You obligation to investigate under Regulation E is separate from your ability to utilize the chargeback process in an attempt to recover funds from the merchant. The fact that one grandchild was given authorization to use the access device does not provide carte blanche for another grandchild to use the access device.
Your Regulation E investigation will have to determine whether the consumer initiated the electronic funds transfers or if they gave authority to the individual who did as noted in the definition of an unauthorized transfer in 1005.2(m).
Your chargeback rights are based on the method of authorization and Visa/Mastercard chargeback rules. Many online purchases have chargeback rights for fraud. However, charge backs rights are often limited to transactions greater than $25 and also exclude merchants that process transactions using tokenization or EMV 3-D Secure programs.