Chargebacks and Friendly Fraud Soar as Food Delivery and Pick Up Surge - Kount

The retail and hospitality sector have been hit hard by stay-at-home orders put in place to control the spread of the novel coronavirus. Eating out and vacations ground to a halt in the spring, and even with a resumption of outdoor dining in the summer and indoor service in some places at reduced capacity, analysts predict some traditional brick-and-mortar locations for retailers may not survive the continuing economic downturn.

One bright spot, however, has been food pickup and delivery. While stay-at-home restrictions forced many to stay inside over the last several months, consumers have turned to buying online and picking up food curbside, or to restaurant delivery services like DoorDash and Postmates, to get meals brought to their door. A 2019 eMarketer study found 38 million people in the United States used food delivery apps at the time. The same research predicted that the number of users will rise to 44 million in 2020. But, with so many now turning to food apps, that number will likely be even higher this year. As restrictions ease, e-commerce, in general, is growing at a slower rate than it did in the spring, but it is still elevated from pre-pandemic levels.

E-commerce fraud prevention firm Kount has been tracking the changes in e-commerce models and consumer demand caused by the pandemic and finds quick service restaurants that offer mobile-order ahead and other ways to order food online are showing significant growth year-over-year in digital channels.

“The pandemic has undoubtedly impacted e-commerce transactions, with some industries experiencing big changes in transaction volume. Some saw extreme growth in online transactions, while others experienced dramatic drop off in volume due to restrictions early on. For many industries, volumes remain elevated today, if not at the spikes from earlier this year,” said Rich Stuppy, chief customer experience officer with Kount.

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