Address Verification Service (AVS)
Address Verification Service (AVS) is an identity verification tool used by ecommerce merchants to reduce the risk of unauthorized transactions and the resulting chargebacks. AVS compares the billing address provided by the shopper during checkout to the cardholder’s billing address on file with the issuer.
How Does AVS Work?
Address Verification Service analyzes the numeric portion of the billing address — the building number and the postal code. The analysis will yield one of several results, which is communicated to the merchant with a code. Codes communicate results such as:
- Neither the street address nor postal code provided during checkout match what is on file with the issuer.
- The street address provided during checkout matches what is on file with the issuer, but the postal code doesn’t match.
- The postal code provided during checkout matches what’s on file with the issuer, but the street address doesn’t match.
- Both postal code and street address provided during checkout match what the issuer has on file.
A mismatch result could indicate potential fraud. It is assumed the cardholder would know the correct billing address for the card — whereas a fraudster likely would not.
The merchant will determine an appropriate level of risk exposure for the business and establish stipulations regarding AVS outcomes. Then, transactions will be approved or declined based on the merchant’s preferences.
Things to Consider
- Address Verification Service has limited functionality with cards issued by international banks.
- Pre-paid cards likely don’t have billing information on file.
- False positive results are possible if the cardholder moves and fails to update account information with the bank.
- AVS is supported by all card brands. Visa uses results to help assign liability for allocation disputes.
- If the merchant doesn’t have a positive AVS match, it will be very difficult to fight and win fraud-related chargebacks.
