Food delivery apps face a new challenge in fraud: fake restaurants — not here to steal your personal information, but to serve you food that impersonates other stores’ offerings.
The San Francisco Chronicle reported on Thursday (April 9) that two sushi restaurants in San Francisco have been using the names of legitimate businesses without permission to attract customers, according to The Verge.
One restaurant, now called Chome, opened for takeout and delivery in the location of Blowfish Sushi, a restaurant that closed in December of 2020 after two decades of business. Initially, the new shop 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, borrowed its name from the renowned Wagyumafia, a sandwich shop with locations in Hong Kong and Tokyo. Without any affiliation to the brand, it advertised the shop’s famous $180 wagyu sandwich, according to the chain, The Verge reported, citing the SF Chronicle.
DoorDash and Grubhub have removed both restaurants from their listings, and the original Blowfish Sushi and Wagyumafias are considering legal action, according to the report.
“We have no tolerance for misconduct or misuse of the Grubhub platform,” Grubhub told The Verge. “We have a number of safeguards in place to prevent potentially fraudulent listings on 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 last year. Online order volume from food chains increased by 225 percent since the beginning of the pandemic, PYMNTS found in its December edition of the Mobile-Order Ahead (MOA) Tracker. By 2023, 54 million consumers are expected to be using MOA apps.
But the shift has led food fraud to become all the more sophisticated — although usually, it’s the restaurants trying to distinguish between real customers and fraudsters, as well as navigating chargeback fraud, like these restaurants in Los Angeles.
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