Online fraud has become the true silent enemy during the high seasons in retail. Throughout Black Friday 2024, which kicked off year-end shopping, while consumers enjoyed irresistible promotions, fraudsters also took advantage of the shopping wave to attack with greater intensity and sophistication. According to data from Signifyd, an e-commerce fraud prevention company, categories such as luxury, beauty and fashion saw significant increases in fraud attempts.
The beauty sector saw a 43% increase in fraud attempts during the Cyber Weekend (Friday, Saturday, and Sunday), compared to last year. In fashion, fraud volume grew on Friday but declined on the following days. Meanwhile, the luxury sector saw fraud attempts peak at 3.5x compared to the previous year during Black Week.
What does this mean for e-commerce? First, that fraudsters take advantage of e-commerce sales peaks to commit fraud unnoticed. Second, they also leverage discounts to gain even more advantages when committing fraud, and third—perhaps most importantly—they invest in and diversify their tools to commit fraud faster and more efficiently. For retailers, this means the race to identify and block fraud has never been more urgent.
Ignoring fraud growth comes at a high cost
Preparing for high sales seasons, like the year-end period, starts months in advance and is an opportunity to maximize sales. However, a costly mistake is forgetting that these periods also serve as a fertile ground for fraudsters, who know the shopping frenzy can create better opportunities to scam.
The fraud numbers observed on Black Friday become valuable insights for retailers all year, but they take on greater significance during sales peaks. For example, luxury, beauty and fashion were the most targeted categories during Black Friday 2024, precisely due to the high product value and ease of resale.
Without a proactive fraud prevention strategy, supported by tools as agile as current fraud schemes and guaranteed protection measures, the year-end sales surge can also lead to significant fraud-related losses—not just through chargeback costs but also administrative expenses and fees involved in disputes.
The solution lies in rapid intelligence: prevention before loss
As fraud networks evolve with sophisticated tactics and faster execution, fraud prevention tools must be equally agile and intelligent. Third-generation fraud prevention solutions are leading a market shift with AI-based technology and machine learning that not only identifies fraudulent patterns but also anticipates threats before they cause harm.
“Fraud attempts throughout the high sales season show increasingly faster, organized, and audacious schemes. Periods of high e-commerce activity are especially targeted by fraudsters due to the significant increase in transaction volume. The secret to maintaining profitability is adopting a proactive and instant antifraud approach,” says Gabriel Vecchia, Commercial Director at Signifyd, a company offering a third-generation fraud prevention solution.
Fraudsters never sleep
While brands focus on boosting sales, fraudsters are ready to attack. What sets successful fraud-fighting businesses apart from those facing major losses is the ability to react quickly, constantly evolve, and ensure revenue protection.
“E-commerce can’t delay or hesitate in identifying fraud, nor should it bear this responsibility alone. Proper use of technology not only blocks fraud attempts in real time but also ensures fraud-related losses don’t impact the financial health of e-commerce; with third-generation fraud solutions, this becomes the provider’s responsibility,” Vecchia concludes.
Amid peaks in fraud attempts in high-ticket segments during year-end sales, Signifyd reaffirms the importance of artificial intelligence as a vital tool for e-commerce businesses to protect their operations against fraud and its potential financial impact.
“Attempting fraud during holiday shopping seasons is like fishing in a stocked pond—and fraudsters know it. Our mission is to ensure online commerce continues growing, seizing all sales opportunities with the peace of mind of guaranteed fraud protection—only possible with the massive use of advanced technology,” Vecchia concludes.
