[dspillett]

Originally it did, and some companies still tried the buy-from-under-and-jack-up-the-price thing on what could be valuable domains. Back then I checked the availability of a four-character (letter-letter-number-number) domain and two days later found it taken by “someone” using the same registrar I check it was free on and there was a holding page there offering it for sale at a not-insignificant cost multiplier. Luckily I had other options and just took one of those (from a different registrar). I also checked the availability of other domains on the original registrar, and encouraged others to also. We probably didn't cause enough financial disruption for someone to notice, but I liked the petty revenge anyway!

Later the 5-day grace period was added by ICANN to deal with accidental registrations, a full refund would be given if the domain was released in that time. Supposedly to protect end users against mistakes like typos and other errors, though I'm not sure why that would need five full days. This made “domain tasting” an open season and a great many registrars would do it, even registering a few times to extend the five days. Some actually did it as an advantage for the end user: they were not going to get snipped by waiting a few days and the registrar didn't jack up the price. But many were a bit more nefarious.

They later added a small processing fee to the refunds in the grace period after the first few domains per account per period (or similar) which vastly reduced this happening, so it is now pretty much a historic problem.