As the holiday season approaches, merchants should be aware that as overall sales increase, so will fraud. In fact, the holiday season is an opportune time for fraudsters to strike. And merchants need to plan accordingly so that they are not overwhelmed. Fortunately, certain strategies and tools can help merchants adjust their fraud procedures. They can adjust in ways that avoid the need to hire additional staff to process holiday season fraud claims.

This fall Kount conducted a survey about anticipated consumer behavior this holiday season. It is to better understand how merchants should focus their fraud strategy. To learn more about the survey and how merchants and acquirers can optimize their fraud management this holiday season, PaymentsJournal sat with Casey Zenner, Vice President of Global Sales at Kount, Brady Harrison, Director of Customer Analytics Solution Delivery at Kount, and Daniel Keyes, Senior Research Analyst at Mercator Advisory Group.

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Equipping Merchants to Combat Holiday Fraud

According to Kount, holiday fraud tends to peak during the year-end consumer buying season. And it continues to persist after the big holiday rush with returns, refunds, and charge-backs. Many fraudsters tend to target this period in the hopes that a merchant’s fraud defenses are overwhelmed. And it’s critical that merchants are prepared and fully equipped to respond to any potential attacks.

“It’s such a double-edged sword for many businesses working to try and capture revenue during their busiest time of the year — because the holiday season, for many merchants, can really make or break their business,” said Zenner.

“During the holiday season, levels of fraud do peak, just because we have more transaction volume in terms of dollars lost,” added Harrison. “But you really need to sift through those events where it makes sense and not overwhelm your existing operational footprint — that’s what we hear a lot from the fraud space.”

Adaptive Friction

“The other option is to dial down your fraud strategy and just say, ‘Hey, we’re just going to take this on the chin, minimize the level of friction for all customers, and then deal with the holiday hangover in January of charge-backs,” he added.