Address Verification Service (AVS) is a fraud prevention tool that can block unauthorized transactions during card-not-present purchases. It compares the billing address provided during checkout with the address on file at the cardholder’s bank, analysing the numeric portions of the street address and ZIP code. AVS results are returned during the authorization process and indicate whether there is a full, partial, or no match. A full match means the person making the purchase is likely the cardholder. A no match could indicate a fraudster is attempting to use stolen card details but hasn’t accessed the cardholder’s personal information.
AVS is one of the earliest adopted security measures for ecommerce and is supported by most card brands (Visa, Mastercard, etc.). However, AVS is usually only relevant in the U.S. and isn’t always compatible with international transactions.
You can use AVS results to inform real-time fraud decisions. A mismatch might not automatically mean fraud, but it can indicate the need for additional checks before fulfilling an order. AltoPay provides control over how your system responds to AVS results — whether that’s flagging, rejecting, or manually reviewing transactions. Understanding how to interpret these results can help reduce your exposure to chargebacks while maintaining conversion rates.
A deep dive into AVS
AVS is a long-standing fraud detection solution, but it isn’t outdated. There is still a time and place for this verification tool. Let’s take a closer look at how this solutions works and if it might be a good fit for your business.
How does AVS authentication work?
AVS is a technical process that happens in a matter of seconds, but it acts more like a real-time conversation between you and the cardholder’s issuing bank — you ask the bank to check information shared during the checkout process and the bank lets you know if it’s valid or not.
Here’s a high-level overview of the process.
What are AVS response codes?
When you submit an AVS response, the issuer will respond with a code that explains whether or not the information provided matched what was on file. The response code can help you determine whether or not you should finalize the transaction.
There are several AVS response codes, but they basically imply one of three things:
Each card brand maintains their own set of AVS response codes which differ by meaning and syntax.
| CODE | AMEX DESCRIPTION | DISCOVER DESCRIPTION | MASTERCARD DESCRIPTION | VISA DESCRIPTION |
|---|---|---|---|---|
| A | Address matches, ZIP does not | Address and 5-digit or 9-digit ZIP match | Address matches, ZIP does not | Address matches, ZIP does not |
| B | Not applicable | Not applicable | Not applicable | Address matches, ZIP not verified |
| C | Not applicable | Not applicable | Not applicable | Address and ZIP not verified |
| D | ZIP matches, name does not | Not applicable | Not applicable | Address and ZIP match |
| E | Address and ZIP match, name does not | Not applicable | Not applicable | Not applicable |
| F | Address matches, name does not | Not applicable | Not applicable | Address and ZIP match (UK only) |
| G | Not applicable | Not applicable | Not applicable | Address not verified for international transaction |
| I | Not applicable | Not applicable | Not applicable | Address not verified |
| K | Name matches | Not applicable | Not applicable | Not applicable |
| L | Name and ZIP match | Not applicable | Not applicable | Not applicable |
| M | Name, address, and ZIP match | Not applicable | Not applicable | Address and ZIP match |
| N | Neither ZIP nor address match | Neither ZIP nor address match | Neither ZIP nor address match | Neither ZIP nor address match |
| O | Name and address match | Not applicable | Not applicable | Not applicable |
| P | Not applicable | Not applicable | Not applicable | ZIP matches, address not verified |
| R | System unavailable, retry | Not applicable | System unavailable, retry | System unavailable, retry |
| S | Does not support AVS | Does not support AVS | Does not support AVS | Does not support AVS |
| T | Not applicable | 9-digit ZIP matches, address does not | Not applicable | Not applicable |
| U | Information not available | System unavailable, retry | Information not available | Information not available |
| W | Name, ZIP, and address do not match | Information not available | 9-digit ZIP matches, address does not | Not applicable |
| X | Not applicable | 9-digit ZIP and address match | Address and 9-digit ZIP match | Not applicable |
| Y | Address and ZIP match | Address matches | Address and 5-digit ZIP match | Address and 5-digit or 9-digit ZIP match |
| Z | ZIP code matches | ZIP matches, address does not | ZIP matches, address does not | ZIP matches, address does not |
How do I activate and use AVS?
AVS is usually implemented by your acquirer or gateway. If you want to add AVS to your fraud detection and chargeback management strategy, here’s what you would do.
- Check your gateway settings. You might be able to activate AVS yourself.
- Set up your rules. An AVS request can yield one of a dozen different response codes. You have to decide which ones you want to accept and which you want to decline. For example, will you have very conservative settings and only approve a transaction with a full match? Or will you also allow partial matches?
- Monitor your results. If your rules are too strict or lenient, you can adjust to accommodate your risk goals.
- Keep track of your response codes. Positive AVS response codes can be used as compelling evidence if you choose to fight chargebacks resulting from false fraud claims.
What are the pros and cons of AVS?
AVS can be a helpful fraud and chargeback management tool, but it isn’t a good fit for all businesses. Check the potential benefits and drawbacks to determine if AVS would be a good addition to your risk strategy.
PROS
- AVS can reduce the risk of unauthorized transactions. By detecting and blocking criminal activity, you can terminate unauthorized transactions and avoid the resulting chargebacks.
- AVS might help reduce your processing fees. Everyone in the payments ecosystem has an interest in reducing criminal fraud — including issuers and processors. If you do your part to keep fraud to a minimum, you may be rewarded with lower interchange rates and acquirer fees. Check our processing fees guide to learn more.
- AVS can help recover lost revenue. Positive AVS response codes can be used as supporting documentation if you choose to challenge friendly fraud chargebacks. Since AVS data is fairly compelling, you have a chance to recover revenue lost to the invalid chargeback.
CONS
- AVS isn’t as useful as it once was. When AVS was invented, fraudsters were placing orders with physical cards that were lost or stolen. And AVS would stop these criminals because they rarely had access to the cardholder’s personal information. However, fraud tactics have changed. Now, most criminals are using payment information that was obtained in a data breach. And if payment information was compromised, billing information was probably exposed too.
- AVS isn’t a global solution. As of now, AVS can only be used to verify cards issued in the U.S., U.K., and Canada.
- AVS can cause false declines. A mismatch doesn’t always mean fraud. Maybe the cardholder mistyped his or her information or forgot to change banking information after moving. Declining these transactions turns away good customers.
