A practical guide for high-growth Shopify brands

The holiday season brings exciting challenges: surging sales, new customers, and record-breaking revenue. But there’s a darker side too, fraud increases by 30% during the holidays, according to the FBI. In 2025 alone, U.S. eCommerce brands lost $1.00 for every $4.60 earned due to fraudulent activity. By 2029, total global losses are expected to hit $107 billion.

For scaling DTC brands shipping 1,500+ orders monthly, fraud isn’t just a financial hit, it’s a threat to customer trust and operational efficiency. The good news? AI analytics can help you spot suspicious activity, understand buyer behavior, and prevent chargebacks before they happen.

This guide walks through how to use AI to protect your margins and why combining AI insights with customer feedback creates an unbeatable defense this holiday season.

The Hidden Red Flags Most Brands Miss

Picture this: A new order comes through at 2:00 AM. Multiple high-ticket items, overnight shipping, everything looks clean. The billing address checks out, the credit card clears, and Shopify’s fraud tool stays quiet.

Three days later, a chargeback notice lands in your inbox. You’ve lost the merchandise, the shipping costs, and the processing fees, all because of subtle warning signs that flew under the radar:

• Shipping and billing addresses in different names, just miles apart
• Email address with no purchase history
• Order timing outside normal customer patterns
• Unusual product combinations for a first-time buyer

During peak season, when your team is juggling hundreds of orders daily, these red flags get lost in the noise.

Why Holiday Fraud Hits Different

November and December transform your operations. Order volume skyrockets, but review capacity stays flat, creating perfect conditions for fraud to slip through.

Here’s what makes holiday fraud so tricky:

Manual reviews can’t scale: What works in October becomes impossible in December. Your team can’t manually review every order when volume triples overnight.

New customers flood your site: 84% of shoppers buy from new stores during the holidays, and 93% of those stores are eCommerce. When everyone’s a first-time buyer, traditional “new customer” fraud filters become unreliable.

Speed pressure increases risk: Customers expect 2-3 day delivery. That urgency pushes brands to approve orders faster and skip deeper fraud analysis, exactly when they need it most.

Return fraud explodes: The average eCommerce return rate is 30%, and it triples during the holiday season. Fraudsters know this and exploit lenient return policies when brands are overwhelmed.

How AI Analytics Protects Your Bottom Line

AI-powered fraud detection acts as your always-on security team: learning, adapting, and scaling instantly without adding headcount.

Instead of relying on static rules that fraudsters easily outsmart, AI systems analyze real-time transaction data to catch patterns humans simply can’t see.

What AI Fraud Detection Does for Shopify Brands:

Spots behavioral anomalies: Identifies mismatched addresses, unusual order timing, suspicious email domains, and device fingerprinting inconsistencies.

Learns from every transaction: AI continuously adapts as fraud tactics evolve, getting smarter with each order it processes.

Cross-references massive data sets: Recognizes patterns across thousands of orders without slowing fulfillment or creating customer friction.

Detects return abuse: Uses historical data to identify serial returners, late chargebacks, and refund fraud schemes.

Prevents friendly fraud: Catches legitimate customers claiming they never received items or requesting chargebacks after delivery.

Here’s what matters: AI doesn’t replace your team, it amplifies their capabilities. In fact, 43% of brands using AI fraud detection report higher team efficiency, freeing CX and operations teams to focus on legitimate customers who need help.

The Power of Customer Feedback in Fraud Prevention

While AI catches suspicious transactions, customer feedback provides the qualitative context that algorithms can’t capture.

Post-purchase surveys and return feedback forms reveal critical insights:

• Whether customers received the correct item or noticed unauthorized activity
• Patterns of dissatisfaction that may signal fraudulent behavior
• How legitimate customers perceive your fraud-prevention actions (like ID verification or delayed shipping)
• Real customer voices that help distinguish between fraud and genuine issues

Integrating customer feedback data into your AI dashboard helps refine risk models and improve accuracy over time. The result? Smarter fraud prevention and better customer experience, even during your busiest weeks.

How Customer Feedback Strengthens AI Models:

Validates suspicious activity: When a flagged order receives positive feedback, your AI learns to adjust risk scoring for similar future transactions.

Identifies new fraud patterns: Customer complaints about unauthorized purchases help AI spot emerging fraud tactics before they become widespread.

Reduces false positives: Feedback helps distinguish between legitimate rush orders and actual fraud, preventing you from declining good customers.

Improves post-purchase experience: Understanding why customers initiate returns helps separate genuine issues from return fraud schemes.

Your Action Plan: Getting Started with AI Fraud Prevention

If your team is gearing up for the holidays, here’s how to strengthen your fraud defenses now:

1. Audit Your Current Setup

Review Shopify’s built-in detection tools and identify blind spots. Most brands discover they’re only catching 40-60% of fraudulent activity with basic tools alone.

2. Connect Your Data Sources

Integrate payment, shipping, returns, and customer survey data into one analytics platform. Siloed data means missed patterns and higher fraud rates.

3. Implement AI Fraud Monitoring

Use AI analytics to pull transaction data into a unified dashboard where you can ask real-time questions and receive instant fraud insights. Look for solutions that integrate directly with Shopify Plus.

4. Create a Feedback Loop

Deploy post-purchase customer surveys to validate suspicious transactions and continuously improve AI learning models. This human-in-the-loop approach catches what algorithms miss.

5. Train Your Team

Ensure CX, fulfillment, and finance teams know how to interpret AI signals and escalate questionable orders efficiently. The best AI tools are useless if your team doesn’t trust or understand them.

6. Set Clear Escalation Rules

Define thresholds for automatic approval, manual review, and automatic decline. Your AI should handle obvious cases while flagging edge cases for human review.

How Corso Helps Shopify Brands Fight Holiday Fraud

Corso’s AI-powered analytics dashboard gives you real-time visibility into your entire post-purchase operation, including fraud detection signals that traditional tools miss.

Here’s how Corso protects high-growth brands during peak season:

Unified Data Dashboard: Track shipping issues, return patterns, and customer feedback in one place. Spot fraud trends before they impact your bottom line.

AI-Powered Insights: Ask natural language questions like “Show me all orders with mismatched addresses from the past 48 hours” and get instant answers.

Customer Feedback Integration: Automatically collect post-purchase surveys through your branded customer portal, feeding valuable context back into your fraud detection system.

Return Pattern Analysis: Identify customers with suspicious return behavior, like ordering multiple sizes with the intent to return, before approvals go through.

Performance Metrics That Matter: Track key fraud indicators alongside operational metrics like CSAT scores (we average 97%), response times, and return rates.

Seamless Shopify Plus Integration: Corso plugs directly into your existing tech stack, working with tools like Gorgias and Gladly to create a complete picture of customer behavior.

The best part? Corso’s performance-based pricing means you only pay for results. No fixed costs eating into your margins during your most profitable season.

Real Results from Scaling Brands

High-growth Shopify brands using Corso’s AI analytics dashboard report:

• 40% reduction in fraudulent transactions during peak season
• 30% faster fraud review times
• 25% decrease in false positives
• Under 1-hour response times for legitimate customer inquiries
• 97% CSAT scores even during the holiday rush

Common Fraud Schemes to Watch For

Understanding how fraudsters operate helps you spot red flags faster.

Card Testing

Fraudsters make small purchases to test stolen card numbers before placing large orders. Watch for multiple failed transactions from the same IP address or device.

Account Takeover

Criminals hijack legitimate customer accounts to place fraudulent orders using stored payment methods. Look for sudden changes in shipping addresses or unusual purchase patterns.

Triangulation Fraud

Fraudsters create fake storefronts, accept customer orders, then purchase items from legitimate stores using stolen cards and ship directly to customers. The original cardholder disputes the charge, and you lose the merchandise.

Return Fraud

Customers order expensive items, swap them with counterfeits or broken items, then return the fakes for full refunds. The average return rate for online purchases is 30%, making this especially prevalent.

Friendly Fraud

Legitimate customers claim they never received items or request chargebacks after delivery. This accounts for 40-80% of all chargeback fraud and is notoriously difficult to prevent.

The ROI of AI Fraud Prevention

Investing in AI fraud detection delivers measurable returns:

Direct cost savings: Every prevented fraudulent transaction saves you the merchandise cost, shipping fees, and chargeback penalties (typically $15-$25 per incident).

Operational efficiency: Teams spend less time manually reviewing orders and more time helping legitimate customers. Brands report 100+ hours saved monthly.

Customer retention: False positives, declining legitimate orders, damage customer relationships. Better fraud detection means fewer good customers get turned away.

Chargeback ratio protection: Keeping chargeback rates below 1% protects your payment processing relationship and prevents merchant account restrictions.

Brand reputation: Preventing fraud protects customer data and maintains trust. One major fraud incident can damage years of brand building.

For a brand shipping 10,000 orders monthly with a 2% fraud rate and $100 average order value, preventing just half of fraudulent transactions saves $10,000 monthly, $120,000 annually.

Preparing Your Team for Holiday Success

Technology alone doesn’t prevent fraud. Your team needs clear processes and training.

Create a Fraud Playbook

Document your escalation procedures:

• What AI signals trigger automatic review?
• Who handles high-risk orders?
• How quickly must reviews happen?
• What customer communication happens for delayed orders?

Set Response Time Goals

During peak season, delayed fraud reviews create customer service nightmares. Aim for:

• Low-risk orders: Instant approval
• Medium-risk orders: 2-hour review
• High-risk orders: 4-hour review with customer outreach

Plan Customer Communication

When you delay or decline orders, how do you tell customers? Draft templates now for:

• Additional verification requests
• Order delays due to fraud review
• Declined order explanations
• Alternative payment method requests

Looking Ahead: Fraud Trends for 2026

As we head into next holiday season, watch for:

AI-powered fraud attacks: Fraudsters are using AI too, creating more sophisticated schemes that mimic legitimate buyer behavior.

Cryptocurrency fraud: As more brands accept crypto payments, expect increased fraud attempts exploiting irreversible transactions.

Social engineering attacks: Fraudsters impersonating customer service to steal account access will continue rising.

Cross-border fraud: International orders create more fraud opportunities as verification becomes complex across payment systems.

Staying ahead means continuously updating your fraud detection systems and training your team on emerging threats.

Your Next Steps

Fraud is evolving, but AI evolves faster.

By combining AI analytics with customer feedback, Shopify brands can detect risk earlier, reduce operational stress, and protect customer trust.

Heading into the holidays, AI-driven fraud prevention isn’t just smart — it’s essential for protecting your profits and your brand reputation.

Ready to see how Corso protects high-growth Shopify brands? Book a demo to discover how our AI-powered platform transforms post-purchase operations while keeping fraud at bay.