On Thursday, May 29, 2003, at 04:06 AM, Danny Van den Berghe wrote:
In your "timed-release payment escrow" system, what if the customer fraudulently claims he did not receive the goods? ...
It's the same as a fraudulent creditcard chargeback. The merchant eats the loss (something he has calculated into his prices anyway). If you know a creditcard company that absorbs the losses for your chargebacks, please send me their address.
Very interesting point, Danny! I was not aware of that -- I thought the credit card companies occasionally "absorbed" chargebacks (and occasionally even tried devious tactics like trying to "hot potato" the charge to other accounts). But if what you say is true, then indeed your idea poses no more risk to the merchants than what they already face with credit cards.
Of course, the merchant could always ship the merchandise with confirmation of receipt requested, and that might help as long as the merchant could use that receipt to preempt any possible chargeback.
As long as you publish the user statistics on your site, both for the buyers and the merchants, the fraud will be kept in check. ... Pretty quickly the frauds will have effectively disqualified themselves from your system.
Yes, but again, what is to stop a fraud ring from suddenly attacking a particular merchant, buying up a bunch of electronics equipment, charging it all back, and then fencing the stolen equipment on the street? Suddenly that merchant's statistics will look pretty grim.
Wouldn't it still be helpful for the merchant to be able to submit proof of receipt of goods to preempt chargebacks like this?
But again, I guess you're saying that the risk in your system is still NO GREATER than the risk merchants already face -- and that big merchants already face that kind of attack with credit cards.
Hmm, it's interesting -- if IN FACT we can establish that with timed-release e-gold, merchants face NO GREATER risk than they already face with credit cards, AND that the timed-release e-gold system has lower merchant fees than credit cards, we might just have a winner. Plus there is the added bonus of opening up a slightly larger customer base, those of us holding e-gold.
So:
Equal Risk + Lower Fees + Possibly Larger Customer Base = Winning Combination.
It would be nice if we could replace "Equal Risk" with "Lower Risk," but I don't think that case can be made. Equal Risk + Lower Fees will pretty much have to suffice, and that alone (if true) might help the idea fly.
-- Patrick
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