The holiday season brings more customers, more orders and more payments, and fraudsters know it. When your team is busy and sales are flowing, a suspicious order is easier to miss. A few practical habits can help you protect your revenue without slowing down legitimate customers.

Know the common types of payment fraud

Most payment fraud that small businesses encounter falls into a handful of categories:

  • Stolen card use. Someone uses card details that do not belong to them, often online or over the phone.
  • Friendly fraud. A real customer makes a purchase and later disputes it with their bank, claiming they did not receive it or did not authorize it.
  • Card testing. Criminals run many small transactions to find out which stolen card numbers still work.
  • Overpayment and refund scams. A buyer “accidentally” overpays and asks you to refund the difference to a different card or account.
  • Fake invoices and payment requests. Messages that appear to come from vendors asking you to pay or update bank details.

Red flags to watch for

No single sign proves fraud, but these patterns deserve a closer look before you ship or deliver:

  1. Unusually large orders from first-time customers, especially for high-value items
  2. Billing and shipping addresses that do not match, or rush shipping to an unfamiliar location
  3. Several cards tried in a row for the same order
  4. A burst of small, failed or low-dollar transactions
  5. Pressure to skip normal steps, or requests to refund to a different payment method

When something feels off, contact the customer using information you can verify independently. Legitimate customers rarely mind a quick confirmation call.

Understand chargebacks

A chargeback is a payment reversal initiated through the cardholder’s bank, also called the issuer. When a customer disputes a charge, the funds can be pulled back from your account while the dispute is reviewed.

You can respond with evidence, a process called representment. Strong evidence often includes:

  • Signed receipts or chip-card transaction records for in-person sales
  • Delivery confirmation and tracking information
  • Copies of emails or messages with the customer
  • Your clearly posted refund and return policy
  • Proof that the service was provided as agreed

Respond promptly to every chargeback notice, since card networks and processors set deadlines for replies. Good records kept at the time of sale make this far easier.

Keep cardholder data secure

The Payment Card Industry Data Security Standard, known as PCI DSS, applies to any business that stores, processes or transmits cardholder data. Version 4.0’s future-dated requirements became mandatory on March 31, 2025, so if you have not reviewed your compliance recently, now is a good time.

Simple steps that support compliance and reduce your risk:

  • Never write down or store full card numbers, and never accept card details by email or text.
  • Use up-to-date, secure payment terminals and processing tools.
  • Limit who can access payment systems and give each person their own login.
  • Turn on multi-factor authentication for your processor and banking accounts.
  • Keep computers and software updated.

Prepare your team

Seasonal staff may be new to your systems. Before the rush, walk everyone through your payment procedures, the red flags above and who to call when something seems wrong. Make sure everyone knows they will never be in trouble for pausing a suspicious order to check with a manager.

Also remind your team about phishing. Criminals often send fake vendor invoices and “urgent” payment requests during busy periods, hoping someone will pay without checking. Verify any change to payment instructions by calling a known number.

Review your processing setup

The holidays are also a good time to look at how you are paying for card processing. Pricing models differ: interchange-plus pricing passes through the card network’s interchange cost plus a fixed processor markup, while flat-rate pricing charges one percentage regardless of card type. Which works better depends on your sales volume and the mix of cards your customers use.

If you would like a second opinion on your setup, our merchant services through eBurst Payments can review your statements and fraud tools with you. If your payment devices or computers need attention, our managed IT services can help keep them secure.

Protect your busiest season

A little preparation now can save you from costly losses later. Book a free consultation or call (772) 356-3550, and we will help you review your payment security before the rush.

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