AVS Response Codes

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AVS Response Codes

When an Address Verification System is in use, alphanumeric single character codes are issued by the card-issuing bank after attempting to match address information submitted by card users with the billing information held on file by the card issuers.

Address Verification System attempts to limit fraud by ensuring the address information matches what is supplied by the cardholder versus what is listed with the card issuers.

What are AVS Response Codes?

If the information provided by the customer and what is on file match, the code ‘Y’ is issued and the transaction is said to be authorized.

If the information does not match, there is a code issued that describes the reason for the mismatch.

Here are some commonly seen codes:

• ‘A’ = Street address matches, zip code does not
• ‘Z’ = Zipcode matches, the street address does not
• ‘N’ = Neither street address nor zip code do not match

For a full list of codes, check out this chart.

In-Person Transactions

In the case of in-person merchant transactions, the merchant has the authority to approve, decline, or make an exception based on what code is returned.

It is important to train your employees about AVS Response Codes and how to respond.

If you are a gas station, for example, you may ask customers for billing zip codes. If the code is returned as a mismatch, you can simply inform the customer and retry using a different billing code.

There are legitimate reasons why a customer may supply the incorrect billing code:

• The card is provided to them by their employer and does not match the address of the business
• The customer recently moved and has not updated their billing address
• The customer may not be aware of what billing address is listed

You, as the merchant, should be wary of mismatches as you risk the possibility of chargebacks being initiated if you accept a card that has a mismatch. This can adversely affect your payment processing account.

Online Transactions

As more and more transactions occur online, these ‘ cards not present’ transactions continue to constitute an increasing percentage of transactions. This means, there is no physical card presented during the transaction. The information is all submitted electronically.

As a merchant, you can work with your credit card processor to determine which AVS codes you will allow. Of course, transactions that receive a ‘Y’ code can be considered to be the safest, however, even those are not foolproof.

Unfortunately, when credit card information is stolen, the thieves often also steal the billing information. This makes it very likely for the AVS system to be evaded entirely.

Other Methods of Protection

Luckily, AVS is only one layer of fraud protection for online transactions available to merchants. Other methods to limit fraud include IP address confirmation, device recognition, email confirmations, and 3D Secure technology that can use multiple data points to identify potentially suspicious activity.

Understand Your Options

If you are going to collect credit card payments, especially digitally, it is important to configure your terminal or gateway for AVS Response Codes properly to minimize the level of risk you are willing to accept as a merchant.

Our payment processing specialists are available to review this information in detail so you can protect your business from fraud while still optimizing sales.

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