this is an isolated issue, but even losing one $5k sale would be regrettable.