The busiest time of the year for retailers is nearly here.

You can feel the anticipation building—just ask Australia Post, which is recruiting 3,000 seasonal workers to handle the upcoming holiday rush. But amid the buzz of peak season prep, there’s an elephant in the room: consumer confidence remains low. With cost-of-living pressures squeezing wallets, many Australians continue to be more cautious about how they spend.

According to a recent KPMG Australia report, retail volumes and consumer sentiment continue to dip. The company’s Retail Health Index dropped further between March and June, sliding from -1.49 to -1.73. What this tells us is that while stores may be busier come December, there’s a risk that retailers might not get the sales boost they’re hoping for.

To get into the black, retailers will need to focus on delivering exceptional experiences that encourage spending. Ensuring a smooth, trustworthy shopping journey can make all the difference for customers who are cautious about parting with their hard-earned cash.

The growing threat of payment fraud

When it comes to spending and receiving money, one of the major concerns shared by consumers and retailers is the growing issue of payment fraud.

According to Adyen’s latest Retail Index, more than one in three Australians feel less safe shopping now than they did ten years ago. It’s not just paranoia; the numbers back this up. AusPayNet’s latest report revealed a 22% increase in the payment card fraud rate, now sitting at 70.2 cents per $1,000—a figure that hasn’t been as high since 2018.

Payment fraud isn’t just an issue for an individual business or consumer; it’s a problem for the entire retail landscape. Businesses face chargebacks, reputational damage, and lost sales, while customers have to deal with the headache of disputed transactions and compromised personal information.

When consumers feel confident that their transactions are safe, and businesses have confidence in their fraud approach, the result is more sales. And in the current landscape, every sale is crucial.

Types of payment fraud and their impact

One of the most common forms is CNP (card not present) fraud, where criminals use stolen card details to make online purchases. This type of fraud has been increasing, especially as more consumers shop online, a trend in Australia accelerated by the pandemic.

Another growing threat is account takeover (ATO) fraud, where fraudsters gain access to a customer’s online account and make purchases or steal information.

These types of fraud can be financially crippling for businesses. Chargebacks can quickly add up, and the effort involved in managing fraud disputes can divert resources away from other important areas like customer service.

How to combat payment fraud

So, what can retailers do to protect their customers and their bottom lines?

The first step is awareness. Understanding the risks and staying informed about the latest trends in fraud prevention is essential. But awareness alone won’t solve the problem. Retailers need a robust strategy that includes implementing advanced payment security measures and investing in fraud prevention technology.

For example, Adyen offers solutions that help businesses stay ahead of fraudsters by using machine learning to identify suspicious patterns in real time. These tools can detect unusual behaviour and block fraudulent transactions before they go through, giving retailers peace of mind and shoppers the confidence they need to complete their purchases.

Take the example of True Alliance, custodians of world-class brands including Lacoste and The North Face in Australia.

By enhancing their payment fraud strategy, they were able to save $1.4 million annually. That’s not just a win for their bottom line; it’s a testament to how effective fraud prevention can lead to better business performance and a smoother customer experience.

When shoppers know they can trust a brand to keep their information safe, they’re more likely to return, spend more, and recommend it to others.

Securing the future of retail

As we head into the busiest time of year, there’s a lot on the line for retailers. The key to making the most of the peak season isn’t just about attracting more customers; it’s about making sure they feel shape when they shop. With consumer confidence already on shaky ground, the last thing anyone wants is to worry about whether their payment details are secure.

Retailers who prioritise fraud prevention will not only protect their customers but also improve their own business performance. By investing in the right technology, they can offer a secure, seamless shopping experience that builds trust and loyalty—something that’s needed now more than ever.

Hayley Fisher is country manager for Australia & New Zealand at Adyen.