When a customer makes a card-not-present (CNP) transaction at your business (over the phone, ecommerce, etc.), how do you make sure that the transaction is legitimate? The AVS, or Address Verification Service, is one tool you can use to protect your business from credit card fraud online. However, you may be asking: How does AVS work? Great question! Let’s answer that right now.
What is AVS and What Does It Do?
In order to combat fraud in an online transaction, you need to make sure that the person who is making the purchase is actually the person whose name is on the credit card. How can you confirm this? AVS is a helpful tool that checks for one critical fraud indicator – whether or not the billing address used for the order matches the billing address on file for the credit card. If they do match, it’s likely that the transaction is legitimate. If they don’t, it’s up to the business owner to decide if they want to allow the transaction to be processed.
How Does AVS Work?
In most cases, the AVS verification process occurs when the transaction is submitted for authorization. The payment gateway sends the billing address to the issuing bank, which returns a code that indicates how close of a match the two addresses are. This table shows the different AVS code options and what they mean:
AVS Letter Code |
Match? |
What It Means |
Y |
Yes |
Full match on street address and five-digit zip code |
X |
Yes |
Full match on street address and nine-digit zip code |
Z |
Partial |
Five-digit zip codes matches, but street address does not match |
W |
Partial |
Nine-digit zip codes matches, but street address does not match |
A |
Partial |
Street address matches, but zip code does not match |
N |
No |
Street address and zip code both do not match |
G |
International Card |
Card was issued by a non-US bank |
R |
Error – Try Again |
The system returned a temporary error or timed out |
U |
Error – Data Unavailable |
The card issuer doesn’t support AVS or no data was available from the issuing bank |
[…] How Does AVS Work? […]