kubel said:
Merchants aren't left holding the bag when stolen cards are used. Neither is the owner of the card. The only reason this would be a problem is if the merchant didn't authorize the card. That would be incredibly stupid of them.
As an online merchant for the past 10 years, I can guarantee you that merchants ARE left holding the bag when stolen credit cards are used. Here's how it works:
1. Order is submitted, authorization security checks are made against the credit card. If the information provided with the order match the data on file with the credit card issuer, the order is accepted and the card is charged.
2. Order is shipped. Sometimes the order is shipped to the card holder's address (family/child fraud) sometimes it's shipped to another address (family/child/outsider fraud).
3. Order recipient receives order/tracking shows the order has been delivered.
4. Card holder reports fraud on their card.
5. Credit card issuer contacts merchant's credit card processor and they
IMMEDIATELY withdraw the disputed funds from merchant's bank account.
6. Merchant is contacted by their credit card processor regarding the disputed payment and are given a chance to tell their side of what happened.
7. 99.9% of the time, the credit card processor will side with the customer rather than the merchant. That means the merchant has lost both the merchandise AND the funds. Yes, ALL merchants are left holding the bag each and every time someone reports a fraudulent transaction on their credit card.
Unfortunately, the majority of the population is unaware of this fact and thinks the credit card issuers are the ones that lose the money and that's what all those monthly fees pay for. No, not true. Retailers are the true victims in this situation. :evil: