Credit Card Address Verification System (AVS)

AVS – the Address Verification System is one of the biggest jokes in credit card technology.

The idea of the credit card address verification system is to help retailers verify that the person on the end of the phone placing a sales order is the genuine card holder. The retailer enters the customers billing address into their EPOS system, and the AVS will tell them if it is the genuine address of the cardholder.

The gives the retailer a warm feeling that any goods they ship to that address must be heading to the card holder, and they will be free from fraud.

However, it doesn't really work like this. The Address verification system ( AVS) is an extremely poor implementation of a good idea. All the system actually does is take any numbers appearing the first line of the address and the postcode, and checks this number. So, if I lived at 11 Long Road, SO11 4HG, this address looks the same to the AVS system as 11 Canal Street GU11 4JP. Suddenly you can see the flow in the system.

The confusion is compounded by the rest that comes back from the system. Credit card AVS can return a match or non match, but it can also return a fantastically unhelpful Partial Match. What the retailer is supposed to think of this, well, it is anybody's guess!

The AVS system does not offer any shift of liability or protection from fraud. The retailer is just as liable for charge backs regardless of the AVS result.

Very few parts of the world support the AVS system. The UK, loving some more redundant paperwork, has embraced it wholeheartedly. Most UK retailers think they are totally safe shipping to an Address Verified location. Sadly, most retailers are utterly mistaken. The AVS is considered a bit of a joke in the card processing industry, and is likely to be phased out very soon.

So is it of any use? Yes, I think the AVS system does have some use. If a transaction returns a non match, it gives a very clear indication that a particular credit card transaction should be considered more carefully than others. Think of it like this, and AVS match does not guarantee anything, however a non-match means that something is clearly wrong.

However, in most cases, a non match is because somebody wants their internet shopping sent to their work address instead of their home address.

So – never treat the credit card AVS system as accurate. It is a good guide of when things are wrong, but it is a terrible guide of when things are not wrong, is that makes any sense!