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FAQ: What is the Address Verification Service (AVS)? - YouTube
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presented by chargepackgurus.com
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address verification service prevents
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chargebacks the only effective way to
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stop
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true fraud chargebacks is to prevent
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fraud in the first place
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and one of the most often recommended
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anti-fraud tools
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is address verification service or avs
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it works by matching the address
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provided by the customer
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against the cardholder's address on file
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with the same
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issuer where a discrepancy would
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indicate
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possible fraud this can work well as a
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front-line defense against stolen cards
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but it won't catch every fraudster and
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using it too
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restrictively could block out some
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legitimate transactions
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how should merchants use avs in their
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strategy
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to fight fraud and chargebacks merchants
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and customers are quite accustomed to
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various degrees of avs
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matching we're used to entering our full
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billing address at the online store
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but the gas pump just gets our zip code
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who decides how much address needs to be
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verified
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the merchant although the banks may try
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to influence things in a safer direction
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with higher processing fees for
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unverified transactions
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if you're dealing with the high rate of
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chargebacks resulting from true
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fraud it's worth taking a look at how
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avs
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is set up to see if it could be doing a
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better job of filtering out the
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fraudsters
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how does avs work mastercard
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originated avs but it is offered by
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all the major credit card networks it is
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activated when the transaction
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is being authorized the cardholder
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provides an address which is entered
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into the merchant's payment gateway
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and avs compares the numeric parts of
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the address
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the street number and the zip or postal
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code
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to the address on file and generates a
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code
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this code indicates whether there is a
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complete or partial match
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or if matching is impossible due to lack
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of support from the issuing bank
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or some other error the merchant
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can then use this code to decide whether
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or not to proceed with the transaction
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usually the decision is made
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automatically according to rules the
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merchants set in their payment gateway
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merchants with a lot of international
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customers for example
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might want to allow the response code
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that indicates
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no vs support from the issuer since
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avs isn't widely available outside of
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the united states
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canada and the united kingdom
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this process occurs during the standard
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authorization communications
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and does not delay or disrupt successful
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transactions at all
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what are avs's strengths and weaknesses
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what avs is very good at is stopping
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what you might call
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traditional credit card fraud a
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fraudster
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who has stolen someone else's physical
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payment card
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or one who has made a copy of the
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visible card information
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the card holder's name card number and
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expiration date
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in most cases the fraudster will have no
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idea what the cardholder's billing
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address is
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they might be able to make an educated
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guess as to the zip code
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but there's not much chance they'll get
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the street number right
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avs will come back with a mismatch code
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the merchant will decline the
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transaction and fraud is averted
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unfortunately there are plenty of
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scenarios in which the fraudster will
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have access to the card's billing
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address
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data breaches often include full
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customer payment credentials
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people steal cards from people they know
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and determine fraudsters
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can search public records for their
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victims addresses
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it's not hard to imagine ways to get
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around it
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still it prevents fraudsters with an
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obstacle to get past
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and without it a lot more fraud would
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surely occur
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does avs ever block real customers
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most customers will never have an issue
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with avs
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if they enter their address incorrectly
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and the transaction is declined
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the merchant can simply allow them to
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correct it
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and try again however there
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are some circumstances where depending
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on how restrictive you've made the
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settings in your payment gateway some
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legitimate customers
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might not be able to get past avs
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they don't know their billing address
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maybe they signed up for the card a long
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time ago
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under an old address and haven't used it
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until now
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they'll have to sort this out with their
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bank before they can proceed
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their bank doesn't support avs
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this might be the case for many of your
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international customers
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or customers using prepaid debit cards
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you can adjust your avs settings to
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allow the response code that is causing
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these customers to be declined
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avs can't recognize the numbers provided
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because of an apartment number or
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non-standard address in the
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information on file in rare cases
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the customer may be entering a correct
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address
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but it doesn't match because the issuer
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has entered it differently in their
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database
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again the customer may need to talk to
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their bank
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to get this fixed for every merchant the
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decision
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as to how permissive or restrictive to
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set their avs matching requirements
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depends largely on their customer base
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but also
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how much risk they're willing to take on
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accepting mismatched or avs unsupported
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transactions
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can not only cause you to incur higher
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interchange fees
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it also greatly increases your exposure
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to fraud and chargebacks
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on the other hand few merchants require
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the highest level of matching
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the full nine-digit zip code
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conclusion avs is only meant to be one
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of many tools in your arsenal
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against fraud you can't rely on it to
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stop sophisticated forms of fraud
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but in the right settings it can
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effectively screen out
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the low effort fraudsters the right avs
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settings will vary from merchant to
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merchant
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for most e-commerce merchants who aren't
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part of high-risk industries
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requiring a close match will pose no
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problem for the vast majority of their
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customers
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when you're fighting a friendly fraud
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chargeback
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proof of an abs match can serve as
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compelling evidence in your favor
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especially if the purchase was shipped
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to that same address
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in terms of chargeback management deep
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data analysis can
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show you the avs response codes that are
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causing you
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the most trouble as well as ones you
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might be blocking
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unnecessarily an experienced chargeback
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management firm
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can help you integrate your avs policies
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and processes
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into an overall strategy of stopping
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fraud
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and maximizing revenue to learn more
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visit chargeback chargebackgurus.com
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