How can organisations reduce holiday fraud without disrupting legitimate customer activity?

How to reduce holiday fraud without creating friction for genuine customers

The practical answer is to add verification where fraudsters try to move fastest, while keeping the customer journey simple for low-risk activity. Holiday fraud usually concentrates around account takeover, payment changes, gift-card abuse, delivery scams, and social engineering, so controls should be proportionate: strong checks on sensitive actions, lighter handling for routine browsing and buying.

That means organisations should focus on the points where trust changes, especially logins, address updates, payout changes, password resets, and high-value transactions. The more those steps are validated through a second signal, the less likely a scammer can turn a convincing message into a loss.

Which controls stop scams without blocking legitimate seasonal activity?

The most effective pattern is layered friction, not blanket friction. Use customer education to make common holiday lures easier to spot, message verification to confirm requests that claim urgency, and step-up checks only when behaviour, amount, device, or destination looks unusual. That preserves a fast path for ordinary shopping while raising the cost of impersonation.

For payment and account changes, route risky requests through a separate verification step rather than the same channel that was used to make the request. A fraudster who controls a mailbox, text thread, or social account should not also be able to approve the change through that same path. For delivery and donation scams, clear public guidance and in-product warnings help customers verify whether the request is real before they act.

Operationally, organisations should keep exception handling explicit. If a customer is travelling, shopping from a new device, or making a legitimate high-value purchase, the control should adapt by using stronger verification, not by blocking the transaction outright. That is the difference between risk-based control and a blunt anti-fraud barrier.

How should teams detect fraud attempts early and respond quickly?

Detection works best when teams watch for the combination of odd timing, new payment destinations, sudden profile edits, and repeated failed verification attempts. One signal alone may be harmless during the holidays, but several together should trigger review. A useful reference point for security teams is FinCEN, because scam-driven payment activity often becomes a financial crime reporting and escalation issue once suspicious patterns are confirmed.

Clear reporting paths matter as much as the controls themselves. Customers need an obvious way to question a request, and staff need a fast way to freeze a change, validate the request through a known-good channel, and reverse a transaction before funds or personal data are lost. The fastest fraud wins are usually the ones that exploit hesitation, not technical sophistication.

Teams can also use policy, access, and monitoring discipline to keep the response targeted. Stronger authentication for sensitive actions, tighter access to payment and support tooling, and audit trails around manual overrides make it easier to separate real customer activity from fraud attempts without widening friction across the whole base.

Risk and Threat Considerations

Holiday fraud is attractive because volume is high, urgency is normal, and customers are primed to react quickly to shipping, payment, or charity requests. That creates an ideal environment for impersonation, account compromise, and payment redirection, especially when the attacker only needs one successful interaction to create a loss.

Failure mechanism: The control fails when verification is tied to the same channel or device that the fraudster already influences, or when step-up checks are applied so broadly that staff and customers learn to bypass them. In that case, the attacker uses urgency and familiarity to convert a believable message into an approved change.

Impact: The result can be unauthorized payments, account takeover, delivery redirection, credential theft, or exposure of personal data. It also creates secondary harm, because customers who experience unnecessary friction may abandon legitimate purchases or ignore future security prompts.

Practitioner Guidance

What to prioritise: Put the strongest controls on actions that move money, change account recovery, or alter delivery and payout details. Those are the points where a fraudster gets the most value from a single success.

What to verify: Make sure verification is independent of the request path. If the request arrived by email, text, or chat, confirm it through a different trusted channel before approving the change.

Decision rule: If the activity is unusual but plausibly legitimate, step up verification rather than blocking it. If the request changes money flow, destination, or account control, treat it as high-risk until validated.

Common mistake: Applying the same friction to every customer interaction. That approach reduces conversion, creates alert fatigue, and teaches users to ignore security prompts.

Practitioner takeaway: The best holiday-fraud programmes are selective, not heavy-handed, they harden the moments where trust changes while leaving ordinary customer behaviour as smooth as possible.

Related resources from NHI Mgmt Group

• How can organisations reduce fraud without blocking legitimate automation?
• How should organisations combine AI and traditional controls to reduce fraud without adding too much customer friction?
• How should organisations reduce insider exfiltration of customer and client data without disrupting normal business workflows?
• How can organisations reduce fraud without creating excessive user friction?