Payment systems have gotten much more complicated in the last 20 years. This will continue to happen as fraud prevention tools are becoming more sophisticated and complex.
One fraud prevention tool that is important for all credit card transactions is AVS. AVS stands for Address Verification System. The card brands (Visa, MasterCard and Discover) require that a customer’s billing address be entered for any card-not-present transaction (keyed-in, online, etc.).
It is important to always enter AVS information and not bypass those fields. Making sure that employees are trained to always enter that information is an often overlooked step. Transactions can still be approved without entering that information.
When completing a card not present transaction, be sure to check the receipt to make sure it says AVS match. A transaction can be approved without the matching information. Getting an AVS partial match or no match means that there was a data entry error or the card holder provided the wrong information. If the card holder provided the wrong information, it could indicate a fraudulent transaction and they are relying on the you to not notice or realize the significance.
Here are the most common AVS codes found typically at the bottom of a receipt:
- A – Partial Match – The street addresses match but the zip codes don’t.
- G – International Card – The issuing bank is outside of the U.S.
- N – No Match – Neither the street address or zip code matches what the bank has on file.
- R – Retry – Something happened on the server end. You should just run it again if this error fires.
- U – Unavailable – Either the bank doesn’t have any information on file or doesn’t support AVS. Use your discretion and other order review processes to determine whether or not to accept the transaction.
- Y – Full Match – The 5-digit zip code and corresponding street address match.
- Z – Partial Match – The 5-digit zip code is right, but the street address isn’t. Possible problem here is that the customer has a different billing address.
You can access a complete list of codes across different credit card bank types here.
If the transaction does not get an AVS match, it is our recommendation to void the transaction and verify information. If there is not a data entry error or the cardholder gives the same information, it would be best to ask for another form of payment to protect your business from a possibly fraudulent transaction.
Using AVS is not a fail safe but it is a tool you can use to help prevent fraudulent transactions in your business.