As someone with an online business, I welcome this.
99% of the chargebacks we see are first party fraud. We lose these disputes even after providing evidence. We've found and submitted Instagram posts of the customer wearing the item they claim to have "not ordered" or "never received". We've had customers communicate with us how much they "love" the item after receiving it, only to file a first party fraud related chargeback months later. No matter what evidence we provide, they always side with the customer.
I don't know what world people are living in, but as a business we have never won a chargeback dispute.
Maybe I'm naïve, but The type of person that does this seems like the type of person that would do this regularly. That is to say: files a large number of chargebacks, with similar reasons, likely facing merchant disputes with evidence.
It really seems like there should be some heuristics applied to the consumer: if some significant percent of transactions (either number or dollar amount) are charge-backs, something is probably wrong that warrants closer investigation.
Someone filing one chargeback per every thousand or more transactions is not trying to scam anyone. Someone who charges-back 50% or more of the transactions they make at online clothing merchants, on the other hand, definitely is.
I wonder if there's just no incentive for the card issuers to do this?
I agree, I wonder if those doing the frequent and fraudulent charge backs are paying 1000s in credit card interest yearly, and are actually good customers for the banks.
> If you are being honest, why are you posting this using a throwaway account?
Maybe he's new?
edit: I see you edited your phrasing to make it nicer, but... It looks like the dude posted under his real name (with a handle that he uses many other places).
An odd time to finally decide to join HN. With no account history, how can the community distinguish between legitimate discourse and shills for a controversial big business agenda story like this?
This is the kind of story that gets picked up by HN first and then ends up published in mainstream media the following week.
Anyhow, I don't defend cardholder fraud, and at the same time I've been ripped off too many times by merchants. They tend to err on the side of themselves, perpetually fleecing masses of real-life flesh and blood human beings.
@mlyle: I appreciate you taking the time to dig into it more and raise the controversy to my attention. This is a helpful way to be, you are great.
People tend to join when an issue that's important to them comes up.
Everyone (retailers, consumers) unhappy with the chargeback system. Honest merchants lose lots of money all the time. It can be difficult to make a chargeback for many kinds of dark patterns (e.g. subscription traps). The fact that everyone's mad makes me think it may not be too tilted against any party, but one would hope it could work better overall.
> @mlyle: I appreciate you taking the time to dig into it more and raise the controversy to my attention. This is a helpful way to be, you are great.
I have a hard time with benefit-of-the-doubt here and get reprimanded a fair bit. :D Just doing my best to improve things where I can.
I've been reading HN for nearly a decade and never commented, but mlyle has it spot on: this is an important issue to me and nearly all the commentary here was one sided.
Thank you for your comment and perspective on this.
It is more likely that most of the comments are from consumers that (secretly) actually do chargeback fraud themselves and have not run a small business and also want merchants, and businesses like yourself to lose all the time. I see it in digital subscriptions, influencers doing it and even users trying to lie their way into getting the service or product for free and the chargebacks hurt both the consumer and the merchant.
It is indeed an important issue that must be tackled.
> It is more likely that most of the comments are from consumers that (secretly) actually do chargeback fraud themselves
*sigh* I think this is also unfair and presumes bad faith.
Both honest consumers and honest merchants have a lot of reasons to feel aggrieved about how chargebacks are handled... and reasons to fear it getting worse.
The worst of the dishonest of each lot have figured out how to tilt the current system to their favor, and may be quite happy with the status quo.
I'm just sharing my perspective as someone that is actually negatively impacted by this. I lose money and my product. Again and again.
I suspect most people think a chargeback dispute is a carefully and fairly adjudicated process, where both sides are heard equally and an evidence based decision is made. From my experience, this is not the case.
As a customer, want to win a dispute 100% of the time?
Here are a few claims that always work:
1. I didn't make the purchase
2. I didn't receive the item
3. The item doesn't "match the description"
Regardless of evidence (eg. signature delivery with ID check), we have never won a dispute in these cases.
We just want the dispute process to be fair - and hopefully this change by Visa gets closer to it.
I appreciate you sharing this additional context, Luke. Please know, I'd never stiff you.
IMHO, the whole CC business reeks. Visa and MasterCard are so big, the top brass have little or no incentive to care about the individual cardholders or the small businesses who rely on them to push transactions through fairly. The entire thing is perverse, and the real human beings at the ends suffer the consequences of the executives' ambivalence to reality.
The thing that's always a problem: the bad actors get lots of practice at being bad.
The individual honest consumer who needs to chargeback or the innocent merchant who's getting scammed is doing something they only do rarely, and so they're bad at it.
The scammer customer or the subscription-fraud-dark-pattern merchant has honed their practices to win chargebacks.
99% of the chargebacks we see are first party fraud. We lose these disputes even after providing evidence. We've found and submitted Instagram posts of the customer wearing the item they claim to have "not ordered" or "never received". We've had customers communicate with us how much they "love" the item after receiving it, only to file a first party fraud related chargeback months later. No matter what evidence we provide, they always side with the customer.
I don't know what world people are living in, but as a business we have never won a chargeback dispute.