Online shoplifting is the theft of goods from an Internet-based merchant. While it might seem harmless since the shoplifter never physically interacts with the victim, it is a crime with serious legal repercussions, including charges such as mail fraud.
Key Takeaways
- Online shoplifting involves stealing products from an e-commerce site.
- A chargeback or dispute claiming the goods were never received (although they were) is one form of online shoplifting.
- Secondary effects of this fraud include credit card issuers refusing to work with the merchant due to excessive chargebacks.
- Illegally downloading copyrighted music, books, or movies is another form of online shoplifting.
How Online Shoplifting Works
One method of online shoplifting is through the credit card chargeback process. A consumer purchases goods online using a credit card, receives the goods, and then submits a statement to the credit card company claiming they never received the goods. As a result, the credit card company initiates a chargeback and forces the merchant to refund the customer’s purchase.
Even though the customer never sets foot in the merchant’s physical store, they have effectively shoplifted by dishonestly using the chargeback process to obtain goods without paying for them. Furthermore, if a credit card payment processor receives too many chargeback requests for the same company, it may cease doing business with them. This secondary damage from online shoplifting means the online merchant can no longer accept a certain brand of credit card, potentially lowering sales by inconveniencing customers.
It’s important to note that chargebacks themselves are not inherently fraudulent, but abused consumer protection tools raise alarm with both retailers and credit card issuers. Beyond lost merchandise, processing a chargeback request can also add significant costs, averaging around $40 per request.
Types of Online Shoplifting
Another way online shoplifting occurs is through piracy. Illegally downloading copyrighted music, books, or movies for free instead of purchasing them through legitimate channels robs both producers and distributors.
This issue is challenging to combat due to several factors: consumers of pirated content want items for free or at a significantly reduced cost; media companies often lack the resources to combat the demand for free content effectively; and digital media evolves quickly, often outpacing the ability of large businesses to respond. Fast-moving networks of savvy hackers and piracy groups make the situation ever more complex. Moreover, the rise of user-generated content allows anyone to create and distribute media, often unknowingly committing copyright infringement along the way.
Finding solutions to online shoplifting through piracy lacks a one-size-fits-all approach. Companies must cobble together asset-protection strategies piece by piece, minimizing losses and ensuring protective measures are in place to combat this persistent issue.
References
- New York Times. “Disputing a Charge on Your Credit Card”.
