Website domain names are fairly cheap and easy to come by, allowing just about anyone with an interest to carve out their own piece of the Net. These domains must be renewed on a regular basis, however, otherwise you lose your claim to that particular address. Letting your domain expire, intentionally or not, can open you up to the dangers of identity theft or business loss.
No More Website
The most obvious consequence of letting your domain expire is that you will no longer have your website. While this may not be a big deal if you only used the domain for a hobby, it creates a much bigger problem if it was attached to your business website. Depending on your registrar -- the company you purchased your domain from -- you may have a limited period of time after the expiration date to re-register the domain. There may be additional fees attached to your renewal after it has expired, so check your registrar's terms of service or contact customer support for more information.
Lapsed domains become available for other people to purchase after a certain period of time. This could be a few weeks to a few months, depending on your registrar's terms. Once someone else has purchased your expired domain, you have no more right to it. You could theoretically take them to court to get the domain back, but this can be a costly process with unsure results.
A dangerous consequence from a lapsed domain deals with your other online accounts and personal information. If a ne'er-do-well purchases your domain name after you've let it expire, the new owner can use information from it to access other accounts online where you've used the domain's email. In other words, if you had an email address of John@ImSoAwesome.com that you've used on websites, such as Amazon or Google Apps, but let ImSoAwesome.com expire, the new owner of that domain could gain access to your other accounts. All he needs to do is create an identical email address and use the “Forgot Password” option to get in. Then he'll have access to your personal, and possibly financial, information.
If you truly want to let your domain name lapse, take a few precautions to ensure you aren't going to become a victim of identity theft later. Change the email address associated with all online accounts before your domain expires, and delete all sensitive and personal emails from the email's inbox. If you'd like to keep your domain, sign into your account on your registrar's website and check the expiration date. You can usually set it to renew automatically with a credit card, or you can manually renew it early. Renew the domain for a number of years instead of just one, so you don't have to worry about this issue every year. Don't ignore those “It's time to renew!” emails from your registrar, and make sure they're not getting trapped in the junk mail folder.