aleksl - 1:17 am on Mar 17, 2010 (gmt 0)
yes this deserves a bold face:
The Credit Card Companies don't loose a dime. They pass the hit onto the Merchant.
It is extremely rare that a bank or credit card company will take one on the chin in this. That, and also the cashback and rewards points that they give out - no, they aren't theirs to give, it is MERCHANTS who pay these. CC companies are basically parasites getting fees for passing bits and bites around.
Also, on non-delivery of merchandise, it is quite common that merchandise just isn't available - it is easy to create a product listing, but keep it in stock is more difficult. In our line of business we see this all the time, companies come and go, some people look for product that isn't there anymore, but websites may be still there. Or manufacturer moved to China and it is now on a long backlog. So what a customer does? He chargebacks, since banks make it easy to do, sometimes so easy customer prefers to call a bank instead of a merchant to get this resolved.
Also, how much of that "fraud" is attributed to improper integration with third party systems, like PayPal? I guarantee you we get complaints on this one because a customer didn't bother to click "Back to merchant" button to complete the transaction.