Restaurants Dependent on Takeout Orders Seeing Rise in Credit Card Chargeback Fraud

Posted 42 days ago


Takeout and delivery orders have offered many restaurants a financial lifeline during the coronavirus lockdown. But some dining establishments are falling prey to a new kind of dine and dash in which customers dispute legitimate credit card charges related to an order, forcing the restaurant to foot the entire bill.

The takeout scam has become so prevalent that it is forcing some restaurants out of business, CBSLA reported. Called “chargeback fraud,” the restaurant variety is frequently happening through a delivery service, like Grubhub or UberEats, which already take a percentage out of the restaurant’s profit in the form of service fees.

To pull off the scam, a customer will receive the food order but then dispute the charge with his credit card company, which issues a refund. In the end, the restaurant takes a loss on the whole order.

The scam is spreading at a time when many restaurants are already hanging by a thread as Democrat-controlled cities and states continue to restrict in-person dining, f... (Read more)