How Restaurants Can Avoid Friendly Fraud Modern restaurant management


[ad_1]

For the hospitality industry, the past 18 months have been very difficult. Walk down any street, in town or downtown, and there are still many “closed” signs on the front of restaurants and other service businesses. Many small business owners have added online storefronts and delivery services to help keep their business going despite the disappearance of in-store customers, but now they are facing a new economic threat: friendly fraud.

A to study commissioned by Visa found that consumers are spending more on restaurant delivery and online orders for curbside grocery pickup / delivery than any other category since the start of the pandemic. However, reports of friendly fraud – when a customer files a dispute with their issuing bank for a legitimate purchase in order to obtain a refund after receiving goods or services – are on the rise. This can have a disproportionate impact on small businesses.

For restaurateurs, it’s dinner and dashboard delivery.

How restaurants can protect themselves against friendly fraud

In many ways, restaurants offering online ordering and delivery services face the same challenges as other online businesses. As such, the same preventive measures may apply, in particular:

  • Set fraud filters and use payment security tools at checkout to verify / authenticate the cardholder is the legitimate owner of the payment card.
  • Take pictures of all the items on a delivery slip.
  • Including a detailed list checked with the order or sent digitally to customers upon delivery.
  • Require customers to pick up high value orders in person with payment card and / or ID as proof of purchase.

Gathering as much information as possible can serve as evidence when tackling unjustified disputes.

Some restaurants have switched to a card-on-file approach as part of their digital transformation. Typically, this involves linking an individual’s payment information to an online ordering / delivery service provider’s mobile app so that orders and payments can be made quickly. In these cases, companies can prevent friendly fraud by taking additional steps such as:

  • Match the cardholder’s billing address to the shipping address.
  • Match the email address of the cardholder and the mobile buyer.
  • Verification of the correspondence of known purchasing devices.
  • Correspondence of the last four digits of the registered payment card, as well as the CVV security code.

Technology is now available to track the delivery and placement of an order, which can provide customers with a better overall experience. This same detail can be used by business owners to dispute claims of friendly fraud.

Going forward with optimism

Managing partnerships with delivery service providers, order fulfillment, customer satisfaction, and friendly fraud mitigation can be difficult for small business restaurant owners.

Some should consider outsourcing this responsibility to a litigation representation service with expert staff to help recover unwarranted losses. Managing disputes internally is also an option, but it is important to enter and keep detailed records.

Many industry experts predict that pandemic behavior among consumers is likely to remain, such as the use of mobile wallets, contactless payment cards, and online shopping. This is important because consumer preferences often lead to a change in business practices.

The convenience of online ordering and food delivery is clear, as is the possibility of friendly fraud. Fortunately, this fraud can be identified and avoided so that businesses can continue on their journey to recover from the pandemic and adapt to new customer preferences.

[ad_2]

About Imogene T. Bishop

Check Also

How consistent communication can help revive the hospitality industry | modern restaurant management

In the wake of the pandemic-induced economic turmoil, the hospitality industry is suffering from labor …

Leave a Reply

Your email address will not be published.