Shipping address vs billing address
The Helcim Blog / Merchant Guides

What is AVS (Address Verification Service)?

Nic Beique | September 14, 2021

“Address Verification Service is a tool allows to check if the address of a credit card is linked to the person claiming to own that card.”

2 min read

What is AVS?

AVS stands for Address Verification Service and is a tool which uses a customer’s address to determine if they are the legitimate owner of a credit card. AVS credit card verification is used for card-not-present purchases (e.g. online or through a virtual terminal). For business owners, the AVS tool is usually provided to you by your credit card processor and can be used whenever you’re processing one of these transactions.

AVS is one of a number of fraud prevention tools that can help prevent stolen credit cards from being used for purchases at your business.

How Does AVS Verify An Address?

When a customer has finished adding items to their cart on your site and is ready to pay, they are brought to a payment form. On this form, they are asked to enter their credit card payment information, along with their billing address.

While the credit card transaction is being processed, the system will also compare the billing address entered by the user at checkout, with the address linked on file at the customer’s credit card bank (the issuer). As part of the transaction response, an AVS response code will be returned. Examples of these could be “X” for “Exact Match”, or “N” “No Match”.

View a full list of possible AVS response codes here.

AVS Doesn’t Stop Transactions From Going Through

Keep in mind that the AVS result doesn’t always impact whether a transaction is approved or declined – it only gives you the result of the address. That means that if the customer enters an incorrect address, the transaction can still be approved by the bank. It is up to you as the merchant to decide, based on your comfort level, whether you should ship the item or cancel their order and refund the transaction.

Examples of Where AVS Is Used

  • In an Online Store or Payment Gateway
  • Processing credit cards over the phone
  • Online Invoicing
  • Recurring billing (stored in a Credit Card Vault)

    AVS Increases Your Security

    AVS is just one of many tools that merchants can use to review orders and prevent fraud. When your business combines an AVS system with other security measures like requiring a CVV on your credit card transactions, you reduce the risk of exposing your business to fraudulent orders. Check out our blog article on nine ways to spot fraud and avoid processing stolen credit cards for additional tips on protecting your business from fraud.

AVS is one of a number of fraud prevention tools that can help prevent stolen credit cards from being used for purchases at your business.

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