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Contrary to popular belief, merchants are responsible for frauduluent charges, big or small. They pay not only in any lost merchandise or services, but also in
by chrischen 9y ago
Contrary to popular belief, merchants are responsible for frauduluent charges, big or small. They pay not only in any lost merchandise or services, but also in losing the payment.
This shifting of burden ultimately comes back to the consumer in higher costs and fees, and is just a cost of business for the merchants. The credit card company beneifts because they make money regardless of fraud, and they’ll make increased money from the detachment of the feedback loop from the consumer. Merchants don’t pursue fraud because they simply increase costs to cover it.
In this scenario merchants lose, consumers lose, credit card companies win from increased usage.
- joosters 9y agoSee the text I cited from the card association’s website. Merchants are only responsible for fraud (in the U.K. at least) if they did not use chip + PIN properly. Who pays for fraud, in the end? Well, the customers pay, of course, since they are ultimately the only source of funds. Regardless of whether or not the merchant or bank eats the fraud, they are going to recoup the cost through their charges to customers.