By: Mia Huntington
Senior Vice President & General Manager, Elavon Canada

The holiday season sees consumers from across the country spending their hard-earned dollars on everything from decorations and housewares to gifts for family, friends and themselves. For most retailers, this means the period between late November and the end of December is full of holiday hustle and bustle, complete with high-volume sales, deep discounts and marketing promotions. But with increased sales comes more opportunities for fraud — both in-store and online. So, if you’re looking forward to a boost in your business this time of year, it pays to be prepared by learning to spot the sneaky signs of fraud. Here is everything you need to know and what you can do to protect yourself.

Return fraud. After a big sale or even come January, many retailers that accept returns will experience a wave of refunds and exchanges. Common types of return fraud include returning stolen merchandise, returning used merchandise, returning merchandise bought with counterfeit money or cards, and returning old or damaged merchandise using the receipt or packaging of a new item. If your inventory keeps unexpectedly shrinking, your return policy is not being followed or you start noticing a sharp increase in the number of returns, you could be experiencing return fraud. Some simple ways to prevent return fraud can be only issuing refunds to the same tender of the original purchase, providing gift receipts, requiring identification for returns so you can track suspicious behaviour, and training employees to consistently enforce your return policy.

eCommerce scams. In the online world, fraud can take many different forms, such as fake or stolen credit card information and promo code abuse. You can notice these types of fraudulent attempts by monitoring your customers’ shopping behaviour using the tools and analytics available through your content management platform, CRM system and payment processor. At Elavon for example, we offer our clients dashboards filled with easy-to-understand data insights. You’ll have access to a single system that can handle payments, refunds, chargebacks and the shipping paper trail. Use all this info to find out the average order amount, compare shipping and billing addresses, and compare these addresses with IP location. Anything that seems strange or out of place here is probably worth verifying.

Omnichannel fraud. As more shopping channels become popular — bricks-and-mortar, online using a desktop, mobile, and mail and phone — fraudsters are devising clever ways to exploit them all, including companies that sell across all spaces. They’ll take advantage of your weakest channel, such as a well-known lax application of your return policy in-store, to pull a scam where they know it will be easiest. Fraudsters are more likely to get away with this when there is a disconnect and communication breakdown between channels. Think of it as the left hand not knowing what the right hand is doing — you may have flagged an email address or credit card on your eCommerce site, but if your bricks-and-mortar store isn’t made aware of it, the scammer can get away with anything in-store. To solve this problem, choose an integrated payment processor built for omni channel sales, such as Elavon’s Converge platform. Not only will your customers get a seamless experience no matter where they connect with your brand, your business will be aware of and better equipped to handle problems holistically, protecting the entire operation.

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