How Quick Service Restaurants Can Prevent Fraud and Protect Profits in 2025

The U.S. restaurant industry will reach $1.5 trillion in 2025, with continued growth expected into 2026.1 But even as sales rise, quick service restaurants (QSRs) are grappling with an increasingly costly, often invisible threat: fraud.

Digital fraud, chargebacks, account takeovers, and other types of business fraud are becoming routine as criminals take advantage of industry digital operations that surged during the COVID pandemic. “Fraud isn’t just a risk, it’s a daily reality in this industry,” says Synovus Treasury Management Consultant Matt Farzanrad.

Restaurants lose 4%-5% of their profit to fraud each year, reaching up to $6 billion dollars annually.2 These losses are especially crippling to quick service restaurants that operate with slim margins. Recent incidents across the country demonstrate just how varied and costly restaurant fraud can be.

• In 2023, a ransomware attack on U.S.-based Yum Brands forced a one-day closure of 300 QSR franchises in the UK.
  
  
• An employee at Tacos Al Carbon in Palm Beach County, Florida, abused the restaurant’s payment system to transfer more than $38,000 to her personal account. Investigators uncovered 87 criminal transactions ranging from $100-$500.
  
  
• A small restaurant in Washington using Uber Eats for delivery services experienced a crippling account takeover. An unauthorized change to the business’ bank account details left the restaurant with $32,411 in unpaid orders.
  
  
• Golden Corral’s 2023 data breach exposed approximately 180,000 employees’ data, including Social Security numbers, driver’s license numbers, financial account credentials and health insurance details. The employees filed class-action lawsuits against Golden Corral.
  
  

Why are QSRs prime targets for fraud?

Consumers frequent QSRs because they’re fast and convenient. Unfortunately, these are the same characteristics that attract criminals. Real-time fraud detection is challenging for quick service restaurant chains that typically process high volumes of low-dollar transactions daily. In addition, operators — especially independents and owner-operated QSR franchises — often run on lean teams and don’t always have the bandwidth to regularly monitor accounts.

So, fraudsters execute criminal activities during busy periods when they’re harder to detect. Many quick service restaurants manage dozens of accounts across multiple locations and these bad actors expect their suspicious activity to go undetected.

Third-party ordering and delivery platforms are now essential for restaurants that want to be competitive — especially QSR franchises. For example, more than half of Millennials and Gen Z choose a restaurant based on the digital services offered.3

Rapid expansion of online ordering, QR codes, mobile wallets and loyalty apps created new entry points for fraudsters to access quick service restaurant systems. Store payment and rewards data, as well as digital coupons are popular targets. QSRs are also ideal environments for card testing.

Cybercriminals exploit vulnerabilities in these platforms, driving up rates of account takeover fraud and chargebacks.

Which cyberfraud schemes are QSRs most susceptible to?

Quick service restaurants are exposed to a range of cyber threats that put both their finances and reputation at risk. From account takeovers to gift card fraud, understanding these schemes is essential for operators who want to protect their businesses and customers.

• Account takeover (ATO)
  Account takeover fraud in quick service restaurants occurs when cybercriminals gain unauthorized access to customer accounts and steal payment information, loyalty rewards and gift card balances. Last year, credential reuse and gaps in mobile ordering fueled a 72% year-over-year ATO increase in QSRs. The schemes targeted over 130 brands.4
  
  
• Refund fraud and card testing
  Card fraud is pervasive and costly. In 2024, 62 million U.S. consumers experienced credit or debit card fraud with a $100 average fraudulent charge.5 Card issuers blocked 48% percent of the consumers’ fraudulent transactions, while 45% received a refund or reversed charges.6
  
  Fraudsters steal card information to test small, often overlooked transactions, before launching larger fraud schemes. In cases of “friendly fraud,” customers willfully denied legitimate charges or item delivery. Unfortunately, disputes rarely favor operators who are responsible for restaurant fraud or chargeback costs.
  
  
• Promotion abuse
  In this scheme, fraudsters stack coupons, reusing single-use codes or setting up fake accounts to obtain extra discounts. Five years ago, PayPal offered a sign-up bonus for new users. Fraudsters executed bots to create over 4.5 million fake accounts which cost the company millions in lost revenue.
  
  
• Gift card fraud
  Fraudsters purchase untraceable prepaid gift cards for QSRs to make illicit trading easier. In March 2025, year-over-year gift card fraud increased 125%.7
  
  
• GPS spoofing and route manipulation
  Cyber criminals falsify GPS information to artificially increase delivery charges, steal account data and create refundable orders for non-delivery to fake routes. They also use GPS spoofing to gain access to QSR apps and services with offer restrictions.
  
  
• Check washing and electronic deposit fraud
  Small restaurants and multi-unit operators who use manual or paper-based payment processes are persistent targets for mail fraud such as check washing. However, even digital transactions like electronic deposits are threats with limited staffing (common among QSRs) and fraud prevention measures.

Operators might be tempted to think restaurant fraud is inconsequential — $3 here, $20 there. However, for QSRs operating on margins of just 5–7%, small financial losses add up.

Fraudsters steal more than just revenue, but also time, energy and customer loyalty. Chargeback fees and dispute resolution consume staff time. Breaches or account takeovers disrupt service, delay vendor payments and damage brand reputation. Compromised customer data can lead to investigations, fines and legal exposure. Protracted legal disputes can extend over several years, often without any assurance of financial restitution.

Identify and stop restaurant fraud.

QSRs face unique challenges, including high volumes and fast transactions which make them more vulnerable to fraud. Adopting a structured fraud prevention plan early on is critical. “You can’t afford to only be reactive to restaurant fraud. Mitigating the risks requires vigilance,” says Head of Synovus’ Restaurant Finance Group Scott Tocci.

A comprehensive security posture for quick service restaurants combines continuous monitoring, layered access controls and ongoing staff training. QSRs can execute a three-part proactive strategy to help significantly reduce fraud exposure.

1. Understand your vulnerabilities.
   Conduct a thorough network and systems assessment, as well as payment processes for manual, paper-based or digital entry points vulnerable to exploitation. Regularly update systems and applications to continuously uncover suspicious patterns and weak spots. Establish consistent fraud awareness training to help staff recognize and mitigate vulnerabilities early.
   
   
2. Establish strong internal controls.
   Restrict network, system and account access to only what is necessary. To minimize the risk of error or misuse, employees should have only the permissions their roles require. Separate duties so that no single individual manages all aspects of financial transactions. For example, the employee issuing payments shouldn’t also approve receivables or reconcile accounts. Require dual approval for high-risk actions like adding a new vendor or wiring money.
   
   Incorporate daily account monitoring, as even a quick balance review can help spot irregularities early and prevent minor issues from escalating into serious problems. Ensure the organization complies with the Payment Card Industry Data Security Standard governing customer payment acceptance, processing, storage and transmission. Create a concise escalation plan so every team member understands their responsibilities.
   
   
3. Protect your assets and financial operations.
   Use powerful fraud prevention tools to safeguard your network, systems and devices. Separate and secure receivables and payables with sub-accounts to block unnecessary debits from store-level accounts. Consider a shared services model for outgoing payments to reduce access points and enhance control. Set up real-time alerts for large transactions, payee changes or logins at odd hours.
   
   Assign a point person to contact your financial institution’s fraud team to swiftly suspend compromised accounts when fraud is suspected. Enable positive pay and ACH blocks to intercept unauthorized checks or withdrawals before they impact business funds.
   
   Document and regularly review your organization’s fraud plan, ideally every quarter or anytime there’s a technology, vendor or business model change. Evaluate chargebacks and other potential fraud to improve your organization’s defenses.

It might be helpful to frame the concept of fraud prevention in familiar terms. Farzanrad likens the early approach to insurance. “You invest a little now to prevent lost revenue later,” he says. In fact, QSRs should purchase cybersecurity insurance to help defray costs related to breaches, ransomware and other attacks.

Get the expertise you need to strengthen your restaurant’s fraud defenses.

When you want to reduce restaurant fraud, experience matters. “We collaborate with owners, multi-unit operators and franchises every day to deliver scalable, affordable fraud prevention solutions,” says Tocci.

Synovus offers firsthand fraud consulting that includes account audits and structural redesigns. Our specialized Financial Crimes Unit prioritizes urgency and resolution when responding to client needs. For more information, complete a short form and a Synovus Treasury & Payment Solutions Consultant will contact you with more details. You can also stop by one of our local branches.

Scott Tocci is Head of Synvous’ Restaurant Finance Group. Tocci is experienced in direct lending to the restaurant sector, with expertise in working with franchisees, franchisors, owner operators and private equity groups across the country.

Matt Farzanrad is a Synovus Treasury Management Consultant at Synovus. Farzanrad’s expertise includes consumer lending, portfolio management, business relationship management and commercial banking.