Black Friday or Black Fraud Day? How Small Businesses and Nonprofits Can Stay Safe This Holiday Season

What started as a single day of door-busting deals has now stretched into weeks of discounts, promotions, and non-stop online activity. While this extended shopping season might be great for sales, it’s also become a playground for scammers.

For small businesses and nonprofits, this time of year brings unique challenges. Limited resources and technical know-how often make it harder to fend off increasingly sophisticated cyber threats. Scammers are stepping up their game, using tactics like AI-powered phishing and social engineering to exploit vulnerabilities.

The stakes are high. Beyond potential financial losses, a successful cyberattack can shatter trust with customers, donors, and stakeholders—damage that takes far longer to repair than a hacked account. That’s why, as the holiday season heats up, small businesses and nonprofits must stay alert and take proactive steps to shield themselves from the growing risks of Black Friday’s dark side.

The Costly Impact of Holiday Scams

The holiday season, a time of joy and celebration, also brings an unwelcome guest: a surge in online scams. Small businesses and nonprofits, often operating with limited resources, bear the brunt of this onslaught. According to a recent study, cyber attacks during the holiday period result in an average financial loss of $50,000 for small organizations, a staggering blow that can cripple operations or even force closures.

The statistics paint a grim picture. Over 60% of small businesses and nonprofits have fallen victim to some form of cyber fraud in the past year, with a staggering 40% reporting multiple incidents. These attacks not only drain financial reserves but also erode consumer trust, making recovery an uphill battle.

For nonprofits, the consequences can be particularly devastating. With limited budgets and a reliance on donations, a successful scam can derail critical programs and initiatives. Imagine the heartbreak of a children's charity forced to cancel its annual holiday toy drive due to fraudulent activity draining their funds.

Watch Out for These Common Scams Targeting Small Organizations

Scammers are getting smarter, and they know exactly where to aim: small businesses and nonprofits. With limited resources and technical expertise, smaller organizations are often prime targets for these increasingly sophisticated tricks. Here are some of the most common scams to watch for this holiday season:

1. Fake Invoices

Scammers send fraudulent invoices or bills, hoping that in the hustle of daily operations, someone will approve the payment without noticing it’s a scam. These fake invoices are often designed to look convincing, complete with hijacked logos and official-sounding language to fool even the most diligent employees.

2. Phony Donation Campaigns

Nonprofits are especially vulnerable during the holiday season, as scammers exploit the goodwill of donors. They set up fake donation pages or mimic legitimate fundraising campaigns, tricking donors into giving money that never reaches the intended cause. These scams not only divert funds but can also damage the reputation of nonprofits working hard to make a difference.

3. Lean Teams, Big Risks

Small organizations often have lean teams and limited access to cybersecurity expertise. Without robust IT resources or regular employee training, these scams can slip through the cracks, making small businesses and nonprofits easy prey for cybercriminals.

The Perfect Storm: Holiday Rush and Online Activity

The holiday season is a whirlwind for small businesses and nonprofits. It’s a time full of opportunity—think booming sales and generous year-end donations—but it’s also a peak season for cybercrime. Increased online activity, combined with the pressure to meet deadlines and targets, creates the perfect storm for scammers to strike.

For Small Businesses: A Cybersecurity Crunch

The holiday rush often means pulling out all the stops to attract customers—flash sales, social media promotions, and extended online campaigns. But with this surge in digital activity comes increased risk. In the race to process orders, respond to inquiries, and meet customer expectations, cybersecurity can take a back seat. Scammers are quick to notice these vulnerabilities, using phishing emails or fake order requests to trick overwhelmed employees into exposing sensitive data or approving fraudulent transactions.

For Nonprofits: The Danger of Fake Donations

Nonprofits rely heavily on end-of-year giving, when donors are eager to make tax-deductible contributions. Unfortunately, scammers know this too. They create fake donation links, impersonate reputable organizations, and even hijack fundraising campaigns to divert funds. For nonprofits, the stakes couldn’t be higher—fraud during this critical season can derail vital programs and shake the trust of supporters.

Why Holiday Scams Work

Scammers thrive on the urgency and chaos of the season. Whether it’s a fear of missing out on a deal or the rush to make a year-end contribution, people are more likely to act quickly—sometimes too quickly. Scammers exploit this mindset with targeted attacks, using social engineering and sophisticated phishing techniques to increase their chances of success.

The Disproportionate Toll of Cyberattacks on Small Organizations

Why Small Organizations Are Easy Targets

The numbers tell a stark story: small businesses are 350% more likely to be targeted by cybercriminals than larger enterprises. Why? Because smaller organizations often lack the resources to implement sophisticated security measures or hire dedicated IT teams. Hackers see this as an open invitation, exploiting vulnerabilities that bigger organizations are better equipped to defend against.

The Cost of a Breach

A successful cyberattack can hit small organizations where it hurts most—financially and reputationally:

• Financial Impact: Many small businesses and nonprofits operate on razor-thin margins. A single breach can drain their resources, crippling day-to-day operations or even forcing closures.

• Reputational Damage: Customers and donors place their trust in these organizations. A breach can shatter that trust, leading to lost business or reduced charitable contributions—losses that can take years to recover from.

The Unique Challenges for Nonprofits

Nonprofits face an even steeper climb. With limited funding and a mission-driven focus, they depend on public trust to succeed. Cybercriminals often exploit this trust, targeting nonprofits with phishing scams or fraudulent donation campaigns. For organizations already operating on tight budgets, a breach can derail vital programs and jeopardize their ability to serve their communities.

The Long Road to Recovery

Recovering from a cyberattack is rarely straightforward, especially for small organizations. Without dedicated IT resources, identifying and fixing the breach can be time-consuming and costly. Meanwhile, the prolonged downtime and uncertainty further strain resources and morale.

Turning the Tide

While the challenges are significant, small organizations aren’t powerless. Simple, cost-effective measures can make a big difference:

• Strengthen Your Defenses: Tools like multi-factor authentication and anti-malware software can provide critical layers of protection.

• Educate Your Team: Training staff and volunteers to recognize phishing scams and other threats is a low-cost, high-impact strategy.

• Partner with Experts: Affordable solutions like Lockwell’s cybersecurity platform offer comprehensive protection tailored to the needs of small businesses and nonprofits.

Cybersecurity doesn’t have to be out of reach. With the right tools and mindset, small organizations can protect themselves, their customers, and their missions from the growing threat of cyberattacks.

Practical Steps to Safeguard Your Organization This Holiday Season

With cyber threats becoming more sophisticated, small businesses and nonprofits need to take proactive measures to protect their operations and sensitive data. The good news? A few simple steps can make a big difference in reducing your risk of falling victim to holiday scams and cyberattacks.

1. Turn on Multi-Factor Authentication (MFA)

MFA is one of the easiest and most effective ways to secure your accounts. It requires a second form of verification—like a one-time code or fingerprint scan—in addition to a password. Make sure MFA is enabled for all your business accounts, and encourage your team to use strong, unique passwords. This simple step can prevent unauthorized access and give you peace of mind.

2. Educate Your Team on Phishing Scams

Phishing scams are a favorite tool for scammers, often using fake emails or links to trick people into revealing sensitive information. Regularly train your employees or volunteers to recognize these scams. Look for telltale signs like suspicious sender addresses, unexpected requests, or urgent language. Awareness is a powerful defense.

3. Leverage Security Tools

A few key tools can provide an extra layer of protection:

• Password Managers: Help your team generate and store strong, unique passwords securely. No more reusing the same password across accounts!

• Anti-Malware Software: Protect your systems from viruses, trojans, and other malicious software.

• Virtual Private Networks (VPNs): Encrypt your internet traffic and protect sensitive data, especially for remote teams or public Wi-Fi use.

Solutions like Lockwell’s platform combine these tools into an easy-to-use package designed specifically for small organizations.

4. Set Up Alerts for Suspicious Activity

Many banks and payment processors offer alert services to notify you of unusual transactions or login attempts. Activate these alerts so you can take swift action if something doesn’t look right. Early detection can limit potential damage.

5. Use Secure Payment Methods

Encourage customers or donors to use reputable payment platforms for transactions. Avoid sharing sensitive financial information over unsecured channels. For high-value transactions or donations, consider adding extra verification steps to confirm their legitimacy.

Safeguard Your Future

As the holiday season approaches, the risks of falling victim to online fraud intensify. Small businesses and nonprofits, often operating with limited resources, can find themselves particularly vulnerable to the sophisticated tactics employed by cybercriminals. 

In the face of increased online activity and the urgency of holiday sales or fundraising campaigns, scammers exploit every opportunity to deceive and defraud. Their methods evolve rapidly, leveraging advanced technologies like AI to create highly convincing phishing attempts, fake invoices, and deceptive donation links. The consequences of falling victim to these scams can be devastating, resulting in not only financial losses but also irreparable damage to your organization's reputation.

The holiday season doesn’t have to be a time of vulnerability. By strengthening your defenses, educating your team and partnering with experts , you can significantly enhance your organization’s cybersecurity and focus on what matters most—serving your customers and advancing your mission. Remember, cybersecurity isn’t about perfection; it’s about progress. Every step you take strengthens your defense against cyber threats.