"Abuse" does not necessarily have to be if a client legitimately wants to cancel after we have registered a domain for them for one reason or another. Look at the other side of the coin where a customer signs up today, registers 5 domains with us, then decides now that they have their domains all registered, they are going to cancel and keep the domains.
We do have a policy in place where the cost of the domains is then reduced from the refund given to the customer (it's in the TOS as you mentioned Jason, and only fair as you can agree). Now we've taken $8.88 per domain out of their refund (times 5?)
What happens now when the customer decides they are not happy with this policy despite agreeing to it at signup?
They do a chargeback, which compared to the overall cost of a budget hosting plan, is a large expense that cannot be recouped.
Maybe I'm getting off topic. It is an available, free service that we have to add value to our already great prices and service. I think the terms of this work out for the customers getting free domain names (1 immediately), and allow us to continue to provide it as a free value added item.
Wayne Reavill
WebHostingBuzz CIO