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Comment by pigou | Hacker News Reader

Aren't you double-counting here? On net the merchant only loses the merchandise. The net debit to the merchant's account is zero.

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correct maths are: merchant gets 10000 then returns 10000 and still has to pay 7000 to vendor for the goods. net loss is 7K, not 17K

You could also say the total loss is 10K to the merchant, assuming he has a reasonable expectation of making that 3K profit...that is getting a little abstract about it though.

Oh yes you are correct.

In this case the merchant only loses the cost to the vendor ($7,000). Good catch.

Typically there's also a fee imposed by the bank for having a chargeback.

Standard is $25, but if you are a big merchant it could be lower.

I think they're counting the loss of the merchandise. So a chargeback for a $10,000 TV would be like losing $10,000 plus whatever the cost of the TV was for the store.

But it's not. Getting paid $10k and giving it back is net zero.

Not when you could have sold the TV for $10K. This is the shoplifting issue; the shop loses both the product and the potential profit on the product.

It gets a bit existential e.g. can you lose what you never really had? But even if you fall on the NO side of that, the cost of re-obtaining a product is not zero.

The cost of re-obtaining the product is $7k, which were already accounted for. Marginal administrative costs are negligible.

But the merchant is still down a TV. Those things aren't free.

Sure. I objected to the assertion that the merchant lost $17k, which is a gross exaggeration.

Like everyone else said, it's not exactly that. It's like getting paid $10k in exchange for a TV, then giving it back but not getting the TV back in return.

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