Guide to AVS: Credit Card Address Verification System Explained
AVS, or the Address Verification System, is a common way for merchants to ensure that the billing address entered at checkout matches the address on file at the customer's credit card company. Understanding it is an important first step in securing your online store against fraud
Rather than simply telling merchants the expected billing address, the credit card processor will instead attempt to match the billing address provided with the billing address they have on file for the customer. This protects you (and them!) from liability, but it is also a pretty big pain in the behind.
There are various kinds of matches that might be returned from the payment processor:
|D, F, X||Perfect Match: address + extended postal code|
|Y, M||Perfect Match: address match + postal code|
|Z, P||Partial Match: Postal code but not street address|
|A, B||Partial Match: Street address but not postal code|
|W||Partial Match: Extended postal code but not street address|
|G, I, E||AVS Unavailable (bank does not participate in AVS)|
|R||Card issuing bank's AVS system temporarily unavailable|
|S, U||Card issuing bank does not support AVS (see BIN for bank information)|
|C, N||No Match|
AVS is an excellent first-pass filter against fraudulent orders. Many merchant accounts will let you configure your settings so that certain response codes are rejected automatically - and you can choose based on your own appetite for risk.
You can't rely on it 100%. It's a mostly US system, so if you require some form of AVS match you'll automatically exclude a lot of non-US customers. Legitimate customers often get flagged by the AVS system too:
- Customers may mistype or abbreviate some part of their billing addresses, triggering a mismatch in the system when a human might understand the difference
- Customers move without updating their addresses
- Card companies mis-update addresses through data entry errors or delays
But - as with most things fraud-related - don't let perfect be the enemy of good. Get to know AVS and start to decide on your own personal tolerance for risk.
For full-range fraud prevention for your e-commerce store, you can sign up for Merchant Protector below. Online stores bear all the financial burden of order fraud, so we think they should have the best possible fraud prevention tools.