Why Scams Spike During the Holidays
Every year, online fraud surges between October and January. The reason is simple: more people are shopping online, spending more money, and making decisions in a hurry. Scammers know this and take full advantage.
Here is what makes holiday shopping season so risky:
- Urgency and time pressure. Limited-time deals push you to buy quickly without researching the seller. Scammers create fake "countdown timers" and "only 2 left!" warnings to rush your decision.
- Higher spending. You are buying gifts for multiple people, so individual purchases may get less scrutiny. A fraudulent charge of $49 can hide among dozens of legitimate purchases.
- Emotional shopping. You want to find the perfect gift, especially for grandchildren or loved ones. Scammers exploit that desire by advertising hard-to-find items at too-good-to-be-true prices.
- Unfamiliar stores. You may try new online shops you have never used before, making it harder to tell a legitimate store from a fake one.
- Package tracking scams. With so many deliveries expected, fake "your package could not be delivered" texts and emails are far more convincing.
Did you know? According to the FTC, consumers reported losing over $300 million to online shopping scams during the 2024 holiday season alone. The average loss was $115 per person.
Black Friday and Cyber Monday Traps
Black Friday and Cyber Monday are the busiest online shopping days of the year, and scammers set elaborate traps well in advance. Here are the most common ones and how to spot them:
Fake Retail Websites
Scammers create websites that look nearly identical to major retailers like Amazon, Walmart, or Target. They buy web addresses that are close to the real thing, such as "amaz0n-deals.com" or "walmart-blackfriday.shop." These sites collect your payment information and never send the product.
How to spot them: Always type the store's web address directly into your browser. Do not click links in emails or social media ads. Check that the web address ends in ".com" and matches the official store name exactly.
Social Media Deal Ads
Fake ads on Facebook, Instagram, and TikTok promote unbelievable deals, often 80-90% off popular items. These ads lead to professional-looking but completely fraudulent websites.
How to spot them: If a deal seems too good to be true, it almost certainly is. A brand-new iPad for $49 is not a real deal. Check the company's official website to verify any promotion before clicking an ad.
Fake Coupon Codes and Deal Sites
Websites promising exclusive coupon codes often collect your email address and personal information. Some install tracking software on your computer or redirect you to scam sites.
Warning: Never download a "coupon app" or browser extension from an unfamiliar source. Stick to well-known coupon sites like RetailMeNot or the store's own coupon page.
Bait-and-Switch Products
Some sellers advertise name-brand products at deep discounts but ship cheap knockoffs. The photos show the real product, but what arrives is a poor imitation. This is especially common with electronics, handbags, and designer clothing.
How to protect yourself: Buy directly from the brand's official website or from trusted retailers. Read recent customer reviews, and be suspicious if a seller has no reviews or only five-star reviews posted on the same day.
Gift Card Scams to Watch For
Gift cards are one of the most popular holiday gifts, and scammers have developed several schemes to exploit them:
Tampered Gift Cards in Stores
Scammers visit stores and copy the numbers from gift cards on display racks, then cover them back up. When someone buys and loads money onto that card, the scammer drains the balance immediately.
How to protect yourself:
- Choose gift cards from the back of the rack, not the front
- Inspect the packaging for any signs of tampering, scratching, or resealing
- Make sure the protective sticker or scratch-off coating over the PIN has not been disturbed
- Buy gift cards directly from the retailer's website or customer service desk when possible
Fake Gift Card Balance Checkers
Websites claiming to let you "check your gift card balance" may actually be stealing your card number and PIN. Once they have that information, they drain the card immediately.
Safe alternative: Only check your balance on the official website of the company that issued the gift card, or call the phone number printed on the back of the card.
The "Pay With Gift Cards" Scam
No legitimate business, government agency, or utility company will ever ask you to pay a bill or fine using gift cards. If someone asks you to buy gift cards and read them the numbers, it is always a scam. This includes people claiming to be from the IRS, Social Security Administration, your electric company, or tech support.
Warning: If anyone asks you to pay for anything with gift cards, stop immediately. This is the number one red flag of a scam. Hang up the phone and do not call back.
Fake Charity Scams During the Holidays
The holiday season inspires generosity, and scammers exploit that by creating fake charities or impersonating real ones. Here is how to give safely:
How Fake Charities Operate
Scammers create charities with names that sound similar to well-known organizations. "American Cancer Research Fund" might sound real, but it is not the same as the "American Cancer Society." They contact you by phone, email, or social media with emotional stories and pressure you to donate immediately.
How to Verify a Charity
- Check before you give. Use Charity Navigator (charitynavigator.org), GuideStar (guidestar.org), or the BBB Wise Giving Alliance (give.org) to research any charity before donating.
- Search for the exact name. Look up the charity's exact legal name and check that it is a registered 501(c)(3) nonprofit organization.
- Ask for written information. A legitimate charity will happily send you detailed information about their mission, how donations are used, and proof of their tax-exempt status.
- Be cautious with crowdfunding. GoFundMe and similar platforms make it easy for anyone to ask for money. While many campaigns are legitimate, verify the person or cause before contributing.
Safe Giving Practices
- Donate directly through the charity's official website rather than clicking links in emails
- Use a credit card so you have fraud protection (never wire money or use gift cards)
- Be wary of charities that only accept cryptocurrency or wire transfers
- Do not feel pressured to donate on the spot; legitimate charities welcome donations any time
Tip: Save your donation receipts for tax purposes. A legitimate charity will always provide a receipt. If they cannot or will not, that is a warning sign.
Safe Deal-Hunting Strategies
You do not have to avoid online shopping to stay safe. Follow these strategies to find real deals without falling for scams:
Stick to Trusted Retailers
Shop with stores you already know and trust. If you want to try a new store, research it first. Search for the store name plus the word "reviews" or "scam" and see what comes up. Check their contact information, return policy, and how long they have been in business.
Compare Prices Before You Buy
If a deal looks amazing, check the same product's price at two or three other major retailers. If one store is selling something for dramatically less than everyone else, that is a warning sign. Real sales typically offer 20-40% off, not 80-90% off.
Use Credit Cards, Not Debit Cards
Credit cards offer much stronger fraud protection than debit cards. If a charge is fraudulent, you can dispute it and your credit card company will investigate. With a debit card, the money is taken directly from your bank account and can be much harder to recover.
Watch for Secure Checkout
Before entering payment information, check that:
- The web address starts with "https://" (the "s" means secure)
- There is a padlock icon next to the web address
- You are on the store's official website (check the web address carefully)
Use Store Apps for Major Retailers
Downloading the official app for stores like Amazon, Walmart, or Target from your phone's app store is safer than clicking links in emails or ads. The app connects you directly to the real store.
Tip: Many credit cards offer "virtual card numbers" for online shopping. This creates a temporary card number for each purchase, so even if a store is compromised, your real card number stays safe. Call your credit card company to ask if this feature is available.
Returns and Refund Fraud
Scams do not stop after you make a purchase. The return and refund process is another area where fraud occurs, especially during the holiday season.
Fake "Refund" Emails
After the holidays, scammers send emails claiming there is a problem with your order or that you are owed a refund. These emails include links to fake websites designed to steal your login credentials or financial information.
How to stay safe: Never click refund links in emails. Instead, log into your account directly by typing the store's web address into your browser, and check your order status there.
Return Label Scams
Some scam sellers provide return labels that go to wrong addresses or have incorrect tracking information. When you try to return a product, it never reaches the seller, and they deny receiving it.
How to protect yourself:
- Take photos of the item and packaging before shipping the return
- Use the return label provided by the store (or print one from their website), not one sent in a separate email
- Keep the tracking number and monitor the return shipment
- If using a third-party marketplace like eBay, always ship returns with tracking and signature confirmation
Overpayment Scams
If you sell items online after the holidays, watch for buyers who "accidentally" overpay you and ask you to refund the difference. The original payment is fraudulent and will be reversed, leaving you out the "refund" you sent.
Warning: If a buyer overpays and asks you to send money back, it is always a scam. Cancel the transaction and re-list the item.
Holiday Shopping Safety Checklist
Print this checklist and keep it near your computer during the holiday shopping season. Review it before every purchase:
- I am shopping on a website I trust and have typed the address directly into my browser
- The website address starts with "https://" and has a padlock icon
- The deal is reasonable, not "too good to be true" (80%+ off is suspicious)
- I have checked the store's return policy before purchasing
- I am paying with a credit card, not a debit card, wire transfer, or gift card
- I have not clicked any links in unsolicited emails or text messages
- I have verified any charity before donating using Charity Navigator or GuideStar
- I have inspected gift cards for signs of tampering before purchasing
- I am keeping records of all purchases, confirmation emails, and tracking numbers
- I have reviewed my bank and credit card statements for unfamiliar charges
- I have not shared my passwords or financial information by phone or email
- I know how to contact my bank quickly if I see a suspicious charge
Tip: Set a calendar reminder to check your credit card and bank statements weekly during November and December. Catching a fraudulent charge early makes it much easier to resolve.