I have added a category to my products that I would like to delete. When I hit the arrow for the drop down menu at categories, there is an add button but no way to delete an unwanted category.
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Hmmm.... I just rechecked on my test store and sure enough there are a pencil and trash icon.
If you have established categories and do not see these icons, I would get on the horn with GoDaddy and find out what's up.