The holiday shopping season is a crucial period for retailers and merchants worldwide, yet it also brings a surge in fraud and cyber-threats.
According to new guidance from Mastercard, businesses and shoppers alike must stay vigilant as scammers exploit increased online activity and customer urgency.
Below are five practical measures that can help keep fraudsters at a distance — vital reading for merchants, e-commerce platforms and payment-service providers preparing for a busy season.
Why holiday shopping attracts fraudsters
The rise in online shopping during festive periods creates a fertile environment for scams. Many shoppers are drawn by steep discounts or last-minute “perfect gift” deals and end up buying from unfamiliar websites without doing solid vetting.
In a recent Mastercard global survey, nearly half of respondents admitted they might overlook security warning signs if the price seemed right.
Scammers capitalise on urgency, poor website design, and low visibility of seller reviews. Some bogus sites mimic legitimate retailers, using subtle spelling errors, fake trust badges or low-resolution logos to trick buyers into handing over payment details.
Many of these threats are now enhanced by generative AI, which helps criminals create increasingly realistic fake storefronts and phishing emails at scale.
For merchants and retailers, this creates serious risks — from chargebacks and refund fraud to reputational damage if customers fall victim to scams after following a link from your platform.
Five practical ways to reduce scam risk
- Direct shoppers to official websites and bypass ads/links. Encourage customers always to type your brand’s URL directly into their browser rather than clicking on ads, social-media posts or links. This reduces the risk of them landing on lookalike or phishing sites.
- Keep devices, apps and systems updated. Many scams exploit security vulnerabilities in outdated software. Prompting users and clients to maintain up-to-date devices — and doing the same internally for retailer systems — can close a common entry point for fraud.
- Use secure payment methods and guard payment details. Digital wallets or payment platforms that mask card numbers, plus virtual card features, decrease the chances of card-number theft. Merchants can also encourage or offer such payment options.
- Set up transaction alerts and monitor for suspicious activity. Real-time alerts for large or unexpected transactions can help spot fraudulent purchases early. Regular checks of payment and shipping data — for example mismatches between card billing location and delivery address — can flag potential fraud.
- Educate customers and staff about common scam tactics. Fake delivery-problem alerts, phishing emails, phishing links via QR codes, and bogus charities are common around peak shopping times. Clear communication to customers and internal teams about recognising and reporting such scams can deter fraud attempts.
Implications for retailers, payment vendors and the wider retail sector
The season’s fraud surge isn’t just a consumer issue — it’s a growing business risk. For online retailers, not detecting scams or hosting misleading ads can result in chargeback losses and customer distrust.
Retailers and payment vendors can reduce exposure by integrating fraud-detection tools, encouraging secure payment methods and educating customers — turning risk prevention into a competitive advantage.
Meanwhile, regulators and payment networks may increasingly expect firms to adopt and promote such safeguards to protect consumers.
As payment volume and online shopping continue to grow globally, businesses that prioritise security and transparency will be better placed to build trust.
The simple steps outlined by Mastercard provide a practical framework for merchants and payment service providers aiming to stay ahead of scammers this holiday season.
