Chargebacks don't really do anything to prevent fraud, all they do is convert it into a fraud against the merchant. And the only reason there is so much credit card fraud is that the banks have a poor incentive to improve their security (e.g. include some cryptography that lets internet purchasers prove to the merchant that they have physical possession of the card), because the banks are foisting the cost of fraud into the merchants.

They also have no real way to resolve disputes. The merchant says they delivered the goods and the cardholder says they received an empty box, how is a bank supposed to know who is lying?

The way you actually do this is that you don't make any of that part of the payments system. If someone commits fraud, have the police arrest them.

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genewitch 8 months ago | parent [-]

This is a true story:

I ordered a used playstation 4 from amazon or eBay, irrelevant which. The UPS (parcel carrier) driver said hey this box doesn't look right, it's been retaped, do you want to open it? I'm not supposed to let you open it to reject it, but go ahead. "

It was a bucket of tile mud and an ornamental brick. Someone at the local UPS hub had stolen my PS4 and put the label on a shipment originally going to Lowe's.

Now, say the UPS driver and I didn't have that conversation. How do I get my money back? How do I prove the box had a brick and a bucket of tile mud? This isn't rhetorical. Keep in mind, the seller shipped me a PS4. The theft occurred at the carrier.

I find it laughable that any law enforcement would entertain anything other than "filling out a complaint", but the seller shipped a ps4. I paid for a ps4. How do I get a ps4 or my money back in your system?

	▲	AnthonyMouse 8 months ago \| parent \| next [-]
		> Now, say the UPS driver and I didn't have that conversation. How do I get my money back? How do I prove the box had a brick and a bucket of tile mud? This isn't rhetorical. Keep in mind, the seller shipped me a PS4. The theft occurred at the carrier. This is kind of the point. You bought a PS4 from someone on eBay who actually sent you their PS4. and then the carrier stole it. If you issue a chargeback, it's not the thief who loses the money, it's the seller who did nothing wrong. You do want the police to investigate this so they can arrest the thief, because otherwise what is ever going to stop them from just stealing everybody's packages? This is literally their job. But in terms of how to get your money back, the answer is that if you want the ability to do that you buy the insurance and then file an insurance claim. Then the cost ends up on the insurance company, which is set up to handle that, instead of random consumers or small businesses. And when UPS is providing the insurance itself, they then have the incentive to stop hiring thieves, which is where you want the incentive because they're the only ones who can really do anything about it.
	▲	fallingknife 8 months ago \| parent \| prev [-]
		In this case UPS is much more likely to be interested in this than the police. They will go after the employee who did this aggressively. And when UPS makes the report to law enforcement they will be much more likely to listen.