Using an Address Verification System (AVS) when processing your online credit card transactions can help to reduce the number of fraudulent transactions you receive. However, most online merchants don’t know that using AVS can also reduce your number of legitimate orders.

Using AVS can hurt your conversion rates in two main ways.

1. If you set your AVS rules to reject all transactions that do not match both street address and zip code, you may be loosing legitimate sales from customers who do not understand that the billing address needs to match the address that their credit card statement is mailed to.

2. The more troublesome problem with AVS occurs when your customer has recently moved. Even if you update your billing address with your credit card company after you move, it can take up to 6 months or longer for them to update the AVS database with your new information (even though they make sure that the bill arrives at the right address!)

The worst part about this delay is that often customers will blame the merchant if their card gets rejected for this reason. If their credit card bill arrives at the right address, they assume that their credit card company updated their information. When a card that they know should work gets rejected by your website, they often become angry with you, not their card provider!

This happened to me recently. I moved my family into a larger home over eight months ago and the debit card that I use for most of my online purchases still gets rejected unless I use my old billing address, even though the bank statement has come to our new address from day one!

The solution to the first problem is quite easy. Simply make sure that you use a statement near your “Billing Address” fields telling your customers something along the lines of, “To speed processing of your order, please ensure your billing address matches the address on your credit card statement.”

Include this type of statement near your “Billing Address” fields and your AVS matches will improve.

In markets with historically low attempted fraud rates, you can also try loosening your AVS rules a bit. Most AVS systems check both the number in the street address and the zip code. By setting your AVS rules to accept transactions that match for only one of the two AVS numbers, but still rejecting transactions that do not match for both, you can improve the number of successful transactions. If you attempted fraud rate is very low you can even try accepting transactions that fail both AVS checks, but flag the transactions for additional follow up before shipping.

Before loosening your AVS rules, you need to understand that most merchant account providers classify transactions that do not match for both street address and zip code as “non-qualified” transactions. These transactions usually get charged a higher discount rate than your normal discount rate. Depending on you merchant account agreement this penalty can add up to an additional 2% above your normal discount rate, so check with your merchant account provider before accepting “no match” transactions.

The solution to the second problem take a little bit more work to implement, however it can significantly reduce the number of AVS mismatches you receive. For this solution you can keep your AVS system set to reject “no match” transactions, however you need to modify your “Card Rejected” error page to include a brief educational statement, such as the one below.

“We’re sorry, your credit card has been declined. This can happen for several reasons. Your billing address* should match the address on your credit card statement. Please check your billing address, card number and expiration date and try again.

*NOTE: If you have recently moved, your credit card company may not have updated your billing address in their Address Verification Database. It can take up to 6 months or longer for some credit card companies to update your address, even if they send your bill to your new address. If you have recently moved, try using your previous billing address when you check out.”

By making just a few changes in the way you use AVS at your web site and by educating your customers about address verification, you can boost your conversion rates and sales, while lowering your merchant account fees!

Copyright 2004 Eric Graham

Eric Graham is the owner and CEO of several successful online and offline businesses. Recognized as one of the top authorities on eCommerce and Internet Marketing, Eric is a sought after speaker and consultant. To boost YOUR conversion rates and gain an unfair advantage over your competition visit www.web-site-evaluations.com.

A Quick Note From The Publisher... If you like the article above, you may be interested in the following article which is also related to Merchant Accounts... Your Web Merchant Account Do you know of competitors who are using a Web merchant account? If so, chances are they are more than satisfied with the benefits this type of account can confer on a business of any size. Assuming this is the case, do you really want to be left behind as your colleagues begin to see profit increases from 50% to 400%? Obviously not! Now is the time to maximize your company's potential by applying for a merchant account that will support your company's image and credit card processing operations on the Internet. If you already have a Website, let a merchant account make it even better by enhancing your technical operating functions. If you don't have a Website, a merchant account can make it easy to put one up and start accepting credit payments from your clients. When you apply for a Web merchant account, you are asking for a bank or another financial underwriter to support your credit excursions into the world of e-commerce. As more and more business owners look...

Merchant Accounts, Credit Card Merchant Accounts News

Merchant Warehouse Named Provider of the Year for 2012 by BestInternetMerchantAccount.com BestInternetMerchantAccount.com has selected Merchant Warehouse as the merchant service provider of the year for 2012 because of the outstanding merchant services they provide to businesses everywhere.St. George, UT (PRWEB) January 23, 2012 The Best Internet Merchant Account website is an excellent resource for businesses of all kinds to gather information about the best merchant services ... Leaders Merchant Services Ranked as Best Credit Card Processors by topcreditcardprocessors.com for Month of February ... topcreditcardprocessors.com, the independent authority on credit card processors, has named Leaders Merchant Services as the best credit card processor for the month of February 2012.(PRWEB) February 06, 2012 The independent authority on credit card processors, topcreditcardprocessors.com, has named the top ten best credit card processing companies for the month of February 2012. During the ... Merchant Warehouse Provides Agents Greater Efficiency and Convenience in Managing Business With CB Mobile Office Merchant Warehouse®, a leading innovator in secure payment processing solutions and merchant account services, today announced the release of CB Mobile Office, a new suite of online tools designed for independent sales agents to expand their portfolios with dramatically enhanced efficiency. BluePay, a Provider of Merchant Processing Services, Offers New Plugin for QuickBooks Point of Sale CHICAGO, IL-- - BluePay, a top merchant account provider, offers a new QuickBooks Point of Sale plugin for seamless accounting software integration. Now, in addition to integrating with any workstation ...