Handling AVS Mismatches for Credit and Debit Transactions

Jan 06, 2014

A common stumbling block for small businesses is AVS (Address Verification System) mismatches during credit or debit card transactions. These mismatches are fairly common and can occur online or in person. They’re an inconvenience to the customer who temporarily loses the funds used for the purchase and they’re an inconvenience to the merchant because they are often blamed for the error.

The problem occurs when a customer mistypes or doesn’t know the billing address attached to the debit or credit card they’re attempting to use. The money to be transferred then gets put on hold while the credit/debit card company confirms the billing address provided. The merchant does not receive the funds unless the AVS is a match. If it’s not the customer’s bank puts a hold on the funds which appears as a charge to the customer, but the merchant never touches the actual money. The bank holds the funds for 24-48 hours and the credit card company asks the merchant to void the transaction, which again the merchant has no record of being successful in the first place. While the funds are being held before being returned to the customer they call and blame the merchant for the hold on the funds. This creates a massive headache for the merchant and appears as poor customer service.

There are two basic options for the merchant to reduce the frequency of these mismatches. The first is to reduce the number of fields required to match for AVS. You can reduce the AVS requirements to just, for example, zip code. This will reduce the number of errors on input by the customer. If there’s a mismatch on just one field then you, as the merchant, can ‘eyeball’ the mismatch and determine if it’s high-risk or not. A high-risk order would be a large bulk order or a suspicious shipping address. If there is a cause for concern the merchant can simply e-mail the customer and confirm the wrong address or zip code; 99% of the time the customer will clear up the error immediately.

The second option is to eliminate AVS match requirements totally. This will prevent duplicate transactions and the customer from losing access to funds. This requires you the merchant to make risk assessments for each transaction as to fraudulent activity, but it will eliminate the AVS mismatch problem completely.

AVS mismatches create an error that is not the merchant’s fault but is also usually regarded as poor customer service by the merchant. Either of the two options above, limiting the number of AVS fields required to match or eliminating AVS altogether, are simple changes to the settings of your merchant account that can reduce the number of headaches caused by AVS mismatches.



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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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