Chargebacks

[davedx]

I had to do a chargeback for a Thai ferry company who said I hadn't paid them for my tickets when the transaction actually had gone through. We still needed to use the ferry so I ended up paying with cash closer to the date in a brick and mortar office. After trying to contact them several times when I got back with no success I asked my credit card company to do the chargeback. Overall it was a massive waste of my time (and probably the CC company's), and the ferry company ended up with a black mark against it, presumably because of bad back office software or bad accounting. (The ferry company is generally reputable and the actual trips went fine).

I think if I had paid with Bitcoin escrow for this service it would have been much simpler. They would have been forced to issue the e-ticket before receiving any funds. If they hadn't issued the e-ticket and I'd ended up paying in cash, I would have wasted a little bit of time on my end... and that's it.

One thing that might help in this kind of situation where a merchant with high transaction throughput uses Escrow would be to perhaps show their Escrow "success rate", a bit like a consumer credit rating. But I'm not sure about the implications of this.

There's a huge market here.

[hilariousandco]

Using an escrow is just like relying on chargebacks anyway, so I don't really see the difference.

[virtualfaqs]

I had to do a chargeback for a Thai ferry company who said I hadn't paid them for my tickets when the transaction actually had gone through. We still needed to use the ferry so I ended up paying with cash closer to the date in a brick and mortar office. After trying to contact them several times when I got back with no success I asked my credit card company to do the chargeback. Overall it was a massive waste of my time (and probably the CC company's), and the ferry company ended up with a black mark against it, presumably because of bad back office software or bad accounting. (The ferry company is generally reputable and the actual trips went fine).

I think if I had paid with Bitcoin escrow for this service it would have been much simpler. They would have been forced to issue the e-ticket before receiving any funds. If they hadn't issued the e-ticket and I'd ended up paying in cash, I would have wasted a little bit of time on my end... and that's it.

One thing that might help in this kind of situation where a merchant with high transaction throughput uses Escrow would be to perhaps show their Escrow "success rate", a bit like a consumer credit rating. But I'm not sure about the implications of this.

There's a huge market here.

That's the problem right there. As a buyer, I'd pay with credit card unless there was a BTC discount. As a seller online, I usually don't take credit cards for intangibles because there is so much fraud revolving around it.

[bonker]

In nearly all the posts I read regarding Bitcoin people mention that irreversible transactions are fantastic and the way forward.
 
I can understand this from the point of view of businesses but not from the point of view of the consumer. Why would people switch to start paying in BTC if they have no comeback should whatever it is they purchased not be as described or not received?

I read it all the time, people saying how they sent x thousands of $ to a random company they found on the internet in expectation that they would receive BTC in return - of course many people get ripped off and have no comeback as they are sending payments by non reversible methods.

If Bitcoin will continue to gain ground it will not only change how payments are sent and received but will change the very nature of how things are done leading to a survival of the fittest scenario where people not blessed with a large amount of common sense end up penniless and destitute.

I have read so many sob stories on this forum from people who have sent money for BTC to a company with no address listed on their site based in some backward country that it makes you think how could someone be so stupid? I have also read recently someone who sent money 3 times to the same company as each time they gave an excuse as to why they needed more? I mean come on!

Just wondering if the general consensus from long time Bitcoin users is that if someone is stupid enough to send money to a company that is so obviously not legitimate they deserve to loose their money?

The solution is simple, a thrid party middle man to act as honest broker -> a quick fortune to be made here

[Mike Hearn]

https://en.bitcoin.it/wiki/Contracts#Example_2:_Escrow_and_dispute_mediation

[empoweoqwj]

A chargeback system doesn't necessarily protect the consumer. Here's a link explaining why porn industry merchants prefer credit cards.

https://bitcointalk.org/index.php?topic=392310.0;topicseen

And probably why the porn industry hasn't adopted bitcoin at all

[jonanon]

Another issue then is who sends to the escrow agent first?

Say I want to sell 1BTC for $750 - If I send the BTC to the escrow agent and then the buyer negates on the deal then I have lost time and effort.

Also if I'm running an online business for example I would not want to ship anything until the money was safely in my account/wallet. You have to bear in mind that you still need to trust the escrow agent - I don't want to have to trust anyone or trust that the escrow agent will find in my favour in case of an issue.

I really hope that a solution that is not escrow can be found to this issue.

[empoweoqwj]

Another issue then is who sends to the escrow agent first?

Say I want to sell 1BTC for $750 - If I send the BTC to the escrow agent and then the buyer negates on the deal then I have lost time and effort.

Also if I'm running an online business for example I would not want to ship anything until the money was safely in my account/wallet. You have to bear in mind that you still need to trust the escrow agent - I don't want to have to trust anyone or trust that the escrow agent will find in my favour in case of an issue.

I really hope that a solution that is not escrow can be found to this issue.

Escrow really isn't that difficult. Its works quickly and efficiently 99% of the time. If you don't want to use it, fine. Just buy off big retailers that you trust.

Or just keep using ebay / paypal and the mess that is!

[MrPalmer]

Everyone is saying Escrow, but as a business owner, I don't want a middle man in my transactions with my customers.  No way.  I don't know what the alternative could be, but that will not fly IRL. 

Small businesses will need to develop a strategy to handle this concern from their customers, for sure. 

[empoweoqwj]

Everyone is saying Escrow, but as a business owner, I don't want a middle man in my transactions with my customers.  No way.  I don't know what the alternative could be, but that will not fly IRL. 

Small businesses will need to develop a strategy to handle this concern from their customers, for sure. 

The strategy is to become "trusted", and to offer + give refunds to unsatisfied customers. Not sure how this mechanism will develop with bitcoin but I'm sure some service will step in.

As a business owner, you should be delighted at the the prospect of accepting customers from round the globe that previously got turned down automatically by credit card companies because they come from "high fraud" countries. The age of truly global commerce is just about to happen.

[MrPalmer]

Everyone is saying Escrow, but as a business owner, I don't want a middle man in my transactions with my customers.  No way.  I don't know what the alternative could be, but that will not fly IRL. 

Small businesses will need to develop a strategy to handle this concern from their customers, for sure. 

The strategy is to become "trusted", and to offer + give refunds to unsatisfied customers. Not sure how this mechanism will develop with bitcoin but I'm sure some service will step in.

As a business owner, you should be delighted at the the prospect of accepting customers from round the globe that previously got turned down automatically by credit card companies because they come from "high fraud" countries. The age of truly global commerce is just about to happen.

So the middleman/escrow is only for untrusted accounts, as they gain rep.?  That makes sense.  That's true that a refund will be simple to accomplish, but as someone pointed out, going from untrusted > trusted could be a very challenging task for small businesses.  Local businesses it's much easier to handle that situation, with face to face transactions. 

I'm definitely excited to be able to accept a new global customer, and a new form of currency!!  For small businesses that sell online, this is great!

[empoweoqwj]

Everyone is saying Escrow, but as a business owner, I don't want a middle man in my transactions with my customers.  No way.  I don't know what the alternative could be, but that will not fly IRL. 

Small businesses will need to develop a strategy to handle this concern from their customers, for sure. 

The strategy is to become "trusted", and to offer + give refunds to unsatisfied customers. Not sure how this mechanism will develop with bitcoin but I'm sure some service will step in.

As a business owner, you should be delighted at the the prospect of accepting customers from round the globe that previously got turned down automatically by credit card companies because they come from "high fraud" countries. The age of truly global commerce is just about to happen.

So the middleman/escrow is only for untrusted accounts, as they gain rep.?  That makes sense.  That's true that a refund will be simple to accomplish, but as someone pointed out, going from untrusted > trusted could be a very challenging task for small businesses.  Local businesses it's much easier to handle that situation, with face to face transactions. 

I'm definitely excited to be able to accept a new global customer, and a new form of currency!!  For small businesses that sell online, this is great!

I am a merchant. I sell domain registrations and other domain services. Our "merchant processor" blacklists probably 100 countries because of fraud. That would instantly go away with bitcoin. Of course the customers would have to trust me to deliver the service, but there are many ways to show you are trustworthy as a merchant. For example, I've been in business 10 years. That helps. Plus delivering the "goods" every time. And if you have any dispute, which can always happen, show good faith, just as you would with any kind of customer, whether they are paying with an irreversible currency or not.

[bluemeanie1]

In nearly all the posts I read regarding Bitcoin people mention that irreversible transactions are fantastic and the way forward.
 
I can understand this from the point of view of businesses but not from the point of view of the consumer. Why would people switch to start paying in BTC if they have no comeback should whatever it is they purchased not be as described or not received?

I read it all the time, people saying how they sent x thousands of $ to a random company they found on the internet in expectation that they would receive BTC in return - of course many people get ripped off and have no comeback as they are sending payments by non reversible methods.

If Bitcoin will continue to gain ground it will not only change how payments are sent and received but will change the very nature of how things are done leading to a survival of the fittest scenario where people not blessed with a large amount of common sense end up penniless and destitute.

I have read so many sob stories on this forum from people who have sent money for BTC to a company with no address listed on their site based in some backward country that it makes you think how could someone be so stupid? I have also read recently someone who sent money 3 times to the same company as each time they gave an excuse as to why they needed more? I mean come on!

Just wondering if the general consensus from long time Bitcoin users is that if someone is stupid enough to send money to a company that is so obviously not legitimate they deserve to loose their money?

Confidence Chains can support chargebacks natively.  This capability is critical to conducting e-commerce.

http://altchain.org.

-bm

[empoweoqwj]

In nearly all the posts I read regarding Bitcoin people mention that irreversible transactions are fantastic and the way forward.
 
I can understand this from the point of view of businesses but not from the point of view of the consumer. Why would people switch to start paying in BTC if they have no comeback should whatever it is they purchased not be as described or not received?

I read it all the time, people saying how they sent x thousands of $ to a random company they found on the internet in expectation that they would receive BTC in return - of course many people get ripped off and have no comeback as they are sending payments by non reversible methods.

If Bitcoin will continue to gain ground it will not only change how payments are sent and received but will change the very nature of how things are done leading to a survival of the fittest scenario where people not blessed with a large amount of common sense end up penniless and destitute.

I have read so many sob stories on this forum from people who have sent money for BTC to a company with no address listed on their site based in some backward country that it makes you think how could someone be so stupid? I have also read recently someone who sent money 3 times to the same company as each time they gave an excuse as to why they needed more? I mean come on!

Just wondering if the general consensus from long time Bitcoin users is that if someone is stupid enough to send money to a company that is so obviously not legitimate they deserve to loose their money?

Confidence Chains can support chargebacks natively.  This capability is critical to conducting e-commerce.

http://altchain.org.

-bm

Chargebacks are not critical to conducting e-commerce, sorry.

[notig]

it's in a businesses best interest to behave nicely. If they rip people off they cannot succeed ultimately as a business. It is in a customers best interest (selfish interest) to behave maliciously. They don't have a reputation they have to keep. They can rip off a business and move on. So it makes sense to have the burden of trust placed with the customer rather than the business.

That aside..... it's perfectly possible to have chargebacks with bitcoin. If a site like ebay accepted bitcoin they could keep transactions off the blockchain and therefore reverse when they want to.

[erono]

use escrow if you dont trust them.

[cdog]

So lets then assume consumers aren't willing to?  Where does that leave the proposition that Bitcoin use will become widespread common currency?  I agree with the OP, chargeback is an advantage of Bitcoin that only benefits seller and as most people are buyers, the advantage is overstated.

No, the advantage is clear and huge. Chargebacks are the main vector of credit card fraud and probably the biggest source of all fraud in the world.

This leads to higher prices for goods and services which are passed directly to the consumer.

By eliminating these excessive fees, Bitcoin allows businesses to operate with much lower margins which has a massive benefit to everyone.

Furthermore, credit cards as they exist today are simply exploitive of the 99%. I own a couple simply for credit score purposes.

If you cant afford to buy something or cant be sure you trust the company you are buying from, you shouldnt be buying the product at all. Period.

[empoweoqwj]

So lets then assume consumers aren't willing to?  Where does that leave the proposition that Bitcoin use will become widespread common currency?  I agree with the OP, chargeback is an advantage of Bitcoin that only benefits seller and as most people are buyers, the advantage is overstated.

No, the advantage is clear and huge. Chargebacks are the main vector of credit card fraud and probably the biggest source of all fraud in the world.

This leads to higher prices for goods and services which are passed directly to the consumer.

By eliminating these excessive fees, Bitcoin allows businesses to operate with much lower margins which has a massive benefit to everyone.

Furthermore, credit cards as they exist today are simply exploitive of the 99%. I own a couple simply for credit score purposes.

If you cant afford to buy something or cant be sure you trust the company you are buying from, you shouldnt be buying the product at all. Period.

Exactly. But most consumers are "protected" from knowing about chargebacks, how they work, how much they cost, how they stop people from buying things, how they increase prices. Too many people have been "educated" by credit card companies. Time for change.

[davedx]

So lets then assume consumers aren't willing to?  Where does that leave the proposition that Bitcoin use will become widespread common currency?  I agree with the OP, chargeback is an advantage of Bitcoin that only benefits seller and as most people are buyers, the advantage is overstated.

No, the advantage is clear and huge. Chargebacks are the main vector of credit card fraud and probably the biggest source of all fraud in the world.

This leads to higher prices for goods and services which are passed directly to the consumer.

By eliminating these excessive fees, Bitcoin allows businesses to operate with much lower margins which has a massive benefit to everyone.

Furthermore, credit cards as they exist today are simply exploitive of the 99%. I own a couple simply for credit score purposes.

If you cant afford to buy something or cant be sure you trust the company you are buying from, you shouldnt be buying the product at all. Period.

Exactly. But most consumers are "protected" from knowing about chargebacks, how they work, how much they cost, how they stop people from buying things, how they increase prices. Too many people have been "educated" by credit card companies. Time for change.

I don't know how many normal people with credit cards really know about chargebacks. Most people only find out about them when something goes seriously wrong. I don't think I knew about them until I started working with e-commerce projects as a developer, and I'd had a credit card for many years before then.

I did my first chargeback last year, ~14 years after getting my first credit card. I suspect many people are like me.

Fraudsters on the other hand... it's a weapon for them!

[pening]

So lets then assume consumers aren't willing to?  Where does that leave the proposition that Bitcoin use will become widespread common currency?  I agree with the OP, chargeback is an advantage of Bitcoin that only benefits seller and as most people are buyers, the advantage is overstated.

No, the advantage is clear and huge. Chargebacks are the main vector of credit card fraud and probably the biggest source of all fraud in the world.

Biggest source fraud in the world?  its not even the biggest source of credit card fraud, which is skimming/cloning. 

The whole argument seems focused on online consumer business, yet i find these to be cheaper than brick&mortar where there is less use of cards and far fewer chargebacks (presumably though i have no evidence, but there are less scope for claims, no failed delivery, product not right etc.).  I conclude that there are higher overheads for a bricks&mortar than an online shop, suggesting the CC fees aren't as big an issue as claimed.