As 2021 nears its final quarter, the restaurant industry continues to be tough to predict. At the beginning of the pandemic in March 2020, lockdowns and mandates gave little room for options when it came to operating a restaurant and serving customers. The lockdowns were intense but restaurants responded with downsizing, closing down dine-in areas and relying heavily on food delivery services. Impacts of the pandemic were undoubtedly significant, but the hope of a very temporary pandemic kept the human spirit alive.
Now that it’s been 18 months since the initial lockdowns, the idea of a temporary pandemic is fleeting.
The economic damage alone now impacts daily lives as well as any particular variant causing intermittent surges in COVID-19 cases. An ongoing labor shortage continues to add pressure to most industries and the volatile restaurant industry is right in the middle of it all. Many restaurants have moved back to full-capacity as customers grow eager to dine-in once again, but the transition has only exposed a growing labor crisis. Staffing is now top concern while restaurants are challenged with managing consumer demand.
But it’s no surprise how comfortable the idea of food delivery services has become, and the services remain a strong option to this day for consumers. Restaurants have benefited from their ability to provide a pandemic-safe link to consumers without requiring more employees, but the services have been known to carry their own risks. Particularly the risk of handing a prepared order to a non-employee for delivery has pointed restaurant owners to the reality of increasing chargebacks.
Chargebacks have been a growing problem for restaurants over the years and can be broken down into types of criminal fraud, merchant error and friendly fraud.
The bulk of the chargeback concern, however, is linked to friendly fraud, which is simply a consumer disputing a charge for any reason other than criminal fraud or a missing food order. Disputing a charge through a third-party app is easy, and there’s no requirement to pick up a phone and wait on hold to talk to a restaurant manager. The risk of friendly fraud occurring in restaurants with staffing shortages increases exponentially when fewer employees are checking for quality and also are not regularly checking statements for chargebacks.
But as restaurants have proven adaptability in pandemics, there are some easy ways to lower friendly fraud chargeback risks. If you're uncertain about how friendly fraud is impacting your business, check out our latest white paper with helpful facts and tips on how to identify and stop friendly fraud.