How many times in your life have you had to use a charge back? I never have.
1) When a budget airline went bankrupt, leaving me stranded in a country most people can't place on the map (i.e. limited flights out of it.) The full ticket price was refunded.
2) When a music festival I had a ticket for went bankrupt. Full ticket price refunded.
3) When a concert was cancelled, and I'd bought the ticket on a dodgy reselling website which refused to refund (ViaGoGo), saying they'd not been informed of the cancellation. It was widely reported in the music press, and there was an apology on the band's homepage. The bank refunded the money.
Fraud and theft are fairly general problems. I would direct your attention to /r/sorryforyourloss
> In other words, are merchants eating all the costs of fraudulent credit card transactions?
If the goods cannot be recovered, then yes, the merchant eats the costs.
> I guess either way the cost really gets passed on to us consumers in the end.
Someone will always be left holding the short end of the stick when fraud occurs. The alternative to shifting the liability to the merchant is the consumer being directly accountable (rather than vicariously as you're suggesting).
If (!Supported by blockchain):
Print("Useless tech and I dont use it")
Print("HODL")