Entrepreneurs have been taking advantage of a five-day grace period to sample millions of domain names, keeping the relative few that might generate advertising revenues and dropping the rest before paying, contributing to a global shortage in good domain names. The practise has been compared to buying clothes on a charge card only to return them for a refund after wearing them to a big party.

The grace period was originally brought in to rectify legitimate mistakes, such as registrants mistyping the domain name they are about to buy. But entrepreneurs have turned the return policy into a loophole for generating big bucks assisted by computer automation and a burgeoning online advertising market.Experts also believe spammers and scam artists are starting to use the grace period as a source of free, disposable Web addresses.

With up to six million names tied up at any given time through a practice known as domain-name tasting, individuals and businesses are having even greater difficulty finding good names, particularly in the already-crowded dot-com space.

"The system really doesn't work to the advantage of people who have legitimate reasons for wanting names," said Frederick Felman, chief marketing officer with MarkMonitor, a brand-protection firm. "It allows people with criminal or speculative intent to dominate." he says, referring to such practices as Cybersquatting, which has been around for more than a decade, where scores of entrepreneurs have made thousands and even millions of dollars reselling names they had bought for as little as $6 each. With tasting however, entrepreneurs are interested in generating traffic and share in online advertising revenues as opposed to just grabbing names to resell.

The Internet's key oversight agency for Domain Names, the Internet Corporation for Assigned Names and Numbers (ICANN), has for years required operators of major Web suffixes like ".com" to refund cancellations within five days. Tasting has become more practical over the last couple of years due to improved automation allowing newly available dot-com names to go live almost immediately, giving an additional half-day for sampling.

According to data from Name Intelligence, which analyzes domain name patterns the practice has spiked, with an average tasting of 1.2 million names each day in December, compared with 7,200 two years earlier. Legitimate registrations made up just 2% of the registrations at the end of 2006, which is down from about half in 2004.

Wang Lee Domains, a company that does engage in tasting has stated the practice was "perfectly legal" and brings "customers to the companies that advertise." Moniker Online Services, which lets customers try out domains for a small service charge it keeps, commended the practice saying companies can identify the right names to buy and not overspend for ones that do not matter. Monte Cahn, Moniker's founder and chief executive, has claimed many leading brands do it, although he would not name them.

"Tasting is similar to test driving a car before you buy it or doing a walkthrough of a house before you buy," Cahn said.

The practice of tasting exploits the loophole in the following way: Software is created to automatically register hundreds or thousands of names. Some are variants of trademarks or generic keywords that Internet users are likely to type — or mistype. Names are also grabbed after their original owners fail to renew. During the grace period, the entrepreneur puts up a Web page featuring keyword search ads and receives a commission on each ad clicked. Services such as Google's AdSense for Domains and Yahoo's Domain Match allow large Domain Name owners set them up, despite the search companies official stance being opposed to abuses in tasting. Those addresses likely to generate more than the $6 annual cost of a domain name are kept — which is a low threshold given how lucrative search advertising is these days, with the rest thrown back into the pool on the fourth or fifth day, where typically they are grabbed by another group of domain name tasters.

"Everyone's trash is someone else's gold," said Jay Westerdal, president of Name Intelligence. "You'll see this with three or four companies that keep going through the trash of everybody else. And because the process is automated — the names are grabbed as soon as they are let go — legitimate registrants barely have a chance", Westerdal said.

The department store chain Neiman Marcus Group last year accused the Domain Name Registration company Dotster of tasting hundreds of names meant to lure Internet users who mistype Web addresses, filing a federal lawsuit. The misspelled NeimuMarcus.com at one point featured ads for Target, Nordstrom and other rivals. David Steele, an attorney representing the retailer, pointed out that Neiman Marcus could have placed ads on those sites as well. The question being, should Neiman Marcus have to pay for directing people back to their Web site? Steele said his law firm, Christie, Parker & Hale, also was preparing litigation against other tasters. Operators of the ".org" database have tried to retaliate, winning approval in November to charge a restocking fee. VeriSign however, which runs .com and .net, has not publicly backed one. The oversight agency ICANN said it was still looking at the extent of the problem.

Critics of the system say VeriSign and ICANN both benefit from the thousands of names that are tasted and kept, collecting fees proportional to the number of names sold. VeriSign said decisions should follow community-wide discussions.

"The risk is you don't want to necessarily move too fast or have a knee-jerk reaction without understanding the ramification," said Michael Denning, general manager with VeriSign's Digital Brand Management Services, which encourages companies to register additional domain names before tasters can get to them.

A newer variant, known as "kiting," involves the same company reregistering the same name every fourth or fifth day to hang onto it in perpetuity, without ever having to pay for it. Anti-spam experts also suggest that spammers and scam artists are turning to the loophole to register new names every couple of days to avoid detection. Steele, the Neiman Marcus lawyer, said many of the dispute-resolution rules written for the pretasting days were no longer effective.