Food delivery apps are facing a new fraud challenge: fake restaurants – not here to steal your personal information, but to serve you food that pretends to be offers from other stores.
The San Francisco Chronicle reported Thursday (April 9) that two sushi restaurants in San Francisco were using the names of legitimate businesses without permission to attract customers, according to The Verge.
A restaurant, now called Chome, opened for takeout and delivery at the location of Blowfish Sushi, a restaurant that closed in December 2020 after two decades in business. Initially, the new store didn’t change the logo or awning either, operating under the guise of Blowfish Sushi on delivery apps like Uber Eats, DoorDash, Grubhub and Postmates.
The other, SF Wagyumafia, took its name from the famous Wagyumafia, a sandwich shop located in Hong Kong and Tokyo. Without any brand affiliation, he advertised the store’s famous $180 wagyu sandwich, according to the chain, The Verge reported, citing the SF Chronicle.
DoorDash and Grubhub removed the two restaurants from their listings, and top Blowfish Sushi and Wagyumafias are considering legal action, according to the report.
“We have no tolerance for fault or misuse of the Grubhub platform,” Grubhub told The Verge. “We have a number of safeguards in place to prevent potentially fraudulent listings in our marketplace, and we are constantly improving our processes and testing new features to prevent these situations.”
Restaurants have made a massive shift to digital tools and operations over the past year. The volume of online food chain orders has increased 225% since the start of the pandemic, PYMNTS found in its December edition of the Mobile-Order Ahead (MOA) Tracker. By 2023, 54 million consumers are expected to use MOA apps.
But this change has led food fraud to become all the more sophisticated – although it’s usually restaurants that try to distinguish between real customers and scammers, as well as chargeback fraud, like these restaurants in Los Angeles.
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