Already Struggling Restaurants Are Facing Refund Requests from Shady Customers
One Los Angeles restaurant even cited a string of chargebacks—including a single order worth over $700—as the reason it's shutting down.
In early November, a customer placed one of the biggest online orders that Spoon by H had ever received. When Yoonjin Hwang, the owner of the Los Angeles Korean fusion restaurant, finished calculating the cost of the to-go orders, the four meat lovers combo meals rang up at $728.76.
According to the Los Angeles Times, Hwang texted the man directly to confirm the details of his order, and to ask for the make and model of his car so she could carry his $700 dinner out to his vehicle. He never responded. When the man arrived, he was driving a white van, and still wasn't into exchanging pleasantries. "I asked him if there was a big party for such a big order," Hwang told the Times. "He told me that it was his boss' baby's birthday party. I said, 'Thank you so much for your support.' He didn't respond."
A couple of days later, the Tock reservation and mobile order platform contacted Hwang to tell her that the customer was disputing the $728 charge, alleging that someone else used his credit card to place the order. She appealed the decision, but ultimately Tock essentially said Spoon by H was on the hook for all $728 bucks.
Although that was the biggest virtual "dine-and-dash" that Hwang has had to endure, it wasn't the first—and all of those disputed charges and chargebacks add up. This weekend, she made the decision to close Spoon by H permanently. "Although we put up our very best fight, we could no longer hold out against the growing barrage of fraudulent disputed charges and the countless refunds issued. We never expected the end of this incredible ride to come so suddenly," she wrote on Instagram.
"We spent hours upon hours fighting each claim and refund, until eventually they buried us. It was an unending, uphill battle every day that robbed us of time, energy, and resources we just couldn't afford. These cases became unbelievably frequent and they've somehow become so increasingly routine that it has made it impossible to continue to operate a business under these conditions. It's forced our hand to make this incredibly difficult decision."
Hwang isn't alone: according to the Times, this kind of fraud has affected already reeling restaurants throughout the city, and restaurants in other parts of the United States have reported an increase in chargebacks, alleged "missing" items, or requests for refunds for unjustified reasons.
Eddie Shin, the owner of A Cut Above butcher shop in Santa Monica told the Times that a customer placed a $600 order on January 6, and then followed up with a $1,300 order the next day. You know exactly where this is going, right? Because a couple of weeks later, A Cut Above was notified that the customer was disputing both charges. (Shin and shop manager Alice Mackenzie have since filed a police report.)
Eric Lipsky, the owner of Bell's BBQ in Henderson, Nevada, told KVVU that, despite double- and triple-checking every to-go order that leaves the restaurant, he still had 11 refund requests in January—and he had to cover the costs of all of them. "I can't tell whether it is a legitimate issue where we made a mistake or if someone is just trying to get a refund for the delivery service that they are using," he said.
And Brian Ingram, who owns several restaurants in Minneapolis and St. Paul, said that "several times a week" a shady customer will request a chargeback for food that was delivered or picked up. "All of us [in the restaurants] are like, 'Gosh I hope an office orders today,' and you get this great big order, and now you're afraid," he told KARE 11. "Is it a real order? Or are we going to get a chargeback on it?"
Back in Los Angeles, Hwang's story might have a slightly happier ending. A longtime customer set up a "Save Spoon By H" GoFundMe and, as of this writing, it has raised more than $70,000. But, perhaps understandably, Hwang says that she's not quite ready to jump back into the restaurant game.
"We were blown away by the GoFundMe donations we've received from our community and we still can't believe how blessed we are to receive this outpouring of support and encouragement," Hwang wrote in an update posted on the fundraising site. "We don't take a second of it for granted and the raised funds will go towards a new beginning for Spoon By H. Though we don't know exactly when or how or what our new beginning will look like, we hope to have the opportunity to serve you all."