Holiday Season Payment Failures: Why They Spike and How to Prevent Them
January 23, 2026
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February 6, 2026The festive season brings higher sales, more customers, and a big spike in online and in-store payments. It’s a great time for revenue, but it also opens the door to increased fraud attempts.
Criminals know businesses are busier, staff are stretched, and payment volumes are at their highest. That’s why now is the ideal time to tighten your payment fraud prevention measures across South Africa’s popular payment methods, from cards and EFTs to voucher transactions.
This holiday fraud playbook walks you through essential fraud checks, like EFT safeguards, practical voucher controls, and the internal procedures you need to protect your business.
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Common holiday scams and types of payment fraud
South African businesses face several predictable payment fraud trends between late November and mid-January. Here are a few that businesses should be on the lookout for:
- Card testing: Fraudsters run multiple small transactions to check if stolen cards are active.
- Friendly fraud: Customers dispute legitimate purchases after the holidays to get refunds.
- Chargeback abuse: Buyers claim non-delivery or unauthorised use to reverse payments.
- Fake proof-of-payment (POP) scams: Altered EFT screenshots, forged SMS notifications, or edited PDFs are used to collect goods before funds clear.
- Delayed settlement scams: Transfers made after hours or via non-instant banks to trick staff into releasing products prematurely.
- Voucher reselling and reuse: Used or partially redeemed vouchers are sold online or presented multiple times.
- Guessable voucher code attacks: Fraudsters generate or guess simple voucher codes with predictable patterns.
- Refund fraud: Scammers request refunds to new cards or accounts not used in the original transaction.
- Account takeover attempts: Criminals gain access to customer accounts to make purchases using stored cards, points, or vouchers.
- Social engineering of staff: Fraudsters pressure new or seasonal staff into bypassing verification steps.
Payment fraud prevention checks: 9 settings to turn on
The most effective payment fraud tools, such as bank account confirmation, are already available as part of your Netcash Payment Gateway. You just need to enable them.
These settings help block risky transactions before they reach your business bank account and prevent unnecessary chargebacks. Turning them on now makes a big difference during the festive rush.
Here are our top recommendations for checks to put in place for fraud detection in payments.
Card fraud checks for better payment fraud detection
Card fraud is rife in South Africa, with a jump of over 26% in 2024. The most prevalent form of attack is “card-not-present” fraud, where stolen card details are used for online payments.
Here are card-related checks to implement to strengthen online payment fraud prevention.
1. Enable AVS (Address Verification Service) for safer card payments
Address Verification Service (or AVS) compares the customer’s billing address with the card issuer’s records. When details don’t match, the transaction is flagged or blocked based on your risk settings. This is one of the easiest ways to prevent card-not-present fraud in South Africa.
AVS supports compliance with PCI DSS principles to ensure stronger customer verification. While many merchants overlook address verification, it significantly reduces exposure to counterfeit transactions, unauthorised purchases, and disputes that turn into chargebacks.
2. Use CVV verification to block high-risk card transactions
Card Verification Value (CVV) authentication is a simple yet powerful step in preventing payment fraud. The CVV is the 3- or 4-digit code on the back of the bank card that confirms the customer is physically holding the card or has legitimate access to it. These numbers are not stored digitally by merchants; this helps prevent digital payment fraud, such as “card-not-present”.
Fraudsters often have card numbers without the CVV, so blocking transactions with incorrect or missing CVVs is one of the most effective fraud checks you can enable. It also shows banks that you’ve taken proper security steps, which helps when disputing fraudulent chargebacks.
3. Activate 3D Secure for strong customer authentication
3D Secure adds a second layer of authentication, such as one-time PIN (OTP) verification or biometric approval in a banking app. It drastically reduces card fraud and protects your business from liability. When a 3D Secure transaction is authenticated, liability typically shifts away from you as the merchant, reducing costly chargebacks and dispute losses.
During the festive season, when transaction volumes surge, 3D Secure filters out a large percentage of risky payments. It’s one of the most important controls you can use for payment fraud mitigation, especially for online retail, travel, events, and hospitality businesses.
EFT fraud checks to strengthen your payment fraud detection
Online payment fraud is on the rise in South Africa, and EFT scams are a significant part of it. This payment method’s final and irrevocable nature makes it challenging to combat EFT fraud.
Here are a few digital payment fraud prevention settings to implement.
4. Set up velocity rules to stop card testing and rapid-fire payments
Velocity rules block multiple transactions from the same customer, card, email, or IP address within a short period. Fraudsters often run dozens of small payments in seconds to test stolen cards. Velocity limits stop these attempts immediately.
These rules are crucial in December because card testing surges and can overload your system if not managed. With Netcash and other payment platforms, you can customise the thresholds to suit your business risk profile.
5. Identify fake POPs (proof of payments) and reduce EFT fraud
Fake proof-of-payment fraud rises sharply during the festive season. Fraudsters send altered PDFs, SMS, or email notifications edited with free apps. Sometimes they send screenshots of past payments and POPs from different bank accounts to trick merchants into releasing stock.
Your team should never release goods or issue vouchers based solely on a POP. Instead, verify settlement directly through your payment gateway or banking platform. Real-time payment verification is one of the strongest ways to prevent EFT fraud and avoid stock losses.
6. Protect against delayed settlement scams
Delayed settlement is when customers pay after business hours or via banks that don’t offer immediate clearing. Fraudsters rely on busy staff to assume the payment has gone through.
The safest approach is to treat all EFTs as pending until the funds reflect in your account. Use real-time verification tools where possible, and train your team to differentiate between instant payments and delayed transfers.
Voucher fraud prevention checks for secure payments
Voucher payments can be easy targets for fraudsters. Scammers will claim to be from reputable retailers or suppliers. They then trick your staff into allocating gift cards, manipulate customers into buying fake gift cards, or demand upfront payments to claim unsolicited holiday offers.
Here are the settings you can enable to prevent payment fraud via vouchers.
7. Use single-use voucher codes to prevent abuse
Single-use codes are one of the strongest protection tools against voucher fraud. Once redeemed, the code becomes invalid, eliminating the risk of double-dipping. These codes also make it harder for fraudsters to guess or resell unused vouchers.
Use longer, unique strings rather than short or predictable numbers. Single-use vouchers help reduce disputes and fraudulent refund requests, supporting your broader payment fraud prevention strategy.
8. Configure voucher expiry settings to limit payment fraud risk
Voucher expiry dates help prevent long-term misuse and reduce the chance of vouchers circulating on resale platforms. Expiry settings also make it easier to track active vouchers, validate redemptions, and prevent out-of-date codes from being exploited.
Shorter expiry dates are best for high-risk categories such as promotional vouchers or holiday gift cards.
9. Improve staff handling procedures for secure voucher redemption
Human error is one of the biggest contributors to holiday voucher fraud.
Staff should verify voucher codes before redemption, check voucher balances, and confirm the correct customer identity where required. They should also avoid accepting screenshots of vouchers without following the proper validation processes.
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Team procedures to improve payment fraud protection
Technology does most of the heavy lifting, but your team plays the final, decisive role in preventing fraud. Simple internal procedures make a major difference.
Train your staff to:
- Verify all EFT payments using your banking or payment gateway portal
- Reject suspicious POPs, edited documents, or screenshots
- Follow a tiered approval process for refunds
- Identify mismatched customer details
- Note when customers become unusually pushy or rushed
- Document any irregular payment attempts immediately
These steps build a strong defence layer and reinforce your compliance with PCI DSS standards while reducing your exposure to chargebacks and stock losses.
Post-fraud playbook: Steps for payment fraud management
Even with strong controls, fraud attempts may still occur. Your response determines how effectively you contain losses and prevent repeat attacks.
Follow these steps to improve your post-fraud processes:
- Document the transaction. Gather logs, payment details, and communication.
- Block the customer details such as card numbers, emails, IPs, and device fingerprints.
- Report suspicious activity to your payment provider for investigation.
- Review risk settings. Increase velocity rules or adjust 3D Secure enforcement.
- Update team procedures. Share findings immediately.
- Respond to chargebacks properly. Include delivery notes, screenshots, and proof of 3D Secure authentication.
A strong post-fraud response reduces the chance of follow-up attacks and strengthens your business against future incidents.
Frequently asked questions about payment fraud prevention techniques
Avoid holiday stress with payment fraud prevention tools from Netcash
The holiday season doesn’t have to mean higher risk. With the right fraud checks, clear team procedures, and reliable tools, you can protect your business from card fraud, EFT scams, voucher misuse, and expensive chargebacks.
Netcash offers built-in features and robust payment fraud prevention tools specifically designed for South African businesses during peak trading times.
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Author:
Bennie Bester
Solutions Architect
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Bennie Bester is a Solutions Architect at Netcash, specialising in designing and implementing innovative payment and integration solutions. With a passion for technology and efficiency, Bennie focuses on creating seamless systems that empower businesses to simplify payments, improve processes, and scale with confidence.
