to Boost Conversion Rates, While Lowering Merchant Account Fees!
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.
By Eric Graham
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
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.
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”
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.
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.
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
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!
About the Author
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 visit www.web-site-evaluations.com.
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