Digital transformation has meant boom times for quick‑service restaurants (QSRs), but rapid growth has also opened the door to a surge in digital fraud. The industry is seeing a continued rise in scams, account takeovers (ATOs) and policy abuse across food delivery and restaurant apps, with fraud attempts increasingly concentrated in areas where transactions are instant and margins are thin. As a result, operational conversations now inevitably turn to sophisticated, rapidly evolving tactics that are creating new risks for restaurants and their customers, highlighting the importance of protecting customer trust.
The Hidden Costs of Doing Nothing
Treating fraud as a cost of doing business is no longer tenable. Card testing, chargebacks and gift card abuse have grown more frequent and complex and are no longer confined to eCommerce giants — QSRs are now prime targets. Card testing is particularly insidious: fraudsters run dozens of small transactions to verify whether stolen card data is effective, often below thresholds that would trigger manual review or customer concern. By the time patterns are uncovered, the damage typically manifests as lost revenue, angry customers and operational messes that are both difficult and costly to untangle.
Chargebacks, meanwhile, continue to erode restaurants’ margins, whether through stolen cards (third-party fraud) or customer disputes (first-party or “friendly” fraud). Even small amounts accumulate quickly and when investigation time, fees and lost goods are factored in, every dollar in chargebacks can cost a merchant several dollars overall. Promotional fraud and gift card abuse add further leakage, as attackers exploit loyalty incentives and digital gift programs, draining marketing budgets and disappointing loyal guests who find their balances missing.
Where QSRs Are Most Vulnerable
Today’s digital customer journey is riddled with blind spots. Fraud doesn’t just strike at the point of payment; vulnerabilities start at account creation — with fake registrations and promotion abuse — and follow through to login fraud and account takeover, culminating at checkout, where card testing and the use of stolen cards flourish. For brands relying on delivery aggregators, additional risks surface in the form of refund abuse, GPS spoofing and fake “item missing” claims, which are becoming a more mainstream issue for large food delivery platforms.
Legacy fraud tools, focused on manual reviews or delayed batch scans, simply cannot keep up with schemes that unfold in seconds, 24/7. Research from SEON’s 2025 Global Digital Fraud Report indicates that a majority of organizations are now moving away from static controls, with more than 60% adopting real‑time transaction monitoring and over three‑quarters investing in AI, machine learning and analytics to preempt fraud. Static defenses and fragmented point tools increasingly leave decision‑makers with partial views of risk while attackers move freely across channels.
From Point Tools to Transparent Intelligence
The answer lies in harnessing new technology, not more headcount. Modern fraud defenses are powered by AI and machine learning, drawing on hundreds of real-time data signals — device fingerprints, email legitimacy, IP velocity and more — to catch fraud as it happens without grinding customer experience to a halt. Customizable rules engines make setup and adaptation easy, allowing QSRs to respond dynamically to new attack patterns or operational needs — without a team of coders.
Critically, the most effective systems offer something that has long been missing: transparency. Automated decisioning that can be explained and audited builds trust with frontline staff and customers, giving leaders a sense of control and confidence. Turning declines and reviews into a clear and understandable process helps organizations feel more confident in their ability to defend decisions and maintain integrity.
From Reactive to Resilient
Quick-service brands must treat fraud prevention as an urgent, strategic initiative. Automated, real-time solutions let teams focus on delivering excellent service and building customer loyalty, rather than firefighting. Emphasizing proactive measures can inspire confidence that resilience and trust are achievable goals, thereby strengthening a brand’s reputation in a competitive market.
Industry-wide, there is a clear shift from a reactive to a proactive approach to resilience. SEON’s latest research finds that most organizations have increased their fraud prevention budgets and expanded fraud teams in response to rising digital abuse, reflecting recognition that fraud can put several percentage points of revenue at risk when indirect costs are included. For QSR leaders, the takeaway is straightforward: as fraudsters innovate, so must their defenses. The right blend of technology, data and operating model can turn fraud from a recurring crisis into a strategic advantage.
Enterprise-Risk Management
This isn’t just about fraud; however, it’s about connecting operational, cybersecurity, financial, insurance and employee practices so that vulnerabilities are identified and patched before bad actors exploit them. As the new year approaches, leading QSRs must conduct regular, comprehensive assessments of both digital and physical assets, updating their risk mitigation plans as threats and technologies evolve.
When it comes to delivery fraud and refund abuse, the most resilient QSRs employ a combination of practical and technological tactics, including photo verification of delivered orders, tamper-evident packaging, driver GPS logs and real-time claim pattern detection. Establishing clear escalation paths, collaborating with delivery aggregators and sharing fraud data with partners can help prevent refund losses from spiraling out of control while preserving the genuine customer care gestures that genuine guests still expect.
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