Retailers’ Guide to Reducing Fraud During the Q4 Holiday Boom

About the author

Leo Hao Li is Senior Risk Management Strategist at Antom, Ant International. He works closely with international and local businesses in Asia, Europe and the US, across verticals including e-commerce, travel, mobility, digital & and entertainment and new energy.

The fourth quarter is the most critical period of the year for retailers. From Halloween and Black Friday to Cyber Monday, Christmas, and New Year sales, consumer spending surges, driving record-breaking revenue opportunities. Yet, behind this seasonal commerce boom lies a growing threat: payment fraud.

A study by Juniper Research predicts e-commerce fraud will rise to US$107 billion, a 140% increase from 2024’s $44.3 billion. And a large part happens during Q4. So, without strong fraud prevention in place, your year-end sales gains can quickly be erased by financial losses, damaged reputation, and operational disruptions.

During the holiday season, we’d typically pay more attention to…

• E-commerce platforms: Cross-border merchants can be more susceptible when delivery times, logistics and verification systems become more unpredictable because of the increased transaction volume.
• Fashion and luxury goods: High-value items are prime targets for resale fraud.
• Consumer electronics: Popular electronic gadgets, such as smartphones, and headphones, are frequently bought with stolen cards and resold.
• Travel and ticketing services: Flight tickets, hotel bookings, and event passes, are targets for fraudsters.
• Gift card and prepaid cards: These are easily monetised, anonymous, and hard to trace — making them highly attractive to fraudsters.

With the year-end and new year shopping season just round the corner, I definitely recommend speaking with the Antom team for a fraud strategy that suits for your business.

Why pay extra attention to fraud prevention during Q4?

Q4 is the peak sales season for global commerce. Merchants have several reasons to be especially vigilant:

Surge in transaction volume: A sudden influx of orders during holiday promotions can overwhelm systems, making it harder to detect suspicious behaviour and putting immense pressure on fraud detection infrastructure.

Changing consumer behaviour: Shoppers often use multiple devices, log in from different locations, and make unusually large purchases during the holidays. This blurs the line between legitimate user behaviour and potential fraud, increasing false positives and missed threats.

Shipping delays and high return volumes: To enhance the customer experience, many merchants relax return and refund policies during Q4. While this improves satisfaction, it also opens the door to “friendly fraud,” where customers file chargebacks despite receiving the product.

Organised attacks by cybercriminals: Professional fraud rings deploy automated tools to launch coordinated carding attacks during major sales events like Black Friday and Cyber Monday. These campaigns are highly targeted, scalable, and designed for maximum financial impact.

When large-scale fraud occurs, the consequences go far beyond immediate financial loss. Merchants may face:

• Direct financial losses from chargebacks and refunds
• Payment gateway restrictions or account terminations
• Damaged reputation and loss of customer trust
  
  

Proactively implementing a robust fraud prevention strategy is beyond just a security measure. It helps safeguard revenue, protecting profitability during the busiest quarter of the year. You may also want to learn more about the fraud trends global businesses need to pay attention to.

Some common fraud

Understanding the threat is the first step to defence. Globally, these are some of the most frequent fraud types during the holiday season:

While we expect many holiday fraud patterns to repeat, 2025 is shaping up to be a turning point. With rapid advances in technology, fraudsters are now using generative AI at scale to forge identities, create synthetic email addresses, and even use deepfake technology to file appeals after being blocked by risk controls. These tactics make disputes appear legitimate, significantly increasing the difficulty of detection.

Traditional rule-based systems are also increasingly ineffective against these evolving threats. Our strategy is to strike before the threat grows. Antom's graph neural network engine can detect hidden links between seemingly unrelated transactions to uncover organised fraud activities before they scale. For merchants using Antom's AI-powered risk control solution, we’ve observed an 80% reduction in fraudulent transactions compared to rule-only systems.

5 strategies for effective fraud prevention

To effectively guard against evolving fraud, businesses should consider adopting a layered, intelligent approach that combines advanced technologies with human oversight. These 5 strategies can be a good starting point:

1. Real-time risk evaluation

Use AI-powered models to assess each transaction in real time, protecting merchants from potential fraud while adhering to strict data protection and privacy standards.

2. Graph-based fraud detection

Leverage graph computing to uncover hidden fraud rings within your transaction data. Seemingly unrelated transactions may share subtle links, such as having the same device model, email pattern, or shipping cluster.

3. Adaptive authentication

Implement step-up verification (e.g., 3D Secure, SMS OTP, 2FA, MFA or biometrics) for risky transactions to maintain a balance between security and user experience.

4. Chargeback alerts and evidence management

Proactively identify high-risk orders and automatically collect transaction evidence such as IP, timestamps, and device data to strengthen your case in chargeback disputes, improving your chances of successfully defending against fraudulent disputes.

5. Building a comprehensive fraud prevention plan

To ensure smooth operations and a secure shopping season throughout Q4, businesses need a well-structured, proactive fraud prevention strategy.

Building an effective fraud defence

To get started, here are some steps you can take to build an effective fraud defence framework for Q4 and beyond:

1: Assess your risk exposure

Review your fraud performance from the past two holiday seasons, focusing on chargeback rates and financial losses, common attack vectors, and high-risk geographies, products, or traffic sources.

Ask your team or your provider:

• Are you still relying heavily on manual reviews?
• Is your fraud system integrated via API for real-time decisioning?

Identifying these gaps early allows you to prioritise improvements before peak season hits.

2: Choose the right fraud solution for your business

SMBs and mid-market merchants: Consider a SaaS-based fraud platform that offers plug-and-play integration with AI-driven risk scoring. These solutions enable fast deployment and immediate protection without requiring an in-house risk team.

Enterprise: Build or enhance an internal fraud intelligence layer, integrating machine learning models, third-party data signals, and advanced detection techniques like graph analysis, or partner with decision-based fraud prevention providers to receive expert guidance on fraud risk management.

For merchants looking for more control beyond risk rules, Antom Shield provides an AI-powered risk management solution that enables continuous monitoring, assessment, and response to transaction risks. This service includes real-time risk evaluation, flexible list and rule self-configuration, and a suite of intelligent features designed to support effective fraud detection and risk control.

For merchants without a risk team or have limited in-house risk expertise, Antom offers a fully managed risk operations service. Antom performs real-time fraud risk assessments and delivers risk decisions for each transaction — ensuring protection without requiring dedicated internal risk teams. Speak with our team today to get your business holiday-ready.

3: Optimise your risk rules before peak season

• Fine-tune policies early: Do this before the final quarter to avoid blocking good customers.
• Adjust sensitivity levels: Relax rules for low-risk channels to reduce false declines, while tightening controls for high-risk regions or new user signups.
• Set acceptable risk thresholds: Define your maximum tolerable fraud rate — protecting revenue should never mean ignoring risk.
• Avoid over-blocking: Every legitimate transaction blocked is a lost sale involving a frustrated customer.

4: Monitor in real time and be ready to respond

Implement round-the-clock monitoring to detect spikes in suspicious activity or bot traffic and be prepared to adapt when an attack happens. Put together a response playbook on how to:

• Switch payment providers if one gets flagged, or consider a solution such as Antom Payment Orchestration to make sure transactions continue to get through.
• Use backup risk rules or fallback authentication methods.
• Get your team to escalate, if necessary, and act within minutes.

Security is the foundation of growth

The Q4 holiday rush is a golden opportunity for commerce, but also a high-risk period. Businesses must look beyond GMV and prioritise fraud resilience. A robust fraud prevention strategy not only reduces losses but also protects brand integrity, builds customer trust, and supports sustainable growth.

Start now, build your Q4 fraud defence — and make this busy holiday season your safest one yet.