"Domain tasting" refers to the practice of registering a domain name and taking advantage of the 5-day Add Grace Period (AGP), which is activated upon registration, for the purpose of assessing the profitability of said domain. The full price of the domain remains completely refundable until the AGP expires, at which point the registrant becomes the owner of the domain. During the AGP, a full cost-benefit analysis is performed to determine whether reasonable profits can be generated via the placement of advertisements on the domain's website.
Domains that are considered to be profitable are retained by the registrant and those that are not considered to be profitable are deleted prior to expiry of the AGP.
In an attempt to curb abuse by domain name registrants, ICANN has taken steps to remove any potential financial incentives that would otherwise encourage the practice of domain tasting. Specifically, the ICANN Operating Plan and Budget Provision for Fiscal Year 2009 initially specified that a set transaction fee (US $0.20) would be levied against domains which are deleted during the AGP. This fee will be applied where the number of deleted domains represents 10% of the net new registrations for that registrar in any particular month OR where the number of domains deleted in one month by a single registrar exceeds 50.
The AGP Limits Policy is subject to the same thresholds as the Budget Provision, but imposes a much higher cost for each deletion that occurs during the AGP. Under this policy, a minimum cost of $6.75/deletion during the AGP (cost of registering a .org domain) is applied to each transaction in an effort to stem the practice of domain tasting. Since the introduction of these transaction fees for domains deleted during the AGP, incidents of domain tasting have significantly decreased from a reported 15 million domain names in a peak month (prior to the introduction of transaction fees) to below 60 thousand per month.
From the domain taster's perspective, it is obvious why the 5-day AGP is an attractive and highly desirable option when registering domain names for the sole purpose of generating advertisement-based profits. However, the negative consequences of domain tasting can have a prolific effect on society in various ways. For example, upon attempting to re-register their chosen domain, users who accidentally allow their domains to lapse will likely encounter great difficulty in doing so, as they will likely find that it has been caught in a vicious cycle of registration and deletion by automated systems. Similarly, a lack of control on domain tasting leads to an increase in the number of websites that consist only of advertisements.