Except for the whole "you have no recourse as a consumer since there are no chargebacks" thing. And no, the better business bureau, ratings websites, etc don't count.
Presumably Overstock.com is a reputable company, and they would honor their guarantees, so I would feel safe sending them Bitcoin.
I wouldn't give my credit card information out to some untrusted third party that I was unsure of their sending me the products.
Just because the credit card industry has created a massive protection racket in North America doesn't mean it must continue to exist.
There are plenty of business' who cannot take credit card purchases because of possible chargebacks.
I had to do this recently with a site that I expected would be reliable. One that I'd enjoyed the free services of for the past 5 years and had no problem placing a $40 order to download some premium content from. They never bothered to deliver it and wouldn't respond to email, voicemail or twitter. So, I initiated a dispute via PayPal and got my money back. If I'd paid with bitcoin, I couldn't get my money back.
I run my own small business, have worked with many other small businesses, and have friends running all kinds of other small businesses. I don't know of ANY legitimate business that "cannot take credit card purchases because of possible chargebacks".
This is just the first step... far from perfect but 99% of people will be happy to use Overstock and their purchases will most likely go well.
Chargeback fraud is also a problem, especially for businesses selling digital goods who cannot present a tracking # or proof of delivery to Paypal.
I have both issued chargebacks for non delivered goods, and had chargebacks raised against me as a merchant. Generally fraudulent chargebacks are easy to defeat if you run your business well. Generally chargebacks are easy to win if you are a sensible consumer. The costs of chargebacks on consumers and vendors alike are vastly outweighed by their benefits.
Going to a commerce system where that layer of trust is removed is going to be more difficult to do.
The OP was posting that chargebacks can't be that important because they had never done one. That's not the right way to look at it.
For that, you pay a small surcharge to the escrow provider, and you are then protected against fraud:
But for all those transactions where you trust the merchant (ie, overstock.com), you don't have to pay for a service that you don't need.
[1] I'm using quotes because the way it works with multi-signature isn't an escrow, but escrow is commonly used when talking about something like this. There's some explanation about how multi-signature transactions works and why its not an escrow in Bitrated's FAQ, under "How does Bitcoin arbitration work?" and "Is this an escrow?" (https://www.bitrated.com/faq.html)
That being said, I do see the rational behind charging for every transaction and think that its going to be a popular choice too. I wrote some of the reasons for that here: http://www.reddit.com/r/BitcoinSerious/comments/1sqibz/bitra... (near the end, in the "Edit:")
(full disclosure: I'm Bitrated's creator)
People are not going to want to pay for more than the cost of an item when there is a dispute, yet it could cost many more times the value of the disputed item to conduct a proper investigation and produce a fair arbitration.
Great project, by the way. Thanks for releasing it open source!
But a random person trying to sell something on their own cannot take paypal because of possible chargebacks. And we're all paying a premium on the prices because businesses have to cover chargebacks in their pricing.
It's a huge problem for example in trading online game items; the current solution is to have reputation threads, where you have your previous trading partners vouch that you did not chargeback your paypal transaction / did provide the item as promised. Taking paypal from an unknown party is a huge risk.
The seller can still go first, if he's prepared to shoulder the risk. Then the buyer can send the money once they receive the item. This is the same as using paypal.
If neither party is willing to go first, they have to either use a trusted middleman (seller gives item to middleman, buyer sends money, seller confirms to middleman, middleman releases item), or multisig transactions (the same, except the middleman can't run away with the money/item)
This is yet another attempt to hand-wave off bitcoin without thinking.
Plus, bitcoin gives customers the OPTION to not be able to do charge-backs (99% of the time you know you don't need it); that saves money for the merchants, which can be passed on to consumers.
Sounds like how I can't chargeback dollar bills I use for a money order.
I don't imagine it will ever get to the point where people perform financial transactions with bitcoin using raw addresses. They will probably always use third party services like coinbase, which has a fractional commission, for the security, both in having a remote wallet (ie, bank) and providing chargebacks.
To the extent its true (and, actually, money in most of its other historical forms doesn't work much like bitcoin, but yes there wasn't a widely used convenient equivalent to modern payment dispute resolution systems before credit cards), like computers and modern dentistry and all kinds of other modern developments, its not one of those things I'd like to give up having to go back to the way things used to work.
Also, what do you say to the populations of the ~40 countries that credit cards don't work in because charge back requests are too common there? Do you tell them to simply never make online purchases?