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How to prevent chargebacks and ecommerce fraud during the holidays.
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How to prevent chargebacks and ecommerce fraud during the holidays.

By: Moneris Team
November 13, 2026 clock Calculating time...



Key takeaways

  • Holiday disputes trail sales by weeks, so the records you keep in December decide which cases you can answer in the new year.
  • Losses cluster in card-not-present sales, first-time customers and rushed shipping, which tells you where controls belong first.
  • Friendly fraud and criminal fraud need different fixes, with screening for one and clear communication for the other. 

Holiday chargebacks and fraud are predictable, which means you can prepare for most of them before your first seasonal sale goes live.

Fraud reaches shoppers and the businesses that serve them at a scale that's hard to ignore. People in Canada reported losing more than $704 million to fraud in 2025, and only a small share of incidents is ever reported. Stolen card details from those schemes don't sit idle. They get tested and spent where order volume is highest and review time is shortest, and that describes most stores from mid-November to early January.

Seasonal advice usually stops at "watch for suspicious orders". That's too vague to act on when you're short-staffed and shipping late into the evening. Losses concentrate in a handful of places you can name ahead of time, such as online orders, first-time customers, rushed shipping and the weeks after gifts are opened. Chargeback prevention works best when your effort goes to those places first.

Why chargebacks increase after the holiday season

Chargebacks increase after the holiday seasons because disputes trail purchases by weeks. Cardholders review December statements in January, gift recipients find problems after the return window feels closed and stolen cards used during the rush are finally noticed. Dispute windows often run to about 120 days, so a November sale can still be challenged in March.

Picture a gift shop that ships 400 online orders in the first two weeks of December. A parcel marked as delivered goes missing from a porch, a relative doesn't recognize the store name on a shared card and a customer who can't reach anyone by phone on Boxing Day calls the bank instead. None of those cases involves a criminal. Each one still arrives as a dispute with a deadline attached.

The delay matters because the evidence you need was created weeks earlier. Tracking numbers, signed receipts and customer emails are easy to save on the day of the sale and painful to rebuild in February. Your seasonal staff may have moved on by then too, so nobody remembers the order. Treat every December transaction as one you might have to explain later.

Where holiday fraud losses concentrate

Holiday fraud losses concentrate in card-not-present sales, where nobody inserts a chip card or enters a PIN. Online checkouts, phone orders and manually keyed transactions carry most of the exposure, and the liability for an unauthorized purchase in those channels usually sits with you. In-store chip and tap payments carry far less risk.

The online share of sales also peaks at the moment your attention is thinnest. Retail ecommerce sales in Canada reached $4.3 billion in December 2025 and made up 6.1 per cent of total retail trade, up from 5.8 per cent a month earlier. More of your revenue moves through the ecommerce channel with the weakest built-in protection during the same weeks you have the least time to review orders.

Within that channel, the pattern narrows further. Losses cluster around first-time customers, orders well above your average basket, expedited shipping and billing and shipping addresses that don't match. Gift cards and small electronics attract the most attempts because they resell easily. A bakery taking a few phone orders has a very different exposure than a store shipping headphones across the country, so map your own risk before you copy someone else's rules.

How friendly fraud differs from criminal fraud

The main difference between friendly fraud and criminal fraud is who made the purchase. Criminal fraud involves a stolen card or account used without the cardholder's knowledge. Friendly fraud starts with a real customer who later disputes a legitimate charge, often out of confusion, impatience or regret. It needs a different response.

Screening tools stop criminals at checkout, yet they do very little about a genuine customer who forgets a purchase. That second group responds to clarity. A billing descriptor that matches your store name, a confirmation email with the order details and a return policy people can find in one tap will prevent many of those calls to the bank.

Dispute source

What usually prevents it

Stolen card used for an online order

Address and security code checks plus 3-D Secure shift more of the risk away from your store.

Customer doesn't recognize the charge

A billing descriptor that shows your trading name makes the statement line familiar.

Parcel reported as not received

Tracking and delivery confirmation on higher-value orders give you proof to submit.

Gift returned after the policy window

An extended holiday return period keeps the conversation with you instead of the bank.

Duplicate or incorrect amount charged

A daily reconciliation catches errors early enough to refund before a dispute is filed.
Sorting your past disputes into these groups takes about an hour, and it tells you which fix will pay off soonest.

Ecommerce fraud prevention tools to switch on before the rush

Ecommerce fraud prevention for a small business starts with the tools already inside your payment gateway. Address verification, card security code checks and 3-D Secure cover the basics. Risk scoring adds a layer that weighs each order against known fraud patterns and decides to approve, decline or hold it for review.

Consider an online clothing store that normally reviews odd-looking orders by hand. That habit works at 20 orders a day and collapses at 200. Automated scoring looks at device, location, order history and velocity in the time it takes the page to load, so only the borderline cases reach a person. Moneris offers fraud tools for online payments that include Kount, which scores card-not-present transactions against patterns seen across a large network of merchants.

Timing is the catch. Rules tuned in a rush tend to be too loose or too strict, and strict rules decline good customers at the worst moment. Set your thresholds in October, watch a few weeks of normal traffic and adjust before the first promotion. A declined gift order rarely comes back.

Chargeback prevention habits for your counter and your inbox

Chargeback prevention depends on routine as much as software. Card-present sales stay protected when the customer inserts, taps or enters a PIN on the terminal. Disputes of every kind are easier to win when the order record is complete. Small habits repeated on every sale are what hold up under holiday volume.

A short list for the team covers most of it.

  • Use chip, tap or PIN for every in-person sale and avoid keying card numbers by hand.
  • Send an order confirmation that names your store, the items and the total.
  • Require tracking on all shipments and a signature on high-value ones.
  • Post holiday return dates at checkout, on receipts and in confirmation emails.
  • Answer customer messages within one business day, including over the break.
Seasonal hires need this more than anyone. A new cashier who keys in a card number because the chip reader beeped twice has just removed the protection that the terminal provides, and nobody will know until the dispute arrives in February. Ten minutes of training on the first shift is cheaper than one lost case. Write the steps on a card beside the till and name one person who owns dispute notices, since response deadlines are short and they don't pause for holidays.

Preparation in the fall decides how January feels

Holiday fraud and chargebacks reward the businesses that prepare before the rush and punish the ones that react during it. Your exposure follows a pattern you can read in your own dispute history. Put controls where losses concentrate, keep records as you go and January becomes a month of ordinary bookkeeping.

Perfection isn't the goal. Some disputes will arrive no matter what you do, and a few declined orders will turn out to have been genuine. What you're after is fewer surprises and a faster, calmer response when one lands. That comes from knowing which orders deserve a second look and which ones should sail through.

Most owners already know their weak spot. It might be phone orders, a checkout that skips the security code or a return policy nobody can find. Fix that one thing first, then the next. If you'd like help matching fraud settings to the way you sell, Moneris supports businesses across Canada with fraud prevention tools for online and in-person payments and 24/7 support in English and French. The busiest weeks will always be busy, and they don't have to be the costliest.

FAQs

  • The best way to prevent chargebacks during the holiday season is to reduce customer confusion and keep thorough transaction records. Make sure your return, shipping and refund policies are easy to find, use a billing descriptor customers will recognize on their card statements and send order confirmations with tracking information. Keeping proof of delivery, receipts and customer communications organized can help you resolve issues before they become disputes and provide evidence if a chargeback occurs.

  • Small businesses can reduce ecommerce fraud by using fraud tools such as Address Verification Service (AVS), Card Verification Value (CVV) checks, and 3-D Secure authentication. These tools help confirm that the person making a purchase is the legitimate cardholder. Monitoring for unusual buying patterns, such as high-value orders, multiple cards being used for a single purchase or requests for expedited shipping, can also help identify suspicious transactions before they result in losses.

  • Chargebacks often increase after Christmas because the holiday shopping season generates a higher volume of transactions, deliveries, returns and customer inquiries. Some customers may not recognize a purchase on their statement, while others may file disputes due to shipping delays, gift returns or dissatisfaction with an order. Fraud also tends to rise during busy shopping periods, leading to more unauthorized transaction claims and disputes in the weeks following the holidays.

  • To protect your store from holiday fraud, combine strong payment security tools with careful transaction monitoring. Verify customer details with AVS and CVV checks, enable 3-D Secure for online purchases and watch for unusual purchasing behaviour, especially during peak shopping periods such as Black Friday and Cyber Monday. Reviewing high-risk orders before fulfillment and responding quickly to suspicious activity can help reduce fraud-related losses and chargebacks.

  • Canadian merchants can reduce chargebacks by providing clear order and billing information, maintaining accurate transaction records and communicating proactively with customers throughout the purchase and fulfillment process. Tracking shipments, making customer support easy to access and responding promptly to chargeback notifications can significantly improve dispute outcomes. For online sales, security tools such as AVS, CVV verification and 3-D Secure can help prevent unauthorized transactions before they become chargebacks.

  • Friendly fraud occurs when a legitimate cardholder disputes a purchase they actually made. This can happen when customers do not recognize a charge, forget about a purchase or have a family member use their card. Holiday shopping often increases friendly fraud because people make more purchases, buy gifts for others and may not immediately recognize transactions on their statements. Clear billing descriptions, order confirmations and accessible customer support can help reduce these disputes.

  • If you receive a chargeback, respond as quickly as possible and gather all supporting documentation related to the transaction. Depending on the reason for the dispute, this may include receipts, proof of delivery, customer communications, order confirmations and records showing the customer accepted your terms and policies. Missing response deadlines can result in an automatic loss, so it's important to act promptly.

  • Yes. Fraudsters often target Black Friday, Cyber Monday and other peak shopping periods because transaction volumes are higher and merchants may have less time to manually review orders. Increased demand, rush shipping requests and large purchase volumes can make fraudulent transactions more difficult to spot. Using automated fraud prevention tools can help businesses stay protected while maintaining a smooth checkout experience.

Author Profile

Moneris Team

Moneris Team

Moneris is a leading provider of payment processing solutions in Canada. Our blog is your go-to resource for insights into the ever-evolving world of payments. We cover everything from the latest industry trends and technologies to practical advice for businesses of all sizes. Our blog's mission is to spotlight small businesses and provide resources that help them succeed in today's economy. Blog articles are written by members of Moneris' in-house marketing team with support from internal product and industry experts.

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