We consider universal variable-to-fixed length compression of memoryless sources with a fidelity criterion. We design a dictionary codebook over the reproduction alphabet which is used to parse the source stream. Once a source subsequence is within a specified distortion of a dictionary codeword, the index of the codeword is emitted as the reproduced string. Our proposed dictionary consists of coverings of type classes in the boundary of transition from low to high empirical lossy rate. We derive the asymptotics of the ε-coding rate (up to the third-order term) of our coding scheme for large enough dictionaries.