What is AVS and How Does it Help Prevent Fraud?

Sydney VaccaroEcommerceLeave a Comment

Address Verification Services or AVS is a commonly used fraud prevention tool that matches the billing address of the purchaser against the address that the card issuer has on file.

Fraud prevention should be a priority for all merchants. Putting into place preventive measures like using AVS can help merchants retain hard-earned revenue and prevent fees caused by customer disputes.

What is AVS?

Address Verification Services or AVS is a commonly used fraud prevention tool that matches the billing address of the purchaser against the address that the card issuer has on file. Its purpose is to ensure that the person making a purchase with the credit card is indeed the valid cardholder. AVS is widely used by ecommerce merchants to verify card-not-present transactions.

How Does AVS Work?

When a customer goes to check out online they are asked to provide their billing address. The billing address is sent by the merchant’s gateway to the card network. The card network passes this information to the issuing bank. The issuing bank compares the provided address to the address they have for the cardholder then sends an AVS code based on the results. This process takes just a few seconds to complete.

AVS only compared numbers when it checks addresses. This means that if a customer has a billing address of “1234 Street Name Ave, Some City ST 87654” the AVS will just compare “1234” and “87654” to check the address. The comparison of those numbers will result in an AVS code telling the merchant how successful the match was. Just like reason codes, the different card networks have specific codes for AVS responses. Some are unique to a network but some overlap.

Code

Visa

MasterCard

Discover

American Express

 

Y

Address & 5-digit or 9-digit ZIP match

Address & 5-digit ZIP match

Address only matches

Address & ZIP match

 

A

Address matches, ZIP does not

Address matches, ZIP does not

Address & 5-digit ZIP match

Address only matches

 

S

AVS not supported

AVS not supported

AVS not supported

AVS not supported

 

R

System unavailable, retry

System unavailable, retry

Not applicable

System unavailable, retry

 

U

Information not available

Information not available

System unavailable, retry

Information not available

 

Z

Either 5-digit or 9-digit ZIP match, the address does not

5-digit ZIP matches, address does not

5-digit ZIP matches, address does not

ZIP code only matches

 

N

Neither ZIP nor address match

Neither ZIP nor address match

Neither ZIP nor address match

Neither ZIP nor address match

 

W

Not applicable

For U.S., 9-digit ZIP matches, the address does not. For non-U.S., ZIP matches, address does not

Information not available

Not applicable

 

X

Not applicable

For U.S., all digits match. For non-U.S., ZIP and address match.

Address & 9-digit ZIP match

Not applicable

 

B

Address matches, ZIP not verified

Not applicable

Not applicable

Not applicable

 

T

Not applicable

Not applicable

9-digit ZIP matches, address does not

Not applicable

 

P

ZIP matches, address not verified

Not applicable

Not applicable

Not applicable

 

C

Address and ZIP not verified

Not applicable

Not applicable

Not applicable

 

D

Address & ZIP match (International only)

Not applicable

Not applicable

Not applicable

 

G

Address not verified for International transaction (International only)

Not applicable

Not applicable

Not applicable

 

I

Address not verified (International only)

Not applicable

Not applicable

Not applicable

 

M

Address & ZIP match (International only)

Not applicable

Not applicable

Not applicable

 

F

Address & ZIP match (UK only)

Not applicable

Not applicable

Not applicable

*Source: Chase Merchant Services

You Have the AVS Code, Now What?

If the code comes back as not a match or only partially verified it can cause some red flags. This is a sign that the person making the transaction may not be the true cardholder. But merchants should take the time to look at the code they received along with other verification steps they have in place before making a decision.

Although AVS codes are great indicators of fraud attempts, being too restrictive may restrict and negatively impact sales. You have to balance the preventing fraud, but not turning away valid customers. A customer maybe has not updated their bank on their new address or they have their bank a nine-digit zip code while only giving your company the five-digit one.

On the other hand, a fully matched AVS shouldn’t always be trusted. A fraudster may have access to the cardholder’s billing address along with the card number. While the AVS code can give you insights, it should be a part of a bigger fraud screening process.

AVS as Dispute Response Evidence

Although AVS codes are not always a foolproof way to filter out fraud, it is still important for merchants to use them. Providing a successful AVS code is an important piece of evidence for dispute response. Providing a matching AVS code helps merchants prove that a chargeback fraud or friendly fraud disputes are invalid.

Fraud prevention should be a priority for all merchants. Putting into place preventive measures like using AVS can help merchants retain hard-earned revenue and prevent fees cause by customer disputes.

What is AVS?

Address Verification Services or AVS is a commonly used fraud prevention tool that matches the billing address of the purchaser against the address that the card issuer has on file. Its purpose is to ensure that the person making a purchase with the credit card is indeed the valid cardholder. AVS is widely used by ecommerce merchants to verify card-not-present transactions.

How Does AVS Work?

When a customer goes to check out online they are asked to provide their billing address. The billing address is sent by the merchant’s gateway to the card network. The card network passes this information to the issuing bank. The issuing bank compares the provided address to the address they have for the cardholder then sends an AVS code based on the results. This process takes just a few seconds to complete.

AVS only compared numbers when it checks addresses. This means that if a customer has a billing address of “1234 Street Name Ave, Some City ST 87654” the AVS will just compare “1234” and “87654” to check the address. The comparison of those numbers will result in an AVS code telling the merchant how successful the match was. Just like reason codes, the different card networks have specific codes for AVS responses. Some are unique to a network but some overlap.

 

Code

Visa

MasterCard

Discover

American Express

 

Y

Address & 5-digit or 9-digit ZIP match

Address & 5-digit ZIP match

Address only matches

Address & ZIP match

 

A

Address matches, ZIP does not

Address matches, ZIP does not

Address & 5-digit ZIP match

Address only matches

 

S

AVS not supported

AVS not supported

AVS not supported

AVS not supported

 

R

System unavailable, retry

System unavailable, retry

Not applicable

System unavailable, retry

 

U

Information not available

Information not available

System unavailable, retry

Information not available

 

Z

Either 5-digit or 9-digit ZIP match, the address does not

5-digit ZIP matches, address does not

5-digit ZIP matches, address does not

ZIP code only matches

 

N

Neither ZIP nor address match

Neither ZIP nor address match

Neither ZIP nor address match

Neither ZIP nor address match

 

W

Not applicable

For U.S., 9-digit ZIP matches, the address does not. For non-U.S., ZIP matches, address does not

Information not available

Not applicable

 

X

Not applicable

For U.S., all digits match. For non-U.S., ZIP and address match.

Address & 9-digit ZIP match

Not applicable

 

B

Address matches, ZIP not verified

Not applicable

Not applicable

Not applicable

 

T

Not applicable

Not applicable

9-digit ZIP matches, address does not

Not applicable

 

P

ZIP matches, address not verified

Not applicable

Not applicable

Not applicable

 

C

Address and ZIP not verified

Not applicable

Not applicable

Not applicable

 

D

Address & ZIP match (International only)

Not applicable

Not applicable

Not applicable

 

G

Address not verified for International transaction (International only)

Not applicable

Not applicable

Not applicable

 

I

Address not verified (International only)

Not applicable

Not applicable

Not applicable

 

M

Address & ZIP match (International only)

Not applicable

Not applicable

Not applicable

 

F

Address & ZIP match (UK only)

Not applicable

Not applicable

Not applicable


*Source: Chase Merchant Services

You Have the AVS Code, Now What?

If the code comes back as not a match or only partially verified it can cause some red flags. This is a sign that the person making the transaction may not be the true cardholder. But merchants should take the time to look at the code they received along with other verification steps they have in place before making a decision.

Although AVS codes are great indicators of fraud attempts, being too restrictive may restrict and negatively impact sales. You have to balance the preventing fraud, but not turning away valid customers. A customer maybe has not updated their bank on their new address or they have their bank a nine-digit zip code while only giving your company the five-digit one.

On the other hand, a fully matched AVS shouldn’t always be trusted. A fraudster may have access to the cardholder’s billing address along with the card number. While the AVS code can give you insights, it should be a part of a bigger fraud screening process.

AVS as Dispute Response Evidence

Although AVS codes are not always a foolproof way to filter out fraud, it is still important for merchants to use them. Providing a successful AVS code is an important piece of evidence for dispute response. Providing a matching AVS code helps merchants prove that a chargeback fraud or friendly fraud disputes are invalid.