4 ms·
Aren't you double-counting here? On net the merchant only loses the merchandise. The net debit to the merchant's account is zero.
by pigou 13y ago
Aren't you double-counting here? On net the merchant only loses the merchandise. The net debit to the merchant's account is zero.
- ceol 13y agoI 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.
- kelnos 13y agoBut it's not. Getting paid $10k and giving it back is net zero.
- bwooce 13y agoNot 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.
- icebraining 13y agoThe cost of re-obtaining the product is $7k, which were already accounted for. Marginal administrative costs are negligible.
- rmc 13y agoBut the merchant is still down a TV. Those things aren't free.
- kelnos 13y agoSure. I objected to the assertion that the merchant lost $17k, which is a gross exaggeration.
- ceol 13y agoLike 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.
- solnyshok 13y agocorrect 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
- dougk16 13y agoYou 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.
- 1337Coder 13y agoOh yes you are correct. In this case the merchant only loses the cost to the vendor ($7,000). Good catch.