This behavior for smaller companies will likely result in fines from Visa, MasterCard and other cards. You really are supposed to treat charge-backs like you would losing an arbitration if you are a merchant. I've watched many a merchant do shady things around charge-backs and find out the hard way (I used to own an MSP, was enlightening). Most of the time it was trying to sue someone after losing, and then getting their case tossed because the judge treated the suit like they were reviewing an arbitration... and most of the time the merchants were actually in the wrong (as in selling defective goods, not delivering services or over-charging).