What is Address Verification Service (AVS) and does it work?


What is AVS?

AVS verifies if the billing address is the same as the billing address the cardholder’s credit card company (visa, mastercard, etc).  More specifically, the street number and the zip code is verified individually and the results are reported back.  Use AVS (address verification service) through your gateway such as authorize.net.  Firstly, require the customer to provide two addresses – the billing address their credit card company has on file and their shipping address.

Does AVS work?

Most thiefs are dumb.  They’ll acquire stolen credit card(s) and start using them with little regard to the billing address b/c they don’t care about the billing address; they only care about the shipping address of the order.  I’d say 85% of transactions the billing address the customer provides matches the billing address on the credit card completely.  Most mismatches occur with college aged students who are off to college or anybody that has moved recently and the billing address at their credit card company hasn’t changed yet.  AVS is not a foolproof.  There are a few ways the thief could have your billing address such as by acquiring data from another online purchase you made, looking you up in the phone book, or they’re somebody you know personally that is aware of your address once they’re obtained your credit card details.

What can I do?

As a merchant, you have the ability to automatically decline transactions that fail one or both of these tests during the authorization process.  This method is not fool proof by any means, but will help you deter some fraudulent transactions.

Is AVS worth it?

AVS will cost the merchant usually between 5-10 cents per authorization.  To me, I’d say yes, it’s worth it.  AVS a tool I check on a daily basis when scanning for fraudulent transactions.  Below is an excerpt from the email I receive from my online merchant outlining details of the transactions.  The AVS results are included.

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