The holiday shopping season seems to come earlier every year, with retailers offering seasonal sales events online and in-store to give consumers more options to shop while staying ahead of the competition. As shopping activity increases, so can opportunities for holiday fraud, making it important for businesses to prepare for potential threats during the busy season.
For businesses, preparing for the holiday shopping season means more than managing increased transaction volumes. Understanding common types of holiday fraud and taking steps to protect online payments can help businesses reduce risk and protect sensitive payment data.
Key Takeaways
- Increased online shopping and transaction volumes during the holiday season can create more opportunities for fraudsters to target businesses and consumers.
- Common holiday fraud threats include payment and credit card fraud, card testing, account takeover, phishing, and ransomware.
- Businesses can strengthen fraud prevention by using verification tools, transaction velocity checks, fraud scoring, user authentication, and ongoing transaction monitoring.
- Protecting sensitive payment and personal data with technologies like encryption and tokenization can help reduce the potential impact of a data breach or compromise.
Holiday Shopping Trends – Online and In-Store Growth
Planning ahead is a smart move for retailers and consumers alike. Consumers continue to start their holiday shopping early, while retailers respond with seasonal sales and promotions designed to capture demand throughout the shopping season.
Despite the hustle and bustle of the season, today’s consumers still appreciate the in-store shopping experience when searching for a good deal. At the same time, there is no denying that e-commerce has transformed the retail industry. Online shopping remained the top holiday shopping destination in 2025, with 55% of consumers planning to make their holiday purchases online, according to the National Retail Federation (NRF).
Today’s consumers have grown accustomed to the ease of shopping from their couch for Black Friday, Cyber Monday, Small Business Saturday, Super Saturday, or any day in between — all while expecting exceptional service and even better deals.
That convenience continues to drive significant online spending. According to Adobe, U.S. consumers spent a record $257.8 billion online during the 2025 holiday season, up 6.8% year over year. Cyber Week alone accounted for $44.2 billion in online spending.
As online shopping activity increases during the holiday season, businesses also need to prepare for the potential for holiday fraud. Increased transaction volumes can create greater opportunities for fraudsters to target online payments and sensitive payment data.
What Is Holiday Fraud?
Holiday fraud refers to fraudulent activity that targets businesses and consumers during the busy holiday shopping season. Increased transaction volumes, seasonal promotions, and greater online shopping activity can create more opportunities for fraudsters to attempt unauthorized purchases, use stolen payment credentials, or target accounts and sensitive data.
Holiday fraud can take many forms, including payment and credit card fraud, card testing, account takeover, and phishing. Understanding these risks can help businesses identify suspicious activity and strengthen their payment security.
Why Is Holiday Fraud a Growing Risk for Businesses?
As merchants prepare for the largest shopping season of the year, holiday scammers are preparing too. Increased online shopping and transaction volumes can create more opportunities for fraudsters to target businesses and consumers.
The potential impact of e-commerce fraud extends beyond the holiday season. According to Juniper Research, global e-commerce fraud is projected to rise from $56 billion in 2025 to $131 billion by 2030, an increase of 133%. For businesses, the heightened activity of the holiday shopping season makes strong fraud prevention and payment security measures especially important.
5 Common Types of Holiday Fraud Businesses Should Watch For
Fraudsters can take advantage of increased transaction volumes and online shopping activity during the holiday season in several ways. Businesses should be aware of the following common fraud tactics:
1. Payment and Credit Card Fraud
Fraudsters may use stolen credit card information to make unauthorized purchases online, particularly during periods of high transaction volume. Businesses should watch for unusual purchasing patterns and mismatched billing information.
2. Card Testing
Card testing is when fraudsters make small or repeated transactions to determine whether stolen payment card information is valid. E-commerce payment forms can be targeted for these attacks, making transaction monitoring and controls such as velocity checks important.
3. Account Takeover
Account takeover is when fraudsters gain unauthorized access to a customer’s online account, often using stolen or compromised login credentials. Once inside an account, they may attempt to make fraudulent purchases, change account information, or access stored payment details.
4. Phishing and Social Engineering
Phishing remains a common tactic for fraudsters looking to obtain login credentials, payment information, and other sensitive data. During the holiday season, fraudulent emails, text messages, websites, and promotions may be designed to look like legitimate retailers or services and encourage recipients to provide sensitive information or click malicious links.
5. Ransomware
Ransomware is a type of malicious software that can encrypt files or block access to systems until a ransom is paid. Attackers may exploit vulnerabilities in web applications, systems, or employee accounts. During the busy holiday shopping season, businesses should remain aware of potential vulnerabilities and maintain strong cybersecurity practices.
How to Protect Your Business From Holiday Fraud
Fraudsters will always look for vulnerabilities to steal consumer payment data, and although fraud prevention is not foolproof, there are several payment security strategies you can use to effectively reduce the risk of fraudulent activity. The following steps can help make your checkout process more secure.
Enable Security Tools Like reCAPTCHA
reCAPTCHA prevents automated bots or scripts from submitting payment forms and requires users to click a checkbox – like asking the users to match words with images in a simple puzzle – if malicious targeting is detected.
Use CVV Verification
Enabling zip code validation, address verification, and CVV on the payment page adds another layer of security. CVVs are harder to compromise than card numbers and expiration dates, so requiring them on your payment form is optimal.
Implement Transaction Velocity Checks
Merchants can turn on IP blocking rules and configure velocity checks that will automatically block transactions coming from unwanted sources while allowing transactions coming from specific IP addresses.
Temporarily Disable Vulnerable Forms.
If all security protocols put in place still result in a compromise, temporarily disabling a payment form allows the merchant the ability to retain the page for future use without deleting the entire form.
Verify Users Prior to Displaying Payment Forms
Validating user sessions or requiring users to log in prior to accessing the payment form helps eliminate access by bad actors attempting card testing or validation of stolen credit cards.
Use Fraud-Scoring Tools
Bluefin encourages its merchants to learn more about Bluefin’s fraud-scoring tool, where they can leverage state-of-the-art machine learning models and established rules to identify good customers, analyze patterns and data, and highlight risky transactions.
Monitor for Suspicious Transaction Activity
Monitoring transaction activity can help businesses identify potential indicators of fraud, including high traffic over a short period of time with similar attributes, low transaction values, increases in failed authorizations, and specific decline codes. Bluefin’s PayConex™ payment gateway includes internal monitoring mechanisms designed to help detect these indicators.
Protect Sensitive Customer Data
Protecting sensitive customer information is essential, especially during the busy holiday shopping season. Bluefin’s ShieldConex® vaultless tokenization solution replaces sensitive payment and personal data with tokens that have no exploitable value if compromised. By securing data at the point of entry, merchants can reduce exposure to sensitive information, minimize risk, and deliver a more secure shopping experience.
Strengthen Your Payment Security Strategy This Holiday Season
The holiday shopping season brings increased transaction volumes and new opportunities for retailers, but it also underscores the importance of protecting sensitive payment and customer data. A strong payment security strategy should extend beyond the holiday rush, helping merchants reduce risk, protect customer information, and maintain flexibility as their businesses evolve.
Bluefin helps retailers secure sensitive data across in-store and online payment environments through PCI-validated Point-to-Point Encryption (P2PE), ShieldConex® vaultless tokenization, and ShieldConex® Orchestration. Together, these solutions help merchants reduce exposure to sensitive data, simplify PCI compliance efforts, and build a more flexible payment infrastructure.
Ready to strengthen your payment security strategy for the holidays and beyond? Contact Bluefin to learn how our solutions can help protect your business and your customers.
Holiday Fraud FAQs
When should businesses prepare for holiday fraud?
Businesses should review their fraud prevention and payment security measures before holiday shopping activity begins. Preparing early gives businesses time to assess payment forms, security controls, and transaction monitoring before transaction volumes increase.
What are signs of potentially fraudulent transactions?
Potential warning signs can include repeated transaction attempts, unusually low transaction values, increases in failed authorizations, unusual transaction patterns, or multiple transactions with similar attributes over a short period of time.
How does increased transaction volume affect fraud detection?
Higher transaction volumes can make suspicious activity more difficult to distinguish from legitimate customer purchases. Automated fraud detection, transaction monitoring, and established security controls can help businesses identify unusual activity during periods of increased demand.
What is the difference between fraud prevention and payment data security?
Fraud prevention focuses on identifying and stopping potentially fraudulent activity, while payment data security focuses on protecting sensitive payment information from exposure or misuse. Businesses can use both approaches together as part of a broader payment security strategy.
Can tokenization help reduce the impact of payment fraud?
Tokenization can complement fraud prevention controls by replacing sensitive payment data with a non-sensitive token, reducing the amount of usable payment information exposed if systems or data are compromised.
