L.A. Restaurants Struggle With Fraudulent Order Disputes

There’s a spate of new ways to dine and dash during the pandemic, with some users resorting to falsely disputing orders through delivery apps to unjustly request refunds, The Los Angeles Times reports.

The report finds that other scammers have been taking advantage of eateries that were prioritizing health safety over fraud prevention, forcing them to implement new strategies like checking drivers licenses and manually swiping credit cards.

And still more scammers, according to the report, are utilizing fraudulent credit cards.

Restaurants have reported wrongdoing through the use of third-party delivery apps. One customer who disputed a charge, the L.A. Times writes, came through Postmates and claimed they’d gotten the wrong size of a restaurant’s dosirak. Sending a picture and complaining to Postmates, the user was able to get the order refunded in full.

The issue, according to the report, was that the restaurant in question only had one size of dosiraks.

Koko’s Mediterranean Cafe owner Shant Bogharian, according to the report, said he’s seen people asking for refunds minutes after receiving their orders, and others who had placed orders amounting to as much as $140. Some people, prompted for a reason for the refund, simply cite a “change of plans,” the LA Times reports.

And in some cases, the fraud losses cause the restaurants to close down, such Spoon by H, the Korean restaurant operated by Yoonjin Hwang. In one egregious case, Hwang fielded an order for over $700, including lavish combo-meal add-ons, which the recipient was cagey and quiet about. The order was disputed and the payment was removed from her account. She tried to fight that, but ended up losing the case and being responsible for the charge.

PYMNTS reports in a recent Tracker that, with the rise in digital food ordering, fraudsters have begun to slip through the cracks. The kind of fraud described above is called “friendly fraud,” and it’s typically bolstered by the mechanical lack of interaction with restaurant staff upheld by mobile ordering.