Why you should always use AVS for protection

by Neil Moncrief on April 21, 2009

If you own or manage an e-commerce business, and you’re not using the Address Verification Service (AVS) to help validate orders, you’re increasing your exposure to chargebacks. Like most security measures, AVS is not perfect. For instance, it only works with participating banks, which limits its effectiveness overseas. But, at the very least, it can be used to separate your customers into two broad groups: those who are almost certain to be legitimate and those you should give a second look.

Take a few minutes to read this article I posted at the Bank of America forum for small business owners. The article describes the risks you take if you either fail to use AVS on your commercial website or you choose to ignore the warnings received from AVS. This is the true story of how my own Internet business, 2BigFeet.com, ignored the signs and lost a lot of money. If you’ve never heard of AVS, or you’re just not using it now, take a look. Hopefully, it’ll help you avoid the hard lesson we learned.

And one last thing… there is no cost to credit card processors for AVS. In fact, your credit card processor should offer it for free and encourage you to use it. After all, reducing chargebacks benefits both processors and merchants. If your processor is padding their profits by charging an AVS fee, whose interests are they protecting?

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{ 1 comment… read it below or add one }

Patrick October 25, 2010 at 12:10 pm

I think you may be wrong re the cost to processors of AVS. I think the cost is $0.01, which is very low, but still a cost.

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