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Online stores purporting to sell assorted household goods are being used as a front to collect internet gambling payments, reported Reuters . Per an examination by the international news agency, seven “dummy” sites operating in Europe pretended to sell DVD cases, fabric, flags, gift wrap, maps, mechanical tape and pin badges, among other items. The sites were actually elements of a multinational system aimed at hiding payments for the $40 billion online gambling industry. Online gambling is illegal in many countries and in some U.S. states. Reuters noted its findings raised serious questions about how eCommerce is policed around the globe. It also revealed a fraud perpetration strategy that card issuers and banks have not yet addressed. According to the report, the strategy is known as transaction laundering and occurs when an online merchant processes a payment card transaction for someone else, hiding the true nature of the payments. The report noted that all Visa and Mastercard online purchases are assigned internal system codes to monitor purchase types as they are processed, allowing the companies to stop transactions flagged as illegal in a given country. Gambling transactions are allotted code 7995 and receive further scrutiny. The websites involved in the Reuters-revealed scam held payment codes for household items, but no products were delivered.
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"Two-day shipping helps out a ton," Halusker said of Amazon, the internet retailer she uses most often. Halusker said she still buys groceries and most of her clothes at traditional stores, but she goes online for almost everything else. More and more consumers are following her example. While internet sales accounted for only around 8 percent of retail sales in 2016, online purchases grew by 15 percent compared to 2015, a significant bump which is enough to affect revenue at brick and mortar stores. However, even when customers aren't shopping online, the internet can still impact conventional shops. In addition to giving customers another shopping outlet, the internet makes it easier to compare prices and find the best deal, said Jack Kleinhenz, chief economist for the National Retail Federation. That depresses the power of retailers to set profitable rates. "With no pricing power, their margins become thinner," Kleinhenz said. Retail sales during the spring months actually rose slightly in 2017 compared to 2016, Kleinhenz said, citing a recently released report on nationwide sales, but he said consumers are likely taking advantage of falling prices.
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