Pandemic drives 68 percent increase in month over month in chargebacks
APRIL 27, 2021 – AUSTIN, TX - Restaurant Marketing and Delivery Association (RMDA) announced today the selection of TrueAccord as the organization’s digital debt collection agency. The RMDA represents 700+ independent local restaurant delivery companies, which are a part of the $40 billion takeout and delivery industry. According to figures from MyChargeBack, a fund recovery firm, there was a 68 percent increase in charge-backs month over month between February and April 2020 for low dollar (less than $5,000) transactions. This staggering jump in charge-backs is most likely attributed to the pandemic.
All of the RMDA members have access to TrueAccord’s collection tools for a minimal recovery rate. In turn, the restaurant partners can recover the money owed for every meal ordered.
“The restaurant delivery industry, especially local independent services, is more vulnerable because they are less equipped to recoup losses. Many restaurants and delivery services may not even realize for some time they are a victim because the chargeback amount for a food order is typically low, in the $30 to $80 range,” stated Andrew Simmons, President of RMDA. “It’s like shoplifting, but as a digital dine-and-dash. The buyer gets a meal and skips out on the bill by filing a chargeback. Fraudsters perpetrate this scheme because it’s easy with no apparent recourse.”
Chargebacks are a kind of forced payment reversal facilitated by a cardholder’s issuing bank. The customer goes to the issuing bank, claims a transaction was fraudulent or had some other issue, and the bank overturns the sale on the cardholder’s behalf. These chargebacks typically originate from a legitimate purchase, and then later the person files a chargeback without a valid reason because the food order was delivered, accepted and properly authorized by the cardholder.
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Founded in 2013, TrueAccord’s data-driven debt collection platform is disrupting the collections industry by helping businesses collect more debt online than traditional methods. TrueAccord’s platform is powered by machine learning with a decision engine that analyzes consumer behavior and delivers personalized and empathetic consumer experiences. By communicating at the right time in the right channel with payment options that meet consumer needs, TrueAccord provides exceptional recovery rates for top 10 financial institutions, debt buyers, lenders, and technology companies. TrueAccord empowers many of the estimated 77 million consumers who are in debt every year to get on a path to better financial health. To learn more, go to http://www.trueaccord.com.