Reviewed by Sep 30, 2020| Updated on
Online shoplifting is theft of a merchant's goods on the internet. This kind of shoplifting might seem harmless as the shoplifter never communicates with the victim and performs the scam with a few keystrokes and clicks on the mouse. Nevertheless, it is a felony, and online shoplifters will face serious legal issues, such as allegations of mail fraud.
One way to do shoplifting online is through the process of credit card paying. A customer uses a credit card to buy goods online, purchases the goods and then submits a complaint to the credit card company saying he never received the goods. As a result, a chargeback is initiated by the credit card company, and the merchant is forced to refund the purchase made by the client.
Even though the buyer has never set foot in the place of business of the retailer, he has practically shoplifted the items without paying for them by fraudulently using the chargeback mechanism. However, if a credit card payment processor receives too many demands for a chargeback from the same customer, it may stop doing business with them.
Online retailers, then, suffer secondary damage from online shoplifting because a certain credit card brand is no longer acceptable to them. In addition, this could reduce sales, as the inability to accept the card would greatly hinder customers.
In simple words, chargebacks themselves are not fraudulent, but it raises concerns with both merchants and credit card issuers when customers misuse this method intended for consumer protection.
Another way of doing shoplifting online is through piracy. Unlawfully downloading copyrighted music, books, or movies for free instead of purchasing them through legitimate channels is a form of online shoplifting that robs both creators and distributors at the same time.
The piracy issue has posed a challenge for several reasons. Pirated content consumers want it for free, or at least for a very low cost. Furthermore, media companies also lack the resources to meet increasing demands for free content.
The "underworld" digital media travels faster than big businesses, with conglomerates of smart hackers and pirates joining forces around the globe.
Secondly, the abundance of user-generated content encourages everyone to create and distribute content, and may not even know that copyright infringement is committed along the way.