Every time an online store is contacted by a bank and notified that fraudsters used someone elses card to purchase goods on a website, the store owner has to pay a huge chargeback fee for each fraudulent transaction.
My brother who works the backend for a large online store and monitors illegal activity says that bank effectively get the chargeback and the original fee and refund fee. Banks make a fortune off chargebacks - that’s why they all offer online fraud protection on their cards.
I think this is outrageous and should be totally illegal. The onus should be on the bank to monitor illegal activity on their own customers accounts and they should pay if they miss anything - anything else should be covered by the banks insurance.
If a transaction is cleared by a bank to purchase completely legal items on a legal online store, then the store owner should be paid what they are owed by the bank. You’d think it should be that simple… dream on.
Did you know that the the USA banking system has massive fraud problems - apparently many US banks dont even do a complete security check for the transaction online. The name could even be wrong and the transaction would still clear. Its absolutely shocking that banks are getting away with this and small businesses are paying for it.
The whole system is so screwed up and if we dont keep an eye on it, it could devastate online businesses.
If you have an online retail store you might want to read this article: - strategies for minimizing chargebacks