Digital food and delivery businesses experience continuous growth and change, and with that comes a side of surging fraud threatening profits and customer trust. The digital dining space is notoriously dynamic, with fraud that fluctuates by the season. Tracking those changes along with other fraud trends and data is a necessary part of effective risk management, providing insight into performance and allowing for proactive, predictive mitigation.
That’s an especially valuable edge for QSRs, which typically process transactions (and entire user journeys) in a matter of minutes or seconds. Sift’s Fraud Industry Benchmarking Resource (FIBR), an interactive tool enabling businesses to compare their own fraud rates against industry benchmarks, delivers exactly those insights, with options to compare payment fraud, account takeover, and chargeback rates by industry and region.
Rising Refund and Promotion Abuse
The food and delivery sector’s Q2 payment fraud rate stands at 3.1% in FIBR, with fraudulent chargebacks at 0.048%. Both numbers are trending down compared to Q1 of this year, but represent a typical valley in QSR fraud: once the elevated fraud surrounding start-of-year promotions and account creation subsides, and security teams have recalibrated, fraud tends to slow down. At least, until the summer months, when new promotions and releases go live.
A significant portion of fraud in the food delivery space stems from refund and promotion abuse: MRC’s 2025 Global eCommerce Report found that first-party fraud, where customers claim issues like missing or poor quality items to receive unwarranted refunds, sits in the top five threats experienced by 90% of providers. In fact, panelists in the ‘Global Payments & Fraud Survey’ session at MRC Vegas 2025 speculated that the global first-party fraud rate is very high, between 60-80% of total fraudulent chargeback disputes. In 2024 alone, these types of disputes cost the industry an estimated $103 billion.
Similarly, chargebacks present a dual problem for food and delivery merchants: they result in direct financial losses for the business, and they damage relationships with payment processors. The average chargeback rate for food delivery and quick-service restaurants (QSRs) is at 0.048%, which is just shy of the industry average—but providers have to be wary of ballooning disputes, since exceeding certain thresholds leads to increased fees and stricter scrutiny from card networks.
Account takeover and fake account creation further strain the system. Anyone can easily create multiple accounts to exploit new user discounts, and in many cases, a single bad actor can be responsible for significant loss. Fraudsters have been known to leverage hundreds of fake accounts to exploit new user promotions, return hundreds of dollars in stolen deliveries for a healthy profit, and consume thousands of dollars worth of promotions in a matter of weeks. At that speed and scale, food and delivery merchants—already forced to process orders in seconds—often consider fraud a necessary cost of business, even when losses are mounting with no end in sight.
ATO, Credential Stuffing, and Credit Card Fraud Dominate
Account takeover and fake account creation further strain the system. Digital criminals use stolen credentials to access user accounts and place fraudulent orders, drain loyalty points and gift cards, and hijack customer promotions. Anyone can easily create multiple accounts to exploit a business, and a single bad actor can be responsible for significant loss: in some cases, one fraudster has created hundreds of fake accounts to consume thousands of dollars worth of promotions in just a few weeks. At that speed and scale, food and delivery merchants—already forced to process orders in seconds—often consider fraud a necessary cost of business, even when losses are mounting with no end in sight.
Stolen credentials are regularly sold on the dark web in conjunction with compromised payment methods and other data, making for a lucrative marketplace of exposed information. The lack of two-factor authentication on many QSR platforms, coupled with the speed of transactions, makes the issue especially difficult to manage.
Credential stuffing—automated login attempts using stolen credentials—is a major driver of these account takeovers. Bots can test thousands of credential combinations across multiple platforms in minutes, exploiting weak or reused passwords to gain access. Fraudsters not only test the login credentials, but once inside, can also check balances, credit cards on file, and the date of an account’s most recent order. They can place high-volume orders, reroute deliveries, or steal stored payment data. For food and delivery platforms that lack real-time bot mitigation or behavior-based detection, credential stuffing attacks can overwhelm infrastructure and create long-term trust issues with legitimate customers.
Credit card fraud currently accounts for 99.6% of fraud incidents in the food & delivery space according to FIBR, highlighting downstream fraud as an expensive symptom of ATO. While manual review rates have decreased slightly in previous months to 0.026%, they’re not an ideal indicator of true risk in a space where human oversight for every transaction is an impossibility. That’s a reality that won’t change, and because fraud tactics will never stop evolving, businesses have to take a proactive approach to risk management that’s both flexible and sustainable.
The Currency of Trust
Refining security measures is only one pillar of customer trust. It’s equally important to deliver user experiences that meet high expectations for speed and ease. Overly stringent security protocols deter trusted customers and lead to cart or brand abandonment, and the protection they offer against fraud is rarely outweighed by the cost of low order acceptance, dropped transactions, and decreasing lifetime value.
These challenges are inspiring businesses to turn to advanced trust and safety platforms, AI-powered ML models and algorithms, and solutions that can detect unusual behavioral patterns in real-time. The ability to pinpoint risk with precision also allows businesses to accept more transactions with confidence. Along with other strategies like implementing resilient identity verification processes, requiring PINs for order pickups or deliveries, and educating customers about common scams, food & delivery brands reduce the risk of fraud with every step taken to adapt alongside emerging threats.
But what truly sets successful food and delivery platforms apart is their ability to balance strong protection with instant gratification—identifying legitimate customers without friction, and stopping bad actors before they cause financial and reputational damage. Proactively tracking and benchmarking fraud rates clarifies where and when risk is highest, helping food & delivery platforms make smarter decisions about friction and overall operations and in turn, strengthening brand equity and customer trust.
Visit FIBR to compare your company’s payment fraud, account takeover, and chargeback rates to Sift global industry benchmarks.
This article originally appeared in RestaurantDive’s Trendline.
