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How retailers and marketplaces can combat holiday shopping scams

Author: Laura Ballam


‘Tis the season for twinkling lights, shiny ornaments, flashy tinsel and ... holiday shopping scams. According to the 2023 Holiday Norton Cyber Safety Report, nearly 20% of consumers have been targeted by scams during the holiday season, and 45% wish they knew how to better protect themselves during the year’s busiest shopping months.

While scammers are the humbugs of the season, retailers and marketplaces can protect their business and keep shoppers safe by layering behavioral biometrics into their fraud prevention strategy.

Fraudster-driven holiday deals scams 

Between the hustle-bustle of the shopping season, spike in consumer online spending, and fast-paced selling conditions, the perfect environment for fraudsters to thrive. Discount deals are everywhere, 50% off coupons aren’t a shock, and shoppers are constantly bombarded by “hurry before you miss it!” advertisements. Urgency sets the stage for hasty decisions, and fraudsters are quick to capitalize on it.

It’s important for retailers to be aware of the increased risk of fraud that goes with the season. Holiday shopping scams come in two flavors: fraudster-driven, and consumer-driven. When it comes to fraudster-driven scams, there are two highly popular formats to watch out for: fake listings and counterfeit products.

  • Fake listings: When a “must-buy-now!” deal sounds too good to be true, it probably is. Fake listing scams involve real products hidden behind phony listings. From special holiday sale items and high-end products being offered at a steal, to fake rental property listings and travel package deals, the listing is entirely fabricated and the product will never be received.
  • Counterfeit products: Counterfeit product scams involve real listings for fake or knockoff products. Scammers will often sell the imitation goods at significantly lower prices, tricking shoppers into thinking they’re getting a great deal on genuine products.

To get fake listings and counterfeit products in front of shoppers, fraudsters use legitimate retailer websites. For instance, they might create an Amazon or eBay listing for what appears to be a genuine product — and they’ll even add fake reviews to build trust. After a period of time (typically once enough shoppers have been duped), they’ll take the site down. If the shopper tries to get a refund or report the scam, the listing (and scammer) is long gone.

How to combat fake listings and counterfeit products scams

When a fraudster uses a marketplace such as Amazon or eBay to post fake listings and sell counterfeit products, their number one goal is to scam consumers into making a purchase.

Keeping shoppers safe from scams starts with marketplaces carefully examining and vetting their relationships with sellers. Aside from tracking what sellers are listing and what IP addresses they’re coming from, marketplaces should be on the lookout for other suspicious indicators of fake listings and counterfeit scams such as:

  • Listings with poor grammar, misspellings, or generic language. Legitimate suppliers typically provide detailed and accurate product information.
  • Concerning consumer reviews and feedback, such as posts about receiving counterfeit products. Businesses should investigate the claims and look for patterns.
  • Significantly lower prices than market average. Fraudsters are notorious for luring buyers with “deals-of-the-century” prices. Merchants should see if low price offerings are coming from similar addresses.
  • Sudden changes in listing creation frequency and patterns in how images are selected, cropped, or manipulated. Unusual image uploads can signify fraud.

Fraudsters often use automated tools to fill out forms when creating fake listings. To accurately confirm a seller’s identity and detect these anomalies, merchants must leverage a fraud solution that incorporates behavioral biometrics. Capturing the way sellers complete forms (their mouse movements, typing speed, keystrokes, etc.) and their behavior and patterns builds a set of comprehensive identity profiles that paint a clear picture of legitimate behavior. Understanding how sellers behave on an individual level makes it easier to spot atypical, fraud-driven behavior.

Behavioral biometrics is uniquely equipped to recognize deviations from typical behavior. For instance, fraudsters who sell on marketplaces often use automated tools to fill out forms when creating fake listings. Behavioral biometrics captures these anomalies and inconsistencies in behavior to spot actions that deviate from the norm.

Understanding the behaviors of legitimate sellers enables retailers and marketplaces to compare every seller interaction against a robust reference point of valid behavior, so they can stop fake listings and counterfeit product scams in real time.

Consumer-driven holiday scams 

Between November and January, shoppers deviate from their normal online behavior by spending and purchasing differently. These abnormal behaviors cause headaches for retailers who depend on traditional transaction-based fraud detection because transaction monitoring can’t discern legitimate consumer behavior from fraud behavior. Flagging unusual purchases leads to friction, creating a poor customer experience, but retailers still need to identify and prevent holiday scams.

Professional fraudsters aren’t the only scam artists working over the holidays. Consumers can be just as guilty at carrying out scams, a.k.a. “friendly” fraud.

Although it sounds wholesome, the intent is malicious and wreaks havoc on a retailer’s bottom line. One of the most common types of friendly fraud seen around the holidays is chargeback fraud. Chargeback fraud is prevalent; a report by Chargebacks911 revealed that 44% of merchant-reported chargebacks in 2022 were a result of friendly fraud.

Especially prominent during and after the holidays, Buy Now, Pay Later (BNPL) fraud is a friendly scam retailers must watch for. The rush of the fast-paced shopping season can cause consumers to splurge on products they can’t afford — and BNPL is often enticing because of its convenience, flexibility, and accessibility. Then in January, when post-holiday bills come due, consumers can be plagued buyer’s remorse leading to a rise in disputes, neglected payments, or an uptick in chargebacks.

How to combat friendly fraud 

Behavioral biometrics can again help detect and prevent friendly fraud by capturing all consumer interactions to build comprehensive identity profiles. These individual profiles contain historical behavioral data that can be leveraged by retailers to see if a shopper has a “tendency” to behave in a certain way. Do they make a lot of returns? File a lot of “item not received” complaints? Do they seem to always find something wrong with the product? Even if they buy tons of items and rarely file a “product not received” claim, all data is captured and retailers can put consumers into different cohorts, like “high risk,” and set tripwires so fraud can’t progress further.

On the flip side, capturing all data starting the moment a shopper lands on the site empowers retailers to dispute chargebacks initiated by customers with their banks by proving identity and intent based on both interactions and behavioral data. Behavioral biometrics give merchants a unique tool with strong data to defend themselves against disputes.

Capturing all data, including past behaviors, is a great way for retailers to spot suspicious trends and prove friendly fraud.

Naughty or nice: behavior says it all!

Preventing holiday shopping scams is easy when retailers and marketplaces understand how consumers and fraudsters behave throughout the year. Capturing all data, including behavioral biometrics, helps ensure lumps of coal end up in the right stockings.


The clock is ticking to prevent fraud! Are you ready?

Fraud is increasing at a dramatic pace and businesses must act now to protect and retain consumers. Fraud prevention requires four essential elements working in harmony within your fraud data platform. Is your solution up to date?

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