The Dark Side Of Detty December And Igbo Christmas: How Refund Fraud Is Hurting Local Businesses

By Chidubem Ukamaka Onyejemuo-

Every December, Nigeria transforms into a vibrant hub of celebration. Flights are packed with returning diaspora members, streets pulse with Afrobeat rhythms and festive lights, and cities like Lagos, Enugu, and Owerri come alive with family reunions and joyous gatherings.

This is “Detty December,” a cultural phenomenon where Nigerians abroad flock home for the holidays, blending high-energy parties with the deeply rooted traditions of Igbo Christmas.

Far beyond mere festivities, it’s an economic lifeline. Hospitality sectors – including hotels, restaurants, clubs, and event organisers – often generate 30-50% of their annual revenue during these weeks, sustaining operations through leaner months.

Yet, in recent years, a shadowy undercurrent has tainted this season: a surge in refund fraud through chargebacks, where legitimate transactions are disputed post-event, leaving local businesses reeling.

The fallout begins after the celebrations fade. As diaspora visitors and foreign tourists board return flights, many local merchants receive chargeback alerts from international banks.

Genuine expenditures – such as lavish dinners at upscale Lagos eateries, hefty club bills in Owerri, extended hotel stays in Enugu, or even luxury designer purchases – are retroactively labelled as “unauthorised” or fraudulent.

These disputes, often initiated weeks later from jurisdictions like the UK, US, or Canada, exploit systemic biases in global payment networks, resulting in a “December refund wave” that disproportionately penalises Nigerian enterprises.

The mechanics are deceptively simple yet profoundly damaging. A cardholder contacts their overseas bank, alleging overcharges, non-delivery of services, or outright unauthorised use.

The issuing bank then lodges a chargeback via networks like Visa or Mastercard, which typically resolve in favour of the cardholder due to jurisdictional preferences and Nigeria’s longstanding “high-risk” classification in global fraud indices.

Merchants face immediate fund reversals – often weeks or months after the transaction – plus dispute fees ranging from ₦5,000 to ₦20,000 per case, with little recourse since local acquirers lack direct channels to foreign issuers.

In essence, the customer enjoys the experience for free, while the business shoulders the loss, exacerbating cash flow strains in an economy already grappling with inflation and currency volatility.

This isn’t mere speculation; data from 2024 underscores the scale of the problem. Nigerian financial institutions reported ₦52.26 billion in fraud losses for 2024 alone, with chargebacks and electronic fraud comprising a growing share. Attempted fraud cases surged 338%, resulting in a loss rate of 0.0040%.

During Detty December 2024 specifically, businesses in the hospitality and retail sectors saw chargeback spikes of up to 4.20% in some cases, far exceeding typical thresholds and leading to billions in clawbacks across fintech platforms.

Identity fraud in Africa, led by Nigeria, rose 167% in 2024, often intertwined with chargeback schemes involving synthetic identities or deepfakes. Projections for 2025 warn of escalating risks, with global chargeback fraud potentially reaching $100 billion by 2026, and emerging markets like Nigeria bearing a disproportionate burden due to cross-border vulnerabilities.

Anecdotal reports from Enugu hoteliers, Owerri bar owners, and Lagos restaurateurs paint a vivid picture: a flood of international card swipes in December, followed by January disputes from abroad, with individual businesses losing tens of thousands of dollars in a single wave.

To merchants, this feels like a double robbery – first through the transaction, then via a system meant to foster trust.

Expanding the perspective reveals a multifaceted issue, not just victimising businesses but rooted in mutual mistrust. From the diaspora viewpoint, some disputes stem from legitimate grievances: inflated prices during Detty December, where locals engage in “gouging” (e.g., short-term rentals jumping to ₦150,000 per day or club entries tripling), leading to post-holiday regret or claims of overcharging.

Overspending under cultural pressures to “ball out” or unfamiliarity with naira conversions can fuel genuine confusion. However, many cases appear opportunistic or deliberate, with “IJGBs” (I Just Got Back) exploiting foreign banks’ leniency toward Nigeria-related claims, viewing it as low-risk fraud amid the country’s cybercrime reputation.

This cycle of exploitation – local price hikes meeting diaspora chargebacks – creates a “scammy ecosystem” that erodes community bonds, with similar patterns reported in neighbouring Ghana. Broader stakeholders, including fintech experts, call for empathy: not all diaspora are fraudsters, but the trend risks tarnishing homecoming narratives and deterring future visits.

Often brushed off as a “cost of doing business,” refund fraud’s ripples extend deeply. It erodes faith in digital payments, prompting many entrepreneurs to reject international cards and revert to cash-only models, countering Nigeria’s cashless economy drive.

High-risk labels inflate merchant fees by 1-3%, straining margins in sectors like hospitality. At its heart, this exposes a global payment design flaw: chargeback processes, optimised for uniform domestic markets, falter in cross-border settings where merchants in emerging economies lack arbitration equity.

Ironically, advanced fraud prevention tech exists – AI-driven monitoring, digital receipts, and GPS-verified logs could validate transactions in real-time. Yet, for Nigerian small and medium-sized enterprises (SMEs), accessibility is a barrier.

Implementing AI systems demands upfront costs of ₦5-20 million for basic setups, including software subscriptions (e.g., ₦500,000-₦2 million annually), hardware upgrades, data integration, and staff training – exorbitant amid Nigeria’s economic challenges like high inflation (over 30% in 2024) and unreliable power/internet infrastructure.

Many SMEs, operating on thin margins, view these as prohibitive, opting instead for manual processes despite risks. While AI could yield long-term savings (e.g., reducing fraud losses by 50-70% as seen in larger banks), the initial investment gap widens inequalities, leaving smaller players vulnerable during peaks like Christmas.

Regulators play a pivotal role in driving reforms. The Central Bank of Nigeria (CBN) has been proactive, launching the Payments System Vision 2025 (PSV 2025) in 2022 to modernise infrastructure, enhance transparency, and combat fraud through initiatives like GPS tracking for PoS devices and mandatory routing via licensed processors.

Building on this, the CBN extended this with PSV 2028, focusing on cross-border payments, consumer protection, and AI integration to curb chargebacks. Measures include guidelines for failed transaction refunds, fraud audits (with 73% of African banks projected to fail 2025 audits without AI), and collaborations with entities like NIBSS to boost reliability – evidenced by electronic payments hitting ₦384 trillion in July.

These reforms aim to level the playing field, but advocates urge faster global advocacy to reform chargeback arbitration.

Nigeria should establish a dedicated Chargeback Arbitration Bureau under the CBN’s supervision – a centralised, tech-enabled platform that aggregates evidence from acquirers, merchants, and payment processors to contest international disputes on behalf of Nigerian businesses.

Such a body could integrate with Visa’s and Mastercard’s dispute APIs, offering automated submission of merchant evidence and transparent tracking of outcomes.

There’s also a role for fintech innovators. Companies like Paystack, Flutterwave, and Moniepoint could leverage their data advantage to build “merchant credibility profiles” – fraud intelligence systems that distinguish high-trust merchants from risky ones.

These profiles could be shared with card schemes and foreign issuers, reducing the probability of automatic reversals. By combining local data with global APIs, Nigerian fintechs can help rewrite the narrative of risk that unfairly penalises the market.

Additionally, Nigeria’s payment regulators could lobby Visa and Mastercard for regional arbitration representation – a seat at the table in dispute resolution panels that currently sit in Europe and North America.

This would ensure that African acquirers and merchants have a voice in cases involving cross-border fraud or refund abuse. The CBN’s Payments Vision 2025 already outlines a goal for “enhanced dispute resolution infrastructure.”
It’s time to accelerate that vision, not just for domestic payments, but for international transactions that underpin Nigeria’s tourism and hospitality sectors.

If refund fraud continues unchecked, it won’t just affect nightlife operators or hoteliers; it will erode trust in the entire digital payment ecosystem. It will discourage card acceptance, weaken tourism’s economic potential, and keep Nigeria on the periphery of financial fairness.

Regulators must recognise that every chargeback dispute has two sides, and every fair reform strengthens the foundation of cross-border commerce.

Ultimately, Detty December and Igbo Christmas should remain symbols of joy, reunion, and economic revival – not triggers for financial losses and chargeback disputes. Fairness in payments is not a luxury; it’s infrastructure. And until regulators and global networks work together to fix these imbalances, the merchants who make our holidays memorable will continue to pay the highest price for other people’s convenience.