Define Address Verification Service (AVS)?
The Address Verification Service (AVS) is a risk management tool for merchants accepting transactions in which neither the card nor the cardholder are present (e.g., mail, telephone order, internet transactions), or in which the card is present but its magnetic stripe cannot be read by a terminal at the point of sale. AVS helps reduce the risk of accepting fraudulent transactions by facilitating the verification of the cardholder’s billing address with the card issuer. This address information helps you determine whether to accept a particular transaction or to take further follow-up action.

How does AVS work?
You include the street address and ZIP code of the cardholder’s billing address in your authorization request. The Processor compares this information with the respective data at the cardholder’s issuing bank, along with other factors (card number, expiration date, etc.) and if approved, issues an AVS code. This additional address information will help you make a better informed decision about whether or not to complete a particular transaction.

How do merchants use AVS?
To request address verification in a card-not-present situation, follow these steps:
i. Enter the billing address as it appears on the monthly statement.
ii. Follow your terminal or computer instructions to enter and send this information.
iii. Research the returned AVS result codes.

Why is using AVS important?
Obtaining a positive AVS response is one key step to remedy many “Unauthorized Use” and “Non-Receipt of Merchandise” chargebacks. Without a positive AVS response (on-line) merchants have no dispute rights. AVS is designed to help merchants protect themselves against fraudulent, lost, or stolen credit cards and chargebacks. Visa transactions utilizing AVS are given a better interchange rate than those that do not. You should always be maintaining a customer database or account history files to track buying patterns and compare. Evaluate individual sales for signs of possible fraud. Keep in mind that none of the above by itself means that fraud is being committed, but you should check everything. AVS is not foolproof, but a tool to aid merchants to identify possible fraud orders. It should be combined with your own internal fraud detection tools and with the Card Verification Codes (see below).

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