CHAMPAIGN, IL (Chambana Today) – Several Champaign-Urbana restaurants, including Sun Singer, Suzu’s Bakery, and Sushi Siam, are seeing a surge in fraudulent online orders—forcing at least one to halt its delivery and online payment services.
Rick Carbaugh, manager of Sun Singer, described a growing trend of “friendly fraud. Customers place an order online, receive their food via delivery or pickup, then falsely report to their credit card company that they never received the order—resulting in a chargeback to the restaurant.
Since January, Sun Singer has lost over $1,100 through this scheme. As a result, the business has suspended all delivery and now requires customers to pay in person at pickup. Carbaugh says the dispute process is stacked against restaurants. “In-person disputes win about 30% of the time for merchants, but online disputes are a total loss—100% of the time. The process to dispute fraud is not merchant-friendly.”
The restaurant is currently protesting 11 chargeback cases and has already lost two. To make matters worse, each fraudulent chargeback also hits the business with an additional $15 fee, and could lead to higher credit card processing costs due to increased risk.
Carbaugh encourages any other local business impacted by this type of fraud to reach out. “When venting about this issue on social media, we had the immediate reaction from Suzu’s and Sushi Siam. We know other businesses are experiencing this type of fraud.” Sun Singer is working with the credit card fraud officials to address their issues. If your business has experienced similar fraud, contact Rick Carbaugh at Sun Singer at 217-351-1115.