Top 5 Holiday Fraud Schemes You Need To Be Aware of in 2025

Chargeback Management Services - Dispute Response Sep/ 30/ 2025 | 0

The holiday season is a peak time for businesses, but it also comes with an increase in fraud attempts. In 2025, fraudsters have become more sophisticated, targeting businesses with scams designed to exploit the busy shopping period. Stay ahead of these fraudsters by learning about the top fraud schemes you need to be aware of and how to protect your business.

1. Friendly Fraud (Chargeback Fraud)

What it is:
Friendly fraud occurs when a customer makes an online purchase, then disputes the charge with their bank after receiving the goods or services. This is one of the most common fraud schemes during the holiday season, as customers may take advantage of busy holiday transactions to get a product for free.

How to protect yourself:

• Use clear return policies and require proof of return.
  
• Invest in chargeback management tools to dispute fraudulent chargebacks effectively.
  

2. Phishing Scams

What it is:
Phishing scams are deceptive attempts to steal sensitive information, such as credit card numbers, login credentials, or business data, by masquerading as legitimate entities.

How to protect yourself:

• Train employees to spot phishing emails and scams.
  
• Implement multi-factor authentication (MFA) for customer accounts.
  

3. Account Takeover Fraud

What it is:
Account takeover occurs when a fraudster gains unauthorized access to a customer’s account, often by using stolen login details. Once they have control, they can make fraudulent purchases or drain customer accounts.

How to protect yourself:

• Use strong password policies and encourage customers to enable MFA.
  
• Monitor accounts for unusual activity, especially during the holiday rush.
  

4. Coupon and Gift Card Fraud

What it is:
Fraudsters often take advantage of online gift card promotions or fake coupons to make fraudulent transactions. They may use stolen payment methods to purchase gift cards, then resell them.

How to protect yourself:

• Limit the number of gift cards that can be bought in a single transaction.
  
• Verify the legitimacy of gift card or coupon codes before applying them to transactions.
  

5. Return Fraud

What it is:
Return fraud happens when customers return used, damaged, or even stolen items to businesses, often for a full refund or exchange. Fraudsters take advantage of lenient return policies during the holiday season.

How to protect yourself:

• Implement strict return policies with proof of purchase requirements.
  
• Use tracking systems to monitor returns and exchanges.
  

How to Protect Your Business During the Holidays

As the holidays approach, it’s crucial to stay vigilant and protect your business from fraud schemes. Ensure your staff is trained to recognize potential fraud, invest in fraud detection tools, and regularly review your payment and return policies to safeguard against fraudulent activities.