The Holiday Season Is Coming … And So Are the Online Fraudsters

With summer a distant memory and the kids back in school, it’s time to look ahead to the last few months of 2019. For retailers and many other businesses this will mean preparations in earnest for the busy holiday season. Stretching from Thanksgiving and across the Black Friday weekend to Christmas and Hannukah, it’s the busiest and most lucrative time of the year for many merchants. But it’s also a blockbusting revenue-generator for online fraudsters ready to take advantage of distracted retailers. 

As part of their preparation for the coming sales tsunami, retailers should consider new data-centric tools to provide the insight they need to support improved, automated decisioning. 

Some Classic Scams 

Just as the holiday season demands months of preparation by legitimate businesses, the bad guys will have been gearing themselves up for some time to capitalize on the busy shopping period. They will be hoping to make some easy money while retailers are focused myopically on maximizing sales. They know there’ll be more customers and more transactions than usual, making it potentially harder to spot the fraudulent ones. And they know that some retailers may raise their limits on how much they allow customers to spend on a single transaction, in order to drive profits. 

Specifically, retailers should be aware that they may be at risk if they offer the following: 

  • Gift cards and other digital goods – given how easy it is for fraudsters to get hold of stolen card details, it’s no surprise that they will be pulling out all the stops this holiday season to monetize that data as quickly as possible. Digital goods are a quick win as delivery is immediate and online resale of any fraudulent purchases is relatively straightforward.
  • Special promotions for new account sign-ups. Many retailers may look to grow their customer base ahead of the holiday season by offering inducements. However, they should also be on the lookout for fraudsters, who typically open multiple accounts to take advantage of any offers and those whose identities they are using.
  • Buy Online Pickup In-store (BOPIS), or Click & Collect, is an increasingly popular option for shoppers who want the best of both worlds – online research and prices plus the option of picking up at their nearest store to avoid delivery delays and charges. However, this cross-channel innovation is under attack. Fraudsters buy goods online with stolen cards and/or identities and then request an in-store pick-up. Crucially this bypasses address verification checks and, when the item is picked up, stretched customer service staff may overlook identity checks, or be taken in by fake IDs. 

The Fightback Starts Here 

Fraud happens year-round, affecting all businesses to some extent. But given the importance of holiday season sales to the bottom line, it’s particularly important that businesses get smarter about how they track suspicious transactions at this time. 

Simility’s Adaptive Decisioning Platform is a machine learning-powered answer to sophisticated modern fraud. It takes in various data sources, before transforming and modelling it. Fraud teams are able to write, test and deploy manual rules in minutes, while machine learning models automatically spot the patterns of unusual behavior that risk managers might miss.  

It makes for highly effective, automated decision making carried out seamlessly in the background, to help reduce your chargeback costs, admin overheads and customer friction. That’s the confidence retailers need to drive business success this holiday season. 

To learn more about how Simility’s industry recognized Adaptive Decisioning Platform can help you automatically differentiate between trusted customers and bad actors this holiday season, schedule a demo now. 

James Nisbet

James Nisbet

James leads Simility’s Business Development efforts in North and South America. He partners with enterprises to understand their fraud challenges and identify how Simility’s solutions can align with their strategic goals. He has over 4 years of experience on both the product and sales side working with financial risk software. He holds degrees in Business Finance and Economics.
James Nisbet

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