Skip to main content

Main navigation

Kount | An Equifax Company
Why Kount
Why choose Kount
Why choose Kount

Learn about our unique approach to trust and safety.

What makes us differentchevron_right

autorenew
Complete strategy

Protection against any threat in one platform

analytics
Robust data

Decades of global data collected from dozens of industries

speed
User dashboard

Intuitive platform with customizable reporting

star
Machine learning

Accurate decisions made with advanced artificial intelligence

fact_check
Business policies

Fully customizable policies for trust and safety decisions

settings
Automation

Reduction of time-consuming, error-prone processes

Features
Innovative features
Innovative features

Find out how our industry-leading features can benefit your business.

Explore Kount featureschevron_right

Identity
lightbulb
Consumer insights

Improve marketing campaigns and customer experiences

fingerprint
New account fraud prevention

Keep fraudsters out of your ecosystem

switch_account
Account takeover prevention

Protect customer accounts and reduce friction

Payments
policy
Fraud detection

Stop threats and improve business operations

request_quote
Chargeback management

Prevent chargebacks and recover revenue

account_balance
Authorization optimization

Reduce false positives and approve more transactions

Compliance
language
Global watchlist search

Identify known individuals on government watchlists

assured_workload
Regulatory reporting

Collect, monitor, and track data across a portfolio

fact_check
Customer due diligence

Screen customers for potential risks

Industries
Solutions for all industries
Solutions for all industries

Learn how Kount solves the challenges specific to your industry.

Explore industry solutionschevron_right

sanitizer
Health and beauty

Grow brand awareness while reducing resale activity

monitor_heart
Health care

Protect medical records and access to patient portals

school
Online learning

Expand learning offerings and improve revenue

sports_esports
Online gaming

Provide secure gaming experiences

restaurant
Restaurants

Accept more good orders while minimizing risks

connected_tv
Streaming services

Decrease account sharing and artificial streaming

point_of_sale
Direct sales

Stop promotion abuse and affiliate account fraud

car_rental
Automotive rentals

Deploy safeguards at every step of the rental process

Resources
Kount Resources
Kount Resources

Check out our educational resources and learn more about Kount.

Browse resourceschevron_right

Education
rss_feed
Blog

Educational articles and guides

summarize
Case studies

Client testimonials and success stories

cast_for_education
Videos, reports, guides, and news

Resources to safely grow your business

User Resources
support_agent
Support

Technical product support

code
Developer tools

FAQs, updates, and resources

Meet the Team
calendar_month
Live events

Trade shows and industry events

flag
About Kount

Who we are and why we do what we do

star_purple500
Careers

Join the team

Partners
handshake
Partner program

Opportunities to partner with Kount

login
Partner portal login

Access your Kount dashboard

Pricing
Log in
Why Kount
Features
Industries
Resources
Pricing
Log in
Request a demo
menu
Request a demo

7 Fraud Schemes Targeting Restaurants and QSRs

Online ordering, mobile apps, and delivery services are all excellent ways to increase revenue for your quick-service restaurant (QSR). And you’ve probably noticed a surge in sales as customers embrace your innovation.

But some of those sales are likely from restaurant fraudsters and opportunistic customers looking for ways to take advantage of you. And they can introduce a lot of fraud risks you may not be fully aware of yet.

Kount hexagon background
Restaurant Fraud Prevention
Kount hexagon background

From Card Testing to Social Engineering

Even if you have noticed suspicious activity, such as an increase in chargebacks or a wave of new account creations during promotional periods, you probably haven’t realized how big of a risk these threats pose. 

Because there are seven dangerous fraud schemes that your restaurant can easily be exposed to.

Kount hexagon background
Mobile pay with credit card and bell

1. Card Testing

When fraudsters obtain stolen payment information, they usually test it to see if the account is still active. They do this by making small purchases to see if the payments are accepted. 

Fraudsters love using QSRs to test the validity of stolen payment cards because it’s not unusual for a typical customer to make more than one purchase from you in a day.

Plus, fraudsters can test thousands of cards at a time without putting in a ton of effort. All they have to do is program a network of computers (botnets) to run low-value transactions to verify if a card works. 

Once they find valid cards, fraudsters will probably move on from your business and make larger purchases somewhere else. But they’ll leave you with the chargebacks from all the test purchases they made to your restaurant. And that could put your merchant account at risk.

If you notice a large number of transactions with a high authorization decline rate, it may be that fraudsters are submitting orders on cards that have already been flagged as stolen. And without fraud controls in place to catch botnets, this scheme can turn into an expensive problem fast.

privacy_tip

Pro Tip

It’s difficult to monitor low-dollar transactions, especially when several come through at once. But you want to look for the ones with high decline rates. Fraud technology specifically designed to detect card testing and botnet attacks can automatically look for those patterns and decline or flag them for you.

Kount hexagon background
Gift card

2. eGift Card Fraud

Electronic gift cards are heavily targeted because fraudsters can easily turn them into cash. Typically, fraudsters buy electronic gift cards with stolen payment cards. They’ll often purchase thousands of dollars’ worth of digital gift cards, then sell them online at a discount. 

When cardholders see unauthorized charges to your restaurant on their statements, they’ll call their bank to dispute the charges. Then you’ll be responsible for all those chargebacks. And they add up quickly.

privacy_tip

Pro Tip

Start asking for a buyer or recipient’s name, address, or email to help match the identity of the gift card buyer with the payment information. Additionally, you can implement a fraud solution that analyzes customer data, such as the creation date of an email address, to help determine if a gift card purchase is coming from a legitimate customer.

Kount hexagon background
Credit card security

3. Account Takeover

Customer accounts are huge assets for fraudsters, especially if they come with loyalty rewards points. And it usually only takes a couple brute-force or credential stuffing attacks for fraudsters to crack into your customers’ accounts.

Once fraudsters gain access to these accounts, they can steal the loyalty points by redeeming them for money or transferring them to another account. They may even change the account passwords so that they can sell the accounts online.

But a bigger risk is that fraudsters may also access the account holder’s card information, digital wallets, and other payment methods linked to the account. And they can use that payment information to make fraudulent purchases elsewhere.

It can be difficult to detect this kind of fraud scheme because you usually don’t see chargebacks. But it’s extremely upsetting for your customers and can ruin your business’s reputation. And it can waste a lot of your employees’ time trying to clean up the damage done to your customers and their accounts.

privacy_tip

Pro Tip

Your best defense against account takeover is using fraud technology that can monitor account login activity — such as location, device used, IP address, etc. Anything unusual will be flagged. You can also customize the technology to implement multi-factor authentication when activity seems suspicious to further stop fraudsters from breaking into accounts.

Kount hexagon background
Reading ipad

4. Promotion Fraud

Offering sign up bonuses or discounted food items are great ways to bring in new customers. Unfortunately, these promo offerings also attract a lot of fraudsters and opportunistic customers.

Fraudsters and customers alike will abuse promos by signing up for multiple accounts with different email addresses, manipulating promo codes to get more use out of one-time discounts, or cracking referral codes to stack discounts.

When you get hundreds of new account sign ups from a promo, it may look like you’re gaining tons of new customers. But the reality is, you may be wasting money on customers who won’t stay in your ecosystem. Plus, manipulated codes can cost you a lot in lost revenue and products.

privacy_tip

Pro Tip

You can carefully monitor your promotions — evaluate the number of discounts or codes given against the revenue you earned. But that may take time, and you may not discover fraud until months after the promotion has ended. 

A better option is to implement fraud technology to take the guesswork out of the equation. A fraud detection solution can look for characteristics that seem suspicious — like multiple emails from the same IP address, device, or delivery address — to help you detect and block this kind of scam.

Kount hexagon background
Desktop Computer

5. Friendly Fraud

Friendly fraud differs from other types of fraud schemes in that it is a legitimate customer who commits the fraud rather than a criminal. It happens when a customer contacts the bank to dispute a purchase, and the reasoning for the chargeback is invalid. 

For example, maybe the customer just wants a free meal, so they make a false claim that they never received their food or the order was incorrect. Or maybe a child gets a hold of their parent’s payment card and makes a large order.

privacy_tip

Pro Tip

Technically, a legitimate customer made a valid purchase, but you can’t take back eaten food. So you have no way to recuperate losses when customers want a refund for their meals. But you can fight invalid chargebacks. If you win, you’ll get your money back.

Kount hexagon background
Desktop warning

6. New Account Fraud

Fraudsters commit new account fraud when they create new accounts with the intent to commit fraud without being detected. They use stolen identities or create synthetic identities using a combination of real and false information. Even good customers can perpetuate new account fraud using multiple email addresses or aliases.

Typically, fraudsters and opportunistic customers open a bunch of new accounts to take advantage of free trials, first-time-user discounts, and referral bonuses. And this influx of new accounts may look like positive growth. But these new accounts are risky and you get no return on investment — no repeat customers.

 

privacy_tip

Pro Tip

Even though they involve some risk, promotional offerings are important for growing your business. So it’s vital that you implement a strategy to verify account credentials like email, address, or name are current and match the identity of the user signing up for an account. And fraud technology can help you verify a user’s credentials by analyzing these data points against a global network of data.

Kount hexagon background
Receipt

7. Social Engineering

Your restaurant’s greatest asset isn’t always the food — it’s usually the data. And fraudsters want it. They’ll go to great lengths to steal it with social engineering scams. Social engineering happens when a fraudster or opportunistic customer manipulates an employee to get goods or gain access to a secure system.

One way fraudsters will target your restaurant is by researching your vendors and inbound shipments. Then they’ll send fake invoices. And you wind up paying the fraudster before you get the real bill and discover your mistake.

But often, they go after your company data by posing as an HR representative or tax official. Or they target your employees by sending phishing emails directing them to a fake website that prompts them to input their credentials. 

As a result, you can suffer from data breaches, compromising your customers’ payment and personal information. And this problem often goes unnoticed until it’s too late.

 

privacy_tip

Pro Tip

Teach your employees about social engineering scams and have policies in place so they know how to respond if they suspect an attack. And make sure they are well-trained in account security protocols so they never unknowingly share their password credentials with a fraudster.

Protect Your Business and Save Revenue

Fraud is inconvenient. There are so many ways that fraudsters, and even customers, perpetuate fraud. It’s difficult to understand the different threats and recognize them when they happen. Plus, managing fraud takes time and resources away from what you do best – serving your customers and running a great business. 

But in today’s digital world, fraud management is a necessity. And on your own, it’s incredibly difficult and expensive to do right.

That’s where fraud expertise comes in. Kount is a fraud detection and prevention technology that has helped restaurants like yours reduce risk and increase revenue — with the highest ROI possible.

Kount’s Average Results for QSRs

Kount’s Average Results for QSRs

We understand the challenges unique to your business. And we can help you solve them all. Plus, our fraud experts will be there to guide you every step of the way.

PetMeds
GNC
BodyBuilding.com
Kinder Beauty
Fetch
eharmony
AMC Theatres
Cineplanet
Book Depot
CD Baby
Drop-in Gaming
Jagex
The Source
Getty Images
Brooks
U.S. Polo Assn
Inspire Brands
J.R. Dunn
Mall of America
ClickBank
Central Restaurant Products
JP Morgan Chase
Moneris
Barclays
Conekta
BlueSnap
Nexio
NMI
Shift4
Sticky.io
Recurly
Shopify
Salesforce
WooCommerce
Magento
BigCommerce

Sign up for a demo and let us show you how Kount could benefit your restaurant.

Get started

Footer

Kount | An Equifax Company

Kount is trust and safety technology.

We deliver confidence in every interaction.

  • Twitter Twitter
  • Facebook Facebook
  • Instagram Instagram
  • LinkedIn LinkedIn
  • YouTube YouTube
SUPPORT
Log in
Developers
Pricing
Support
COMPANY
About Us
Careers
Events
News & Press
Partner With Us
TRENDING
Kount 360
Fraud Detection Software
Chargeback Management
Consumer Insights
Terms of Use
Compliance
Privacy
Privacy Policy
Equifax

©2023, Equifax Inc., All rights reserved. Equifax and the Equifax marks used herin are trademarks of Equifax Inc. Kount is a trademark of Equifax Inc. Other product and company names mentioned herin are the property of their respective owners.

close

Request a demo

close