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Another way to word this is: is it necessary for a provider to offer service transfer?
Depending on the service and how much hours it take.
If it's something you can transfer with 2 clicks (cPanel-to-cPanel), it is usually free with most providers.
Else, where manual actions are required, a fee is ok.
It's a decent compromise allowing people to transfer services (keep a deal alive, provider customer base is net zero instead of negative), thwarting abuse (people scalping deals), and the cost of doing the transfer.
I think it is alright considering transfer fees are usually $8-15, it is $8 for Racknerd and similar for others, maybe a token-based system would be better so that users can transfer the server to another active account with some active services and limitations to transfer a service number of times in a month.
Charging a transfer fee is effective to discourage excessive scalping.
During the transfer processing, the provider has to spend effort in verifying the recipient account.
After the transfer, the provider incurs risk of the recipient account being abusive.
It is reasonable to limit how often a service may be transferred.
However, such limit shall not exceed once per billing cycle.
It is reasonable to require a renewal during transfer processing.
It is reasonable to require ID verification on both accounts.
This applies only if a privacy policy is published and provider accepts liability in case of ID theft.
It is unreasonable to void the dealz after the transfer, unless this is disclosed before processing the transfer request and charging the transfer fee.
It is unreasonable to require recipient account to have an active service or have certain age.
This applies only if a transfer fee is charged; does not apply if transfers are free.
It is unreasonable to charge transfer fee in excess of one-month price on a full-price product or in excess of one-year price on a discounted product.
For very limited Black Friday flash sale dealz (e.g. $6/year 4GB VPS), this limit may be increased to the one-month price of an equivalent full-price product.
Top providers for service transfer:
Does it take time for someone to do?
If so, charging for it is reasonable.
I'm pretty sure some providers have this in their TOS?
Anyways i think it's totally alright and acceptable. Just a little.
Typically, transferring a service should be free, as it is usually a straightforward process handled by billing software. However, in some cases, such as transferring between resellers or when there are multiple dedicated servers under one account, the provider may charge an administrative fee.
I created this post because I was asked to pay 10 USD to transfer a 14 USD annual VPS, which makes me feel it is unreasonable.
if it is a really good and rare deal, why not? :-)
Transfer fee is always flat and not directly proportional to service because it will take same effort to transfer $1 VPS vs $10 VPS.
That sounds very reasonable.