A popular dining discount app called EatClub has created an unintended loophole that allows employees to profit from client lunches and other work-related meals by claiming full reimbursement for discounted expenses, according to an investigation by the Daily Mail.
The app, which offers real-time discounts of 20 to 50 percent at participating restaurants and bars, functions by applying discounts in the background after a diner pays through the app. This results in the diner receiving a receipt for the full, non-discounted amount, which can then be used to claim reimbursement from an employer.
Reporters for the Daily Mail successfully tested this system at a Melbourne restaurant. They ordered food and drinks, paid via the EatClub app, and received a receipt for the full cost of $219.60. The accounts department promptly approved the reimbursement claim. However, $48.53 of the total bill was discounted through the app, allowing the reporter not only to dine for free but to pocket the difference.
The loophole also extends to situations where colleagues split bills, enabling an EatClub user to pocket discounts from unsuspecting co-diners. The app's payment process appears identical to standard mobile credit card transactions, making it difficult for waitstaff to detect the discount.
EatClub, backed by celebrity chef Marco Pierre White, was originally designed to help restaurants fill tables during quieter periods. The app has rapidly expanded across Australia and into the UK.
However, some restaurant owners have expressed concerns about the app's impact on their businesses. They report feeling pressured to join to remain competitive, leading to dependency on the app and shrinking profit margins. Some venue owners have also noted customers misusing the system by bringing more people than a voucher allows, resulting in financial losses for the establishments.
"We are on it but we don't like it. It's actually costing us money to be on it but if we don't we'll lose business completely," a co-owner of a large Melbourne hospitality group told the Daily Mail, requesting anonymity for fear of being 'blacklisted' by app users. This owner added that they fear being forced to offer discounts during peak hours, which is unsustainable for small to medium businesses.
Another restaurant manager recounted instances where customers exploited the system, sometimes to defraud employers and other times to dupe friends who were unaware of the app's discounts. The manager noted that restaurants often face pressure to honor discounted vouchers even when rules are broken, and that disputes over refunds can be time-consuming.
Regarding potential tax implications, the Australian Tax Office (ATO) stated that client lunches are typically considered entertainment expenses and are not deductible. The cost of food and drink during normal work hours is viewed as a private expense and is also not deductible. The ATO emphasized that taxpayers must keep accurate records and can only claim deductions permitted by law, warning that false or misleading claims may lead to compliance action.
The Daily Mail reached out to EatClub for comment but received no response. The publication clarified that EatClub is not accused of wrongdoing and that the article examines how the app's receipts might be misused for employer reimbursements. The Victorian Chamber of Commerce and Industry did not respond to inquiries about the app's potential for misuse.