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How Restaurants Can Prevent Fraud

posted on: Fri Aug 17 2018

As people spend increasingly more time at work and out-of-the home on a daily basis, restaurants, (specifically Quick Service Restaurants (QSRs)), have become the choice du jour for an affordable, consistent bite. Unlike fine dining where patrons intend to linger and relish the experience, the name of the QSR game is “quickness and ease.”

Patrons want their experience to be simultaneously fast and seamless, so it’s no surprise that QSRs have rushed to offer app and e-commerce options in recent years. As Kount’s CEO Brad Wirskirchen put it, “now, you go into a restaurant, and you can pay with your app, or you can order it on your app and then go curbside and pick it up, or you can order it on your app and have it delivered to your home.”

But in addition to the many benefits that accompany a digital transformation comes an increased risk of fraud—the consequences of which fall on both customers and restaurants themselves.

The risks for businesses are twofold—there is an obvious monetary risk of fraud; a fraudulent transaction is not legitimate and therefore the business will take a loss each time it happens. But there is another significant way that fraud hurts a restaurant's bottom line – a PR disaster related to fraud can be just as, if not more damaging to public brand perception than a norovirus outbreak, supply chain issues or general food safety concerns. 

For the sake of example, imagine that your favorite lunch spot leaked customers’ loyalty card information and data. These are tools easily abused by fraudsters to commit card-not-present fraud. Consumers want to have peace of mind when creating a login for digital checkout, and happily reap the benefits of new digital ordering perks, like skipping the line.

On the other side, restaurants engaging in commerce, via mobile devices or online, must be able to know for certain that they're dealing with a real customer, not a fraudster. In a not so distant past perhaps that meant checking for counterfeit bills, but today, quick service restaurants that deal with the sheer volume and variety of order methods must utilize more sophisticated methods to combat fraud.

This is why it’s important to take precautions and implement technology that detects and prevents fraud at the transaction level, before payments and data are compromised. To learn more, check out the eBook "Quick Service Restaurants Take Mobile App Fraud Off the Menu".

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