Using AVS as a Security Feature

Understanding AVS in Online Payments

Address Verification System (AVS Check)

What is AVS?

AVS stands for Address Verification System. It’s a security feature used by credit card companies to help prevent fraud during card-not-present (online) transactions. AVS checks the billing address entered by the customer at checkout against the one on file with the cardholder’s bank to determine whether the transaction should be approved or declined.

Why AVS Errors Happen

When a customer enters a postal code that does not match what the bank has on file, the payment may be declined. This is to protect against unauthorized use of the credit card.

Common reasons for AVS mismatches:

• Typing errors (wrong/incomplete postal code, incorrect formatting, etc.)

• Using a different billing address than the one linked to the card

• Outdated address on the cardholder’s account

• Non-Canadian or international cards where AVS support may vary
  
  

How It Appears to Customers

• When AVS fails, customers may see a failed response like: "Your request has failed the AVS check"
• This usually means they need to double-check the postal code linked to their card.
  
  
  

1. Stay calm and informative
   

   • If a customer reports a failed payment, let them know the AVS Check is a fraud prevention tool, and it usually means the billing postal code didn’t match.
     
     
   • If the charge appears on their card as a pending transaction (but the order didn't go through), let him/her know that the charge will drop within 3-5 business days. The amount was reserved on the customer's card for protection and will not post.
     
     
   • They can retry the transaction again after verifying the billing address, specifically the postal code.
       

2. Encourage double-checking
   

   • Ask the customer to re-enter their billing postal code exactly as it appears on their cardholder statement. They can check their banking app or previous statements to be 100% sure.
      
     

   • You can enter the instruction in the Admin Portal > Store Settings > Online Menu: Configuration > 'Custom Pickup Message' field and/or 'Subtle Place Order Text'. This would be displayed on the checkout page.
      
     

3. Try a different card
   

   • If issues persist, customers can try using a different card.

Can AVS Be Disabled?

• AVS is an optional add-on feature but is typically recommended by payment processors. In most cases, it cannot be selectively disabled without increasing the risk of chargebacks or unauthorized transactions. Merchants who bypass AVS may become more vulnerable to disputes and lose chargeback protection.
   
  
• If you feel that AVS is causing too many false declines, you can reach out to your payment provider to review your current risk settings or thresholds.

Best Practice for Merchants

• Ensure your staff understand what AVS is and how to explain it simply.
   
  

• Add a short note on your checkout page, such as:
  “Please ensure your billing postal code matches the address on file with your bank. AVS mismatch may cause your payment to fail."
   

• Consider activating 3D Secure 2.0 for Online Payments *highly recommended*
   
• Ensure AVS is enabled within your online merchant account (check with your payment provider if you're unsure). Then ensure it's also activated in Buddi (Admin Portal > Store Settings > Online Menu: Payment) by checking the box.