Top Fraud Protection Challenges from the 2024 Peak Season
The five-day span between Thanksgiving and Cyber Monday—often called the Cyber Five Weekend—is the busiest US shopping period of the year. Consumers rush online and in-store to take advantage of seasonal promotions, new merchandise, and deep discounts to kick off the holiday season.
For many brands, the Cyber Five Weekend can make or break sales projections. They prepare for peak challenges ahead of Thanksgiving and reap the benefits as shoppers flock to their sites and stores. But there’s another aspect of peak season shopping that brands must prepare for: Peak fraud.
The high level of consumer transactions means this is one of the busiest periods for fraudsters. In this article, the Radial Payment Solutions team leverages Radial’s merchant data to uncover key consumer behaviors, fraud trends, and fraud protection opportunities from the 2024 Cyber Five Weekend.
Consumer Behavior During the 2024 Cyber Five Weekend
Radial’s experts leveraged proprietary merchant data to map consumer behavior during the 2024 Cyber Five weekend. They discovered:
- In-store pickup increased. Orders delivered via ground shipping decreased from 78% to 73% year over year, while in-store pickup orders increased by 34%. Retailers fueled this trend with in-store promotions and deals to reduce shipping costs and boost in-store sales.
- Consumers used credit cards and gift cards. Credit cards took the lead as the most popular payment method—up 2.7% over 2023. Gift card usage also increased by 11%.
- Merchants pushed promotions. Merchants applied promotions to more products in 2024. Purchases associated with promotions increased by 25%.
Top Fraud Protection Risks During Peak Season
With these shifts in consumer behavior, Radial experts observed a variety of fraud challenges and trends during peak season.
- Suspicious BIN attacks and card testing activities increased. Suspicious activities were 20 times higher during the Cyber Five Weekend compared to normal shopping periods. This is consistent across both 2023 and 2024, meaning fraudsters are far more active during this peak period.
- In-store pickups create room for fraud risk. Analysts have less time to screen risky in-store pickup orders. This creates operational challenges for a manual review team, since in-store pickup orders need to be processed in a short period of time to meet SLAs and customer expectations.
- Gift card orders make collecting fraud feedback challenging. Gift card transactions often involve multiple entities—from retailers to marketplaces, third-party vendors, and payment processors. This leads to challenges collecting fraud feedback data. Plus, without personal payment information, there are less risk indicators available to screen customers’ identities. Anonymity makes it easier to commit fraud and harder to identify fraud patterns tied to specific users. The Radial Payment Solutions team saw an increase in gift card fraud in 2024.
- Customers signed up for or signed into loyalty programs, and hackers increasingly targeted these accounts. The Radial team observed more hacking/account takeover activities on customer loyalty accounts. Fraudsters stole customers’ loyalty points and gift card balances.
The Radial Difference: Radial’s Payment and Fraud Solutions
Radial is prepared for the increase in fraud activities during the Cyber Five Weekend—and all year long. Radial’s combination of breadth and depth of data, artificial intelligence and machine learning algorithms, dedicated fraud prevention team, and an efficient manual process strikes the best balance between identifying fraud and providing an exceptional customer experience.
Radial Payment Solutions offers comprehensive merchant fraud protection strategies, allowing our merchants to navigate changes and challenges quickly. We offer:
- A data-driven approach to analyze and optimize rule strategy and quickly adapt to emerging fraud trends.
- A strong manual review support process to enhance the speed of the fraud feedback loop.
- Modernized machine learning pipelines to quickly iterate models and capture complex fraud patterns, providing robust risk signals.
- Anomaly detection processes to proactively identify suspicious activities and consumer behavior.
- Proactive collaboration with clients to share real-time insights and address emerging fraud threats and trends.
Speak with a fraud management expert today.
