78% of shoppers are concerned about holiday fraud surge
A recent report from PYMNTS Intelligence found that heading into this year’s shopping season, retailers will be protecting themselves in more ways than ever before.
The report stated, Securing the Season: Fighting Fraud Without Losing Customersoutlining how holiday sales growth is tied to growth Vacation fraud. it programme How criminals are taking advantage of higher transaction volumes, and how artificial intelligence is reshaping risk on both sides of the checkout and Why are merchants push arrive move From seasonal defense to ongoing protection. The report also highlights the role of customer service and identity verification practices in reducing chargebacks that often pile up after January. Retailers have little room for error in the final stretch of the year. This is when profits matter most.
• The U.S. Federal Trade Commission estimates that consumers will lose more than $12.5 billion to fraud in 2024, a 25% increase from 2023.
• seventy-eight % of Americans say cybercrime increases during the holidays, while 59% report growing concerns about scams.
• fifty-two % of businesses are implementing new AI models for fraud detection and customer decision-making.
Report point out Holiday fraud is no longer limited to phishing schemes or card-not-present attacks. First-party fraud is also growing. Chargebacks caused by buyer's remorse or tight post-holiday budgets currently account for 75% of fraud at digital goods merchants, and most customers bypass merchants entirely and go directly to their banks. This bypass turns a simple return into an expensive dispute. Retailers are increasingly recognizing that the risk of fraud extends far beyond a compromised account or stolen card. Customer behavior plays a greater role than ever before.
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The data also shows that attackers are becoming more strategic. During the 2024 holiday period, registration attacks increased by 309%. Wave of single coordinated account takeovers across gaming platforms leads to losses Exceed $145,000. Criminals track consumer activity and attack during periods of high traffic. Retailers must match this pace. They must also match the level of complexity.
Artificial intelligence is reshaping the threat landscape. Criminals are using generation tools to clone brand identities, mimic customer behavior and bypass once reliable Safeguards. Google's Verification code v2 Can now be defeated by robots with perfect accuracy. Young consumers are particularly vulnerable to deepfakes. One in three shoppers 18 to 34 have Fall victim to these scams. Vulnerability starts early in the journey. It escalated quickly.
However, reports show that AI is also enhancing the tools available to merchants. Real-time monitoring reduces false positives by up to 85% while doubling the detection rate of infected cards. Adaptive machine learning model help Merchants stay up to date on fraud patterns transfer. The partnership is also building stronger defences. Worldpay acquires Ravelin bring More advanced fraud detection to its platformand its Know Your Agent framework combined with Trulioo create New safeguards for AI-driven business. Retailers now have more ways to verify the identity of customers and automated agents. Security is improved. Friction decreases.
The holidays may compress risk into a brief window, but the report concludes that merchants must now treat fraud as a year-round concern. Reactive strategies no longer keep pace with evolving threats. Actively invest in layered defense and transparent data practices and Faster customer service responses provide a more durable path forward. Fraud never slows down. Neither can merchants.
