Dumpling on Fighting Fraud With Personalized Service

Consumers love getting groceries or meals dropped off at their doors. Nineteen months into the pandemic, meal delivery sales are still setting records, and sales for meal delivery services grew 17% year over year in September. Researchers reported that 50% of the nation’s consumers have ordered from DoorDash, Grubhub, Postmates, Uber Eats and smaller services, and online supermarket deliveries continue to rise to historic levels.

The inevitable downside of these skyrocketing revenues is a commensurate increase in fraud. In August, the FBI warned that hackers are hijacking online accounts at restaurants, supermarkets and food delivery services to steal funds through fraudulent orders and seize personal or financial data. Customers insist on speedy service, so food deliverers face the challenge of providing a seamless customer experience without compromising security.

At least one national delivery firm said it has managed to keep its fraud rate at 0.1% — one-third less than the industry average. Joel Shapiro, co-founder of Dumpling, a startup that enables entrepreneurs to personalize deliveries, said his firm has managed to keep fraud at bay for its nationwide customers. The concept behind the West Coast company, he said, is to allow gig economy workers to build wealth in any industry and not just be cogs in the larger wheels.

“Lots of these [gig] companies are built on the backs of the workers, and there’s a lot of exploitation, lots of difficulties,” Shapiro told PYMNTS in a recent interview. “What drives me and my co-founders is [the desire] to provide a better way for people to be successful.”

Minimizing Fraud Risk

Since its founding, Dumpling has focused on the grocery delivery space. Its app makes it possible for entrepreneurs to establish grocery shopping and delivery services by providing the tools, technology and support to help them run their businesses. What sets the firm apart from competitors and contributes to fewer incidents of fraud is the relationship it builds between personal shoppers and their customers, Shapiro said.

“We’ve found within the grocery delivery space that the person doing the grocery shopping really matters,” he said. “It makes a huge difference [in] customer experience.”

While other firms match a random client and a random shopper each time a customer requests groceries, Dumpling works by maintaining relationships with the same clients, reducing the chances of fraud.

“What we’ve seen in the gig economy and the on-demand space is that it’s completely abstract,” Shapiro explained. “The human connection has been removed, and a client is never going to see a shopper again. In the grocery delivery space, the person doing the shopping really matters [to] the customer, so we built a platform that’s really people-centered, and that really makes the difference.”

In particular, this personal touch minimizes the risk of so-called friendly fraud.

“It’s unlikely a customer will call to say they never received the order when, more than likely, our shopper has been in their home,” he said.

Fraud levels in online grocery and restaurant ordering and delivery will continue to mirror these services’ growth in revenues. Fraudsters will find new ways to steal data, and companies must stay vigilant.

However, firms such as Dumpling demonstrate how effective one-on-one relationships with customers are when stamping out friendly fraud in the delivery space. This personalization, combined with robust tools and technologies for digital identity verification and data security, can help keep delivery services fraud-free.