Retail security in the holiday season
The holiday shopping season is the retail sector’s busiest time of year. And along with festive cheer and bustling sales, this season also brings an array of sophisticated cyber threats poised to exploit the retail sector.
For retail organizations and their financial partners, this period is not just about capitalizing on increased consumer spending, but also about ensuring robust security measures are in place. From safeguarding sensitive customer data against cyber attacks to managing the heightened risk of in-store incidents, the need for a comprehensive approach to retail security has never been more critical.
For a deeper dive into the retail security landscape, join our upcoming webinar on December 5 to delve into practical strategies for strengthening your retail security posture.
The 2023 retail security cyber landscape
More than three years after COVID-19 began, the pandemic’s legacy continues to shape shopping habits. Adobe Analytics projects a staggering $221.8 billion in U.S. online holiday sales this holiday shopping season. And this digital rush, while lucrative, opens floodgates for cybercriminals.
The rise of sophisticated phishing
Building upon the tactics of yesteryears, threat actors are now deploying AI-driven phishing schemes. These highly personalized attacks mimic legitimate holiday deals and discounts, luring consumers into divulging sensitive data.
AI has made it easier for cybercriminals to perpetrate attacks. Threat actors can use technology to craft better-written emails that are free of the grammar or spelling issues that often give scam emails away. Plus, AI can supply data about the target company using publicly-available information to make message seem more believable.
It can even help cybercriminals create websites or documents that seem legitimate but are actually payloaded to distribute malware onto a victim’s device. And as the holiday season ramps up and organizations and consumers alike are facing a greater volume of correspondences related to holiday shopping, threat actors rely on the possibility that one of their phishing attempts will slip through the cracks to allow access to valuable data.
Ransomware: The persistent threat
The retail industry remains a prime target for ransomware attacks, and organizations within this sector are often seen as lucrative targets due to the high transaction volumes and the critical nature of maintaining operational uptime.
Cybercriminals are increasingly focusing on e-commerce platforms, exploiting vulnerabilities to insert ransomware. The proliferation of ransomware-as-a-serivce (RaaS) models allows even less technically skilled attackers to launch ransomware campaigns. These services provide tools and support in exchange for a share of the ransom, democratizing the ability to execute these attacks.
Key cyber threats to watch
- Refund Fraud: A significant portion of online sales leads to returned merchandise, with a notable fraction being fraudulent. The increasing trend of ‘Refund-as-a-Service,’ where threat actors facilitate fraudulent returns for a fee, presents a growing challenge. These actors offer various fraudulent refund packages, exploiting retailers’ return policies and customer service processes.
- Credit Card and Payment Card Fraud: The retail sector faces the persistent threat of card-not-present fraud. Cybercriminals acquire stolen card data through leaks or by targeting financial records from poorly secured websites. They use this data to fund illegitimate purchases or sell it to other fraudsters.
- CMS Access Exploitation: With the rise in online shopping, access to e-commerce content management systems (CMS) becomes a lucrative target. Threat actors exploit vulnerabilities in CMS and website plugins to steal customer information, including payment details. This is especially critical for platforms like Magento and WooCommerce, which have been commonly exploited for financial data skimming.
- Gift Card Fraud: The use of stolen credit cards to purchase high-value gift cards is a prevalent form of fraud. Cybercriminals often resell these fraudulently obtained gift cards at discounted prices on deep and dark web forums, making it a two-pronged threat that impacts both revenue and brand reputation.
- Social Engineering and Smishing: The holiday season sees a surge in phishing and smishing (SMS phishing) attacks. Cybercriminals masquerade as legitimate retail entities to trick consumers into revealing sensitive information. The rise of such attacks underscores the need for heightened vigilance and consumer awareness.
- Merchandise Shortages and Delays: Ongoing supply chain challenges may lead to merchandise shortages and delays, heightening customer frustration. This can result in increased confrontations and potentially violent altercations, necessitating robust physical security measures in retail environments.
Physical retail security challenges in the 2023 holiday shopping season
While cyber threats dominate the landscape, physical security remains a crucial concern.
- Crowd Control During Peak Shopping Times: The holiday season, especially Black Friday and other major sale events, witnesses huge foot traffic. Managing large crowds to prevent accidents and maintain order is essential.
- Merchandise Shortages and Customer Frustration: Ongoing supply chain issues may result in merchandise shortages or delays. Such situations can escalate into conflicts between customers, or between customers and staff, especially during high-demand periods like Black Friday and Cyber Monday.
- Potential for Theft and Shoplifting: Increased foot traffic can also lead to a rise in shoplifting incidents. Retailers must be vigilant and may need to employ additional security measures or personnel during peak shopping times.
- Terrorism and Targeted Attacks: Though less common, there’s always a potential risk of targeted attacks or terrorism during large public gatherings, including during holiday shopping events.
Mitigation strategies: Fortifying defenses
Taking some key steps can make it easier for retailers to better protect consumers, merchandise, and their organizations from the cyber and physical threat landscapes.
- Adopt robust cyber threat intelligence solutions to safeguard against various online threats.
- Strategically prepare for increased in-store traffic and potential physical altercations, especially during high-traffic periods.
- Implement advanced systems for detecting fraud, and monitor online marketplaces and forums for threat actor activity.
- Consistently train staff and educate customers on security best practices.
- Develop and maintain comprehensive plans for responding to a range of threats, including cyber attacks and physical security incidents.
- Foster collaborative efforts between retailers and financial partners to strengthen overall security.
- Engage with specialized security firms like Flashpoint for tailored intelligence and threat response strategies.
Enhance your retail security with Flashpoint
Flashpoint risk intelligence enables organizations to proactively identify and mitigate cyber and physical risk that could imperil people, places, and assets. To unlock the power of great threat intelligence, get started with a free Flashpoint trial.
Join us on December 5 for a live webinar that will provide insights into the upcoming retail theft and fraud trends for 2023-24 and reveal functional tactics to secure brick-and-mortar and online locations during the holiday rush.