A growing number of Los Angeles restaurateurs are experiencing financial loss and stress as dishonest customers invent new ways to 'dine and dash' during the pandemic, reports the L.A. Times.
With more restaurants relying on third-party delivery apps to reach their customers during the pandemic, some restaurateurs are finding themselves even more vulnerable to credit card fraud and scammers claiming refunds.
With fraud reportedly on the increase in the US nationwide, the dollar amount of attempted fraudulent credit card charges increased by 35% in April 2020 from a year before, according to Fidelity National Information Services Inc. A boom in third-party delivery services, which have nearly doubled during the pandemic according to marketwatch, has meant restaurateurs are feeling the sharp end.
In November 2020, Yoonjin Hwang, from Korean restaurant Spoon by H, experienced a fraudulent order for a meat lovers combo meal worth $728.76 through the Tock platform. After a lengthy dispute, in which she lost her appeal with the platform, she was left to pick up the bill. As a result, she started taking videos of every order pickup and requiring all customers to show their driver’s licences, as well as taking photos of every order to avoid being scammed again.
“It took a huge toll on me mentally, because I found myself becoming more skeptical of large orders,” she said. “It pains me to think that I would grow so suspicious of our customers, and that is not how I want to do business.” She plans to close the restaurant by the end of this month as she is still losing money despite putting new security measures in place.
Other restaurants that have also been affected include A Cut Above Butcher Shop in Santa Monica, which now flags any large purchases from a new customer, and requires them to come into the store and present the credit card to charge in person, after having hundreds of dollars disputed by their credit processor.
“People are desperate and we need the business, so when someone puts in a big order, [the business is going] to take it. You think, ‘Oh my God, it’s too good to be true,’ then you find out it’s a total scam,” chef-owner Eddy Shin told the L.A. Times.
Restaurateurs have also reported cases of people not only suggesting their order was short, but also requesting a full refund through third-party apps and delivery services just ten minutes after picking up the order due to a 'change of plans'. “It’s insulting. We just went through the effort to make the food for this person, they picked it up, then they ask for a refund,” Shant Bogharian from Koko’s Mediterranean Cafe told the L.A. Times.
As vulnerable restaurateurs learn a disheartening and expensive lesson, that the customer is not always right, it serves as a reminder how now, more than ever, their security systems should be as watertight as possible.