Fraudster Holiday Season Must-Haves

By?Doriel Abrahams, Head of U.S. Analytics

Whether you’re naughty or nice, holiday shopping is probably on your to-do list. In 2022, the holiday shopping season started earlier than ever as many consumers are planning ahead to prevent problems – such as supply chains and delivery delays – from getting in the way of the perfect gift.?

This year, many customers are also price-conscious, which is reflected in both coupon use (up 11% from 2021) and, for some customers, a desire to purchase items now to avoid potential price increases later on.

However, earlier trends in holiday shopping also mean fraudsters can get in on the action earlier than usual – and we already see some trends around the hottest items on fraudsters’ wishlists.

What Attracts Fraudsters?

Professional fraudsters rarely target things they want for themselves – though sometimes, amateur fraudsters will steal something they just can’t resist. Typically, what makes an item a must-have from the criminal perspective is simple: How effectively can they monetize it?

Several considerations play into the fraudster’s equation in deciding which items they want, including:

• Does it resell? It’s not worth going to the trouble of stealing something and discovering no one wants to buy it. Fraudster favorites mirror the items customers want – especially during the holidays when it’s so easy to hide among the rush and sell the season’s hot products. Specific fraudsters often specialize in certain industries because they know where and how to resell them.
• Is it in the right price range? Fraudsters know that the most expensive items receive a lot of scrutiny, so they’ll put effort into figuring out where retailers put their limits – and then steal items just below those limits to avoid extra investigation.?
• Is it easy to get hold of? Criminals need to get their hands on what they’ve stolen. If fraudsters have found loopholes they can use to attack particular retailers, they’ll be more likely to go after the goods the merchant sells.
• Is the ROI good? Ultimately, it’s all about ROI. The fraudster wants to minimize the effort required for the theft for the maximum benefit. So the balance between the time and effort and the profit made at the end has to make sense.

It’s Time for Fraud

Fraudsters like to take advantage of the holiday season because it’s easier to conceal illicit activities when so many people are doing the same activities legitimately. A flood of customers head online every year to shop for the holidays, using a wide variety of devices and browsers, coming from diverse locations, and demonstrating not just lots of different buyer behaviors but even behaviors that are different from the rest of the year.?

For example, people often try new retailers if they want a specific item for someone special. Our data also shows that people often take ~7% longer in their purchase process at this time of year compared to the rest of the year.?

Later in the holidays, fast shipping becomes a priority as people panic about getting their gifts in time. Fraudsters love the quick shipping offers this time of year as it benefits them, too; it’s less likely that the victim will notice what’s happening before it’s too late.?

All this makes it harder to benchmark “normal activity” than usual – making it easier for fraudsters to go undetected.

Moreover, companies that rely on manual reviews will be more prone to struggle during the holidays. They’re between a rock and a hard place; either they staff up temporarily, in which case their team won’t have the necessary expertise during this critical period, or they have the regular team working overtime to deal with all the extra orders in which case the time pressure each reviewer is under means mistakes are more likely to happen.?

The Fraudster’s 2022 Wishlist

While the underlying reasons behind fraudster holiday favorites don’t change, the specific items they target the most shift from year to year. Here are the items that are storming the fraudster charts so far this holiday season:

• Cozy fleeces - A range of brands are popular with fraudsters when it comes to these snuggly items, but they’re especially into the ones that are mid-range when it comes to price; not the cheapest ones available, but not the luxury versions that might get extra scrutiny. Easy to resell as people are shopping for winter weather, these items have great ROI.
• The latest and greatest fashion sneakers - Sneakers are hot items on the criminal side all year round, and the holidays are no exception. Bots are particularly prevalent in this industry, making attacks en masse especially common.?
• Household necessities - Consumers often buy niche items online to match their specific appliances or household needs. It can be easier to get precisely what you need online. Fraudsters, however, prefer generic items and parts, which are easier to resell, and they’re still going after them during the holidays this year.?
• Cell phones - Everyone needs a good cell phone, and fraudsters seem to agree. Cell phones are both relatively high-ticket items and easy to resell, making them a “golden combination” for fraudsters.
• Gaming - Both consoles and digital goods are popular with fraudsters this year. Often the popularity of a particular console or new game with virtual goods will outstrip others, but this year they’re attacking a pretty even spread. That might shift, of course, as the holiday season continues.
• Gift cards - The season of buying gift cards hasn’t fully kicked off for consumers yet. In previous years, the trends show this generally spikes after Black Friday and Cyber Monday. But fraudsters aren’t waiting. They’re going after fashion store gift cards in particular compared to the rest of the year.

As a fraud analyst, the holiday season is always fascinating because fraudsters see it the same way many retailers do: a short period, with a significant impact on their annual earnings. That puts pressure on fraudsters and fraud fighters alike. Personally, I’m always interested to see how fraud attacks evolve over the holidays – and am also grateful to be part of stopping them.?

Happy Holidays from the Forter team!

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About Forter

Forter is the Trust Platform for digital commerce. We make accurate, instant assessments of trustworthiness across every step of the buying journey. Our ability to isolate fraud and protect consumers is why?Nordstrom, Sephora, Instacart, Adobe,?Priceline, and?other leaders?across industries have trusted us to process more than $500 billion in transactions.?Click here to learn more.