'Pizza plug' scams con Lexington businesses out of thousands
Fifty dollars' worth of pizza for five bucks may sound like a bargain, but instead, you could end up in big trouble.
Business owners in Lexington say more and more they find themselves on the hook for thousands of dollars in costs and fees because of scammers using stolen credit card numbers to order pizza from them.
The whole situation could also get customers slapped with criminal charges.
"It's becoming a massive multimillion dollar industry using stolen credit cards," Christian Reisch, a Domino's franchisee who currently owns and operates nearly a dozen restaurants in central Kentucky, said of the use of 'pizza plugs.'
A quick search of 'pizza plug' on social media like
shows a seemingly endless list of accounts with some sort of variation on the name. Many of them offer major deals on food and gift cards from a number of restaurants and other businesses.
People communicate with the accounts through direct messages on social media, providing information like their name, address, city, state, zip code and phone number (information needed for food to be delivered) and then paying the 'pizza plug' through PayPal, Cash App or other mobile payment apps.
That is when business owners say they get ripped off, because the 'pizza plugs' use stolen credit card numbers to place the order online for the customer paying them directly. The scammers walk away with free cash, the customers get cheap food - and the business is hit with the loss.
"As a business owner, when you're losing thousands of dollars a month across your 10 stores, and you know your competition is losing just as much, and there are some campus stores that I've heard lose as much as $9,000 in a month to credit card fraud - it's getting out of control," Reisch said, "yet we're the only ones bearing the brunt of the cost."
The scam is not new, and it is not just happening in central Kentucky. 'Pizza plugs' have
. The difference now, Reisch says, is it is running rampant.
Not surprisingly, one of his stores had to deal with it on Super Bowl Sunday,
"We had a $60 order come in, four 15-piece orders of wings, along with a large pepperoni pizza," Reisch said. "And just after we sent the driver out on the road, we got a phone call from a customer in California who said, 'Hey, my credit card was just used in your store and I didn't place that order.'"
After Reisch talked with the Lexington customer who was supposed to get the pizza delivered, he says sure enough, they used a pizza plug.
Thankfully, Reisch said, they were able to void the order before it was delivered, helping them cut some of their losses that come in the form of processing fees and other costs (including royalties and advertising costs on each order paid to the corporation, and a charge back fee when the credit card charge is disputed), but they still had losses in the form of labor costs and food costs - all costs that quickly add up when it happens three or four times a month for each store Reisch owns.
So what can business owners do about it? Without a credit card owner being alerted to the fraudulent purchase and letting them know to stop it, workers say catching the activity in progress would be difficult. They say after the fact they can see where the pizza plug often has to try several different credit card numbers unsuccessfully before one works.
One of their only paths for recourse is to charge the local customer who orders through the pizza plug with receiving stolen property - a path that Reisch said is unfortunate, but one they will take to try to stop it.
Even with the fraudulent activity happening online, Reisch said he has been unable to get federal investigators to get involved to stop it at the source. Going forward he hopes social media companies and federal investigators will do more to take down fraudulent accounts and prevent businesses from being ripped off.