What is AVS?
AVS stands for Address Verification System, and is exactly what it sounds like. In order to reduce the risk of fraudulent transactions and/or chargeback's, a credit card billing address is requested with any charge and verified before authorization is given for the transaction.
What is the Address Verification System (AVS)?
The Address Verification System (AVS) is an advanced level of credit card security to help thwart identity theft. When a user makes an online purchase with a credit card their billing address is required. The house number portion and postal code of the billing address they enter is compared to the billing address on file for the card.
If the address does not match then the transaction is declined. Thus, address verification failed and the chance that this is a fraudulent transaction is too high to allow the transaction to go through. When AVS first started being used, a merchant could still process a card with an AVS mismatch for a higher processing fee.
Some services still allow the merchant to do this but it does cost more money to process the un-verified card and it is not a good idea especially if you are selling hard goods. If you ship goods that are bought with a stolen credit card then you have not only lost the merchandise but you are also responsible for the chargeback to the card. In other words, you just lost double!
Legitimate Declines are Common
If the address entered by the user does not match the address on file with the card then the transaction will be declined. If something is misspelled or the customer has moved then the address will not verify. In the event a card fails the only choice you have is to contact the customer to verify their information and work with them to see where the problem is. They may have a bad address on file with the financial institution.
AVS Still not Enough - Watch Out for Foreign Orders
AVS is only going to verify the information submitted with the card. If the hacker has all of the pertinent information then the card is going to pass. This usually is common with orders generating from foreign countries. Foreign orders should always get a second look even if the information validates. There are a few things you can do here to help verify foreign orders.
- Call or email foreign customers immediately after the order for verification. Always request the user’s phone number and use a service like anywho.com to verify the number is for that person. Require foreign customers to submit a fax immediately after the order to verify the order. Then verify that the fax number is from that region. Look at the domain for the email address and verify it is an ISP in that user’s area. Be very cautious of orders from free mail accounts such as yahoo. Be suspicious of high dollar orders or multiple orders from the same people.
- Require foreign customers to contact you before you allow them to order. Perhaps you can set-up a verification system where people outside the US need an access code to order.