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Comment by tyingq | Hacker News Reader

The way credit cards put the burden of refund fraud on the seller enables a fair amount of this. I lost an appeal on a chargeback even after I hired a "task rabbit" type person to take a photo of the item sitting in the buyer's shop window. A custom-made item that was very clearly the item claimed as "did not arrive", in a window, with the customer's street address visible in the same photo. Accompanied with Google Street view pictures and links corroborating the location.

So, often, sellers just refund these because they know fighting it is fruitless. Oh, and you get to pay a chargeback fee on top of losing the item value and cost of shipping if you choose to fight and lose.

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This is known as "the cost of doing business" and used to be baked into business models. Granted, business models have changed significantly with the rise of the internet and direct individual sales, so maybe it's time for a change. As long as that change still protects consumers from larger businesses with the edge against them.

You could have efficient legal systems to take care of companies that defraud their customers. And then use payment methods that do not allow chargebacks (And don't cost more than 0.01$ per transaction.)

The current legal system allows a business to take a customer to court after a customer issues a chargeback and the business loses.

I'm actually surprised businesses don't do it more often as a deterrent. At a minimum, they could go win a few easy cases, then tell future customers threatening chargebacks about those cases and the outcome.

They could send a simple letter saying "We see you have initiated a chargeback against us. After investigation, we believe this chargeback not to have any merit. In cases of false chargebacks, it is our policy to take clients to court to reclaim our costs, which in past cases have averaged $X on top of the value of the goods.".

Small businesses would have to travel to the customer's jurisdiction. I don't imagine many cases would meet the risk/reward bar for this.

They only need to do a few easy local cases to be able to act as a deterrent.

How would that deter those who know they are sitting in a far away jurisdiction?

Larger businesses can afford to simply ban someone for eternity for a chargeback.

Also, if fraud is a cost of doing business, then that society is going to start wasting a lot of resources and be less productive than societies with less fraud.

From what I understand by reading around (I'm not from the US) petty theft in some areas causes already the problem you're mentioning for offline businesses as well.

It is. I live in NYC and stopped going to CVS late at night because there is such a looter problem in my neighborhood, I can't buy shit at that time. The looters are there with bags ransacking the isles while I wait behind hoping they leave what I came to buy. Sometimes if it's locked then they can't take that but so still have to wait for them being done to go through the isle lol.

I wonder why they keep those stores open sometimes.

What neighborhood?

I used to live in SF and would see shoplifting all the time but now live in NYC and haven’t seen it that much.

Not OP, but when I lived at 123rd and Lex, the A&P was looted constantly. Like OP, I just stood back and hoped they didn't go after my staples (beans, rice, spices).

FiDi. Only after dark (never seen it during the day), and not all of the pharmacies get hit as bad. There is like a million pharmacies around and I've only seen one closed so it can't be that bad, but damn it's annoying. Like, can you leave one bottle of shampoo please?

Throughout most of the rest of the country CVS and Walgreens are shuttering all over the place and are blaming it on theft. I have my doubts about theft being the culprit, but my nearest CVS is 20 minutes away, and there used to be 3 between here and there (likely the real reason they are closing them).

I think historically most of theft was from people working there.

I never worked retail myself, but I've heard plenty of stories from people who do.

One person I knew called it "taking out the trash". They would fill trash bags with cds. He had a room full of unopened ones.

The cost is passed to the consumer, so it's in everyone's best interest for this to be as rare as possible.

Only up to the point where it costs more to prevent than you save.

It only costs ~25 cents to stop a robbery.

You can’t get to 0 robberies by spending 25 cents * the number of robberies in the US.

You can cheaply discourage someone from robbing you and instead rob someone else. But 0 nationwide would be vastly more expensive.

It doesn't make it less ridiculous, and doesn't change the incentives it sets up. Since the losses are spread across a bunch of (often small) businesses, scenarios like this where the crime goes unresearched are the norm.

I'm not asking for sympathy here, I'm explaining why it's a free for all. It would be fairly easy for the credit card companies to aggregate the data and revoke cards from these people (when there's a pattern) because they have that visibility. Or, if revocation is too hard, give me back a "return fraud risk score" when I do a pre-auth....even if said score has a very high threshold before it shows. But they have no reason to, because it doesn't hurt them in any way.

Isn't this fraud and a matter for police?

Yes, I know police in the West tend to not bother with helping with such mundane stuff.

I did call them, they were in a different state. They were sympathetic, but honest in that this sort of thing doesn't hit their minimum level of interest to do anything with.

Call a level higher then because its mail fraud, a federal offense. Try the post office general or their local attorney general.

UPS, Fedex, etc.

From what I've read (quickly) they are considered commercial interstate carriers so mail fraud laws still apply.

Even if it goes no where legally, them getting an investigative phone call from their AG might be enough to deter future scamming, or maybe even convince voluntarily pay you back.

Either way, good luck! (Btw, have you seen that service where you can mail order cow dung? Just sayin')

That would be a small-claims slam-dunk though, right? Or at least a social media death sentence for the shop...

Cross-state small claims isn't trivial...

You can win the court case, but collecting is half the battle.

As far as I know, banks are the ones that handle disputes between a legitimate buyer and seller, while the card processor (Visa/MC) only handles fraud disputes. Depending on how much that person spends on their card, the bank might honor their chargeback regardless of the circumstances because they don't want to lose all future business of that one person.

Why not take them to court or get the police involved? Did you do those?

Different state and their local police are not interested in this sort of crime.

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