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Preparing for the Holidays: Fraud Tips to Help You Survive the Season
Once again, it’s time to start preparing your business for the holidays ahead. The earlier you start planning, the better off you’ll be. However, sometimes that busy season creeps up on us. And you might find yourself lagging behind, potentially adding extra challenges to an already stressful time of year.
Fortunately, we have some tips to help you prepare for what’s ahead — from checking in on website health to ensuring you have the right fraud tools in place.
7 Common Holiday Pitfalls and Tips for Avoiding Them
It happens every year. You get to September and realize that the holidays are suddenly upon us. You may hire extra help, order more inventory, and mentally prepare for the wave of shoppers you’re expecting. While good, these preparations may not be enough to successfully get you through the holiday rush.
Let’s talk through some common mistakes merchants make when going into the holiday shopping season.
1. Not preparing the website for an influx of traffic
Holiday web traffic is typically a lot higher during the last few months of the year, but many merchants fail to evaluate their websites before shoppers flock to their favorite brands. If your website isn’t technically prepared to handle a substantial increase in traffic — thereby slowing down the checkout process, failing to load product pages, failing to process payments, etc. — you could lose potential customers.
Worse, these issues may force you to redirect your priorities towards fixing the website when what you really need to focus on is customer service and fraud prevention.
Pro tip: Update your website early and run tests to make sure it’s working properly. And to avoid holiday fraud consider:
- Updating plug-ins with the latest security patches or installing new protocols, such as web application firewalls, to prevent automated attacks.
- Modifying fraud logic to account for seasonal changes in consumer behavior.
- Implementing IP tracking and geolocations to identify abnormal behavior, such as multiple user accounts accessing the site with the same IP address.
- Adding challenge-response tests to checkout for products that attract fraud.
2. Not understanding or meeting shoppers’ expectations
Each year, consumers expect more out of merchants, whether that be new ways to pay, free shipping and returns, one-day shipping, or newer products. As a merchant, you have to remain aware of these evolving demands and adjust your business practices accordingly. For example, you might need to adjust your shipping policies during the holidays to be competitive.
Although you might not be able to adapt to every consumer expectation, being flexible and open to new trends can give you an advantage over your competitors. Too many merchants fail to adjust their business strategies during the holidays to satisfy their customers, leading to buyer’s remorse, disputes, refunds, and more.
Pro tip: Test out new ideas early-on. For example, if you notice more consumers demanding a buy now pay later option at checkout, give yourself enough time to adopt the new payment method and ensure it works properly before the holidays arrive. If you find that something doesn’t work, you’ll have enough time to consider other options.
3. Not adjusting fraud policies for holiday purchases
Most of your rules and policies around fraud are effective all year. You might adjust minor things here or there. However, when it comes to the holiday shopping season, you should take a closer look at your fraud rules as well as your return and refund policies.
For example, say you have a fraud rule in place that flags gift card orders totaling $1,000 or more. In typical circumstances, this might be good practice to prevent things like elder abuse fraud. During the holidays, large gift card orders are more common, so you might need to adjust your fraud rules to allow these purchases without an extra layer of friction. Rules that are too strict can drive shoppers away from your business towards your competitors.
Pro tip: Evaluate your fraud tools and policies. It might be time to make a switch! You want tools that allow for flexibility — such as creating different rules for various situations — and address a multitude of fraud threats without impacting the customer experience.
4. Failure to hire adequate help
The holiday shopping season is almost always busier than you expect it to be. Not only do you need more sales associates for in-store purchases, but you also need more staff to fulfill online orders. Fraud and chargebacks may also surge during this time, so you might want to hire an additional employee to help manage these aspects of the business. Too many businesses neglect to hire the right amount of help and may fall behind, which can negatively impact revenue and operations well into the next year.
Pro tip: Look through your data from previous years to estimate your current needs. Note how much of your revenue was lost to fraud and holiday chargebacks so you can hire the right kind of help to curb those losses this season.
5. Poor safeguards for marketing promotions
These days, customers typically expect most businesses to offer sales around the holidays. They may even avoid shopping with brands that don’t offer any discounts, choosing instead to buy from a competitor. And while businesses would be wise to follow suit and fulfill customers’ expectations, most businesses don’t properly safeguard their promotions from abuse.
For example, if you offer a 50% off discount to first-time shoppers, a single user could easily take advantage of this promotion — which would be a waste of your money. You need to have safeguards in place that can recognize unusual behavior — multiple accounts being created with a single IP address — to prevent promotion abuse.
Pro tip: Test your promotions before you launch them. Look for any ways that users might be able to duplicate codes, share offerings, or reuse coupons. Using unique codes specific to customers or accounts can reduce promo abuse.
6. Failure to prepare employees
Fraudsters and opportunistic customers often get away with more scams and fraud during the holidays for a couple of reasons. One, the season is extra busy. But two, employees are often unprepared for certain threats.
Too often, merchants fail to adequately train their employees on social engineering schemes — like phishing, threats, or other manipulation tactics. When an employee becomes the victim of these schemes, they might give out sensitive information, leading to data breaches or account takeover attacks. Or they might operate against established refund or return policies, allowing customers to get away with refund fraud.
Pro tip: Regularly train your employees on social engineering. It’s one of the most common tactics used today to carry out a variety of attacks. Frequently test your employees by sending out fake phishing emails to get a sense of your team’s knowledge and readiness to respond to social engineering threats.
7. Starting preparations too late
Perhaps one of the biggest mistakes merchants make in preparing for the holidays is starting too late. To successfully navigate fraud, chargebacks, order fulfillment, and customer service, you need to start months before the holiday season. You can reasonably predict what your needs will be by evaluating all your data from the previous year. From there, you can figure out what adjustments you might need to make and implement any new fraud tools as needed.
Pro tip: Start preparing for the holidays as early as possible. For some, that might mean setting aside time during the summer to plan and implement any necessary adjustments you need to make to your fraud management strategy.
Effective Tools That Will Help You Thrive this Holiday Season
Fraud can be overwhelming, especially during your busiest seasons. Sometimes it’s better to leave it to the experts, so to speak. Fortunately, we offer services to help you successfully navigate the holidays — all without technical onboarding or contractual obligations.
These services range from one-on-one consulting about fraud strategy to end-to-end support for chargeback management and manual review processes. For example, you could meet with an experienced data analyst to review your holiday fraud strategy and offer recommendations for improvement. Or, if you’re feeling overwhelmed with disputes and chargebacks, you can outsource that work to a member of our team.
Check out our consulting & managed services to see what’s right for you.