As Holiday Shopping Soars, So Does Ecommerce Fraud

As Holiday Shopping Soars, So Does Ecommerce Fraud

December 4, 2020         Written By Heaven Speirs

Despite the COVID-19 pandemic, the holiday shopping season thrived over Thanksgiving, Black Friday and Cyber Monday. However, research shows that the strong sales were backed with equally strong ecommerce fraud. The more online purchases are made, the more fraudsters look to take advantage of unsuspecting shoppers.

Thanksgiving Weekend Sales Increase But Fall behind Industry Expectations

Throughout the month of November 2020, Americans spent a total of $100.3 billion, according to Adobe Digital Insights. That is less than the projected spending volume, but that doesn’t mean sales were down. In fact, every day of Thanksgiving weekend saw sales growth year-over-year (YOY):

  • Day before Thanksgiving: 9% YOY Growth
  • Thanksgiving Day: 5% YOY Growth
  • Black Friday: 6% YOY Growth
  • Small Business Saturday: 19% YOY Growth
  • Cyber Monday: 1% YOY Growth

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Most notably, there was a significant increase in Small Business Saturday sales. This may be due in part to the coronavirus pandemic, with many businesses struggling to make ends meet. Americans have joined together to help these businesses during an unprecedented time, and it may be just enough to save some of them from shutting down for good.

Strong Sales Led to High Ecommerce Fraud

According to the TransUnion Holiday Retail Report, ecommerce fraud spiked over the 2020 Thanksgiving weekend. Fraud rates are up 59% compared to the same time 2018, and up 14% compared to the rest of this year.

Not surprisingly, Cyber Monday reported the highest volume of online fraud, representing 26% of suspicious transactions. This was followed by Small Business Saturday at 12% and Thanksgiving at the same 12%.

TransUnion found that 50% of consumers were worried about online fraud over the holidays, with Gen X reporting the highest level of concern. This may be due to an increase in COVID-19 related fraud. The Consumer Financial Hardship Study reveals a 28% increase in COVID-related fraud between April and November 2020.

How to Protect Yourself against Ecommerce Fraud

If you’re worried about ecommerce fraud as you complete your holiday shopping list, these tips will help you protect your finances:

  • Avoid following links from emails. If you see a good deal from a trusted retailer, go directly to the retailer’s site. Clicking on a link could put you at risk of phishing emails, which are particularly common over the holidays.
  • Carefully think about each purchase before completing the transaction. Online fraudsters capitalize on the fact that holiday shoppers make quick, frequent purchases. Don’t let the desire for a deal cloud your judgment.
  • Monitor your financial accounts closely. This includes credit cards, bank accounts and prepaid card accounts. If you notice suspicious activity, report it right away.
  • Avoid purchases with unfamiliar brands. Support local businesses or brands you trust, but avoid submitting your payment details on an unfamiliar website.
  • Use one card for all holiday purchases, if possible. If fraud occurs, you only have to replace that one card.
  • Change your passwords and use unique passwords for each website. That sounds like a bit of a hassle, but it could make all the difference. If an online fraudster gets your email and password from a website, they will likely try the combination on other sites. This is when a targeted issue becomes a widespread problem. You can avoid it by proactively protecting your online accounts.

The information contained within this article was accurate as of December 4, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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heaven

About Heaven Speirs

Heaven Speirs is a contributing writer for LowCards.com. She remains up-to-date with the latest developments in the credit card industry and the financial sector as a whole. Heaven has over 10 years of experience in online journalism, the bulk of which has been focused on personal finance. Heaven attended Oklahoma State University, where she discovered her talent for research and content creation. In her spare time, Heaven enjoys painting, playing poker, and spending time with her husband and three dogs.