Address Verification Service

Ecommerce businesses ask for a billing address during checkout. In the merchant processing world, this is called address verification service (AVS). AVS is a method used to determine whether or not the purchase is legitimate.

It makes financial sense for a merchant to use AVS. Without address verification, the merchant is surcharged on credit card transaction fees. The banks consider lack of AVS an additional risk.

If there is no address verification match, the merchant can decide what to do. For a large ticket order, the merchant may find it is worthwhile to make a call or contact the consumer and ask for alternative proof of identity.

For smaller ticket purchases, the merchant may decide not to get additional information and simply allow the transaction to be completed. The merchant may decide that the cost of verifying an order by phone does not justify the amount of the purchase. Address Verification has limitations. It works only with US addresses, not internationally. Even in the US the system is not always reliable. For example, there may not be an AVS match because the consumer has moved and did not report a change of address to the issuing bank. Or the consumer may simply make a mistake in entering a street number or zip code.

Address Verification should be used in conjunction with other fraud protection protocols. The goal for the ecommerce is to get as many orders as possible with the least risk.