Food Fraud

21 June 2023

It’s important to be cautious when dealing with large food orders that are cancelled, especially when someone requests a refund on their credit card. While legitimate reasons for cancelling an order and seeking a refund can certainly exist, there are potential scam situations to be aware of. Here are a couple of scenarios to watch out for:

Refund Fraud: In this scenario, a scammer intentionally places a large food order, pays for it using a stolen credit card, and then cancels the order shortly after. They will then contact the restaurant, posing as the cardholder, and request a refund to be issued to their own credit card. If the refund is processed before the stolen card is reported, the scammer essentially pockets the money while the restaurant incurs the loss.

Phishing Attempts: Scammers might try to obtain sensitive information from the restaurant by posing as a customer who cancelled a large order. They may claim that the restaurant charged their credit card incorrectly and request a refund, but ask for card details, such as the card number, expiration date, or CVV code, to process the refund. Providing such information could expose the restaurant to potential fraud, as the scammer could misuse the card details for unauthorized transactions.

To protect your business from potential scams, consider implementing the following measures:

Payment Verification: Ensure that you have proper payment verification processes in place, especially for large orders. Verify the authenticity of the payment method, and be cautious if the credit card information or transaction seems suspicious.

Refund Policies: Establish clear refund policies for cancelled orders and communicate them to your customers. Verify the identity of the person requesting the refund and follow standard refund procedures to minimize the risk of fraudulent requests.

Customer Communication: Exercise caution when discussing sensitive information over the phone or via email. Authenticate the customer’s identity by asking specific questions related to the order or requesting verification using alternative methods.

Fraud Prevention Tools: Consider using fraud prevention tools or services that can help identify potentially fraudulent transactions or provide additional security measures for online orders.

By implementing these measures, you can reduce the risk of falling victim to scams while maintaining the integrity of your business operations.

Download this post in PDF form and put it in your Comox Valley Restaurant training tool kit.

See Your Business Here!

Would you like to add your business to our site? It’s FREE! Please click the button now.