Just to work one (real) example:
1. Buy expensive face cream from Amazon
2. Take out the expensive stuff and replace it with junk
3. Complain to Amazon that you got junk and need a refund.
The challenge here becomes obvious. Even in claims where the customers was allegedly a victim, some portion of those customers are fraudsters. So any policy that results in a large, profitable company will likely result in something less than 100% of legitimate fraud cases from being satisfactorily resolved.
In the case of the small business, they are very unlikely to be targeted by industrial scale fraud and will probably just be able to solve this with personal relationships and human judgment.
That said, the price you pay the small operator is very likely to be meaningfully higher than the price of the scaled operator.
If you care more about having near 100% probability of having fraud/abuse cases addressed than you care about benefiting from the economies of scale, then yeah, go with the small operator.
In things like communities, my general sense is that there is almost no beneficial economies of scale. So I like to hang out in smaller places. But in things like information retrieval (ie. Google), the benefits are usually worth it for me to use that.