From Christmas cheer to checkout fear: The cost of online payments fraud during the holidays

For many people, the Christmas is the season for joy, connection and giving…  but, it can also bring a much less festive guest – online payment fraud.

As billions in online purchases surge through online checkouts in just a few short weeks, the stakes skyrocket for everyone involved.  The holiday season doesn’t just amplify opportunity for retailers, consumers, and issuers; it magnifies risk.

For retailers: more orders = more opportunities for fraudsters

For most retailers, the Christmas season is a time of enormous revenue potential, and for some it is even make or break. Online sales in the 2024 holiday season alone topped US$1.2 trillion globally. That’s a staggering wave of revenue. But with so many people entering their card details online, it also provides huge opportunity for fraudsters.

The numbers tell the story.

In the UK, there were over 16,000 reports of online shopping fraud amounting to over £11.5 million between November 2023 and January 2024. According to The Guardian, fake clothing and high-end tech listings on social media were among the common ploys used to dupe people.

Overall, fraud losses in the UK rose to £572.6 million in 2024, of which 70% were from card-not-present transactions.

And in the US, one in eight Americans (13%) committed first party fraud (when customers dispute genuine purchases or abuse return policies) during the 2024 holiday season, of which 40% was admitted to by Generation Z aged consumers. Nearly all offenders (90%) cited financial struggles as their motivation, including factors such as inflation and high credit card interest rates.

The threats are multi-layered: stolen card details, chargebacks, friendly fraud, and fraudulent returns all eat into margins. And retailers must manage these risks while preserving a friction-free shopping journey. Fraud controls that are too aggressive can cause false declines and lost sales; controls that are too loose open the door to fraudsters.

Either way, this delicate balance is the decider between whether holiday profits are protected or destroyed.

For consumers: fraud steals more than just money

The inconvenience of a compromised card is disruptive at any time of year. But during the holidays when the urgency to purchase ramps up, it could feel catastrophic. Having a blocked card and being forced to wait seven to ten days (or more) for a replacement isn’t just an inconvenience, it’s an enormous stress that could mean no gifts under the tree (or at least, not the ones you planned).

UK holiday fraud alone led to over £11 million in losses in 2024. The average loss per victim in those cases was about £1,844. And the emotional toll is clear; surveys show that nearly 64% of US consumers and more than half of UK shoppers worry about being targeted by a scam while holiday shopping in 2024.

For consumers, fraud doesn’t just drain bank accounts, it also drains time, energy, and most painfully, the joy of the festive season.

For issuers: counting the hidden costs

Behind the scenes, issuers are battling their own holiday season headaches. Every compromised card means more than lost revenue.

Card replacement costs are not trivial. Issuers must cover the cost of physical card production, secure shipping, activation, sometimes courier delivery, plus the administrative cost of handling these requests.

Fraud losses and chargebacks costs equate to lost revenue, reimbursement of fraudulent charges, managing and investigating disputes, and dealing with regulatory or reputational fallout.

And with compromised cards comes additional operational and call centre stress. Customer service agents, fraud detection teams, and operations staff all face escalating workloads during the holiday spike, which can cause delays and mistakes that no doubt erode customer trust.

And because of this, customer loyalty is at risk. A single negative experience such as a delayed replacement card, unresolved fraud, or a denied purchase can push a cardholder to switch banks.

Globally, e-commerce fraud losses already reach into the tens of billions annually. For issuers, the holiday surge doesn’t just amplify the financial hit; it intensifies the risk of losing customers permanently.

CPoI®: The gift that keeps on giving

At the heart of all these challenges lies one vulnerability: the reliance on card-not-present transactions. And that’s why Burbank’s Card Present over Internet® (CPoI®) is so powerful.

Rather than accepting that online transactions must always be card-not-present (and therefore vulnerable), CPoI® brings the high assurance security of in-store card-present taps to ecommerce.

For retailers CPoI® means significantly less fraudulent orders and chargebacks, no false positives, and stronger revenue protection.

For consumers CPoI® means peace of mind and uninterrupted shopping.

And for issuers CPoI® means lower cost and greater loyalty.

CPoI® is a simple solution with powerful impact. If we change the playing field from vulnerable card-not-present transactions to card-present, we remove the leverage fraudsters have relied on for decades.

Keep the season merry

The holiday surge won’t get any smaller. Online shopping will keep growing, and so will fraud attempts. What matters is how the industry responds.

CPoI® offers a new path. One where retailers protect revenue, consumers shop with confidence, and issuers build loyalty instead of fighting fires. It’s a future where digital payments can be both seamless and secure, the way they should be.