In that case, they should update the wording on their site to make that clearer. It currently reads:

  "Place an early preorder for your best chance to secure this domain.
   * Includes $100.00 non-refundable application fee. Annual renewal: $20.99"

"Non-refundable" doesn't have any qualifiers to it, such as "non-refundable upon successful registration". In the info-box below, it states:

  "You will receive a full refund if we are unable to secure the domain name
   for you."

Refunding a non-refundable amount is like dividing zero by zero.