What is an AVS Mismatch?

Getting an AVS mismatch is just one reason why a credit card transaction might get declined.

Both cardholders and business owners dread seeing that purchase didn’t go through, but not everyone understands AVS and how it works.

As a business owner, this is information you should know so you’ll have a better grasp of how to proceed with these orders.

What is AVS?

AVS stands for Address Verification System.

It’s a fraud-prevention requirement that’s in place with card-not-present transactions. For instance, it’s often used in phone or e-commerce transactions.

Having an AVS requirement means that the billing information provided during checkout must match the information the credit card company has on file.

Two different numbers are checked during the verification process; the customer’s house number and their zip code. Both need to match for the transaction to be approved.

What is an AVS Mismatch Error? 

Whenever a cardholder’s address doesn’t match, it will cause an error to occur. The transaction won’t process. This is called an AVS mismatch error.

One of three types of codes are given to the business when an online payment is initiated:

• AVS match

• AVS partial match

• AVS mismatch

Do AVS Mismatches Indicate Fraud? 

An AVS mismatch doesn’t always indicate that a transaction is fraudulent, although it’s possible that it could be. Sometimes it could simply mean that the customer entered the wrong zip code during the checkout process.

Any of the following could apply in the event of a mismatch:

• The customer might have recently moved and not changed their billing information with their credit card company yet.

• The customer might reside outside of the United States, United Kingdom, or Canada.

• The customer might have many credit cards with several different addresses, so they just made a mistake.

• The customer could have different billing and shipping addresses, and this caused the error.

Of course, it could also indicate that fraudsters are trying to purchase something illegally too.

What Does the Cardholder See in Their Account? 

Your customer may notice that their credit card company places a hold on the amount of their purchase in their account. That is typically what happens with an AVS mismatch error.

With some transactions, no holds will be placed on your customers’ funds at all. Ultimately, it’s up to the issuing bank and is completely dependent upon their policies.

If there is a hold placed on those funds, it should drop off in 2-3 business days. Alternatively, the customer can contact their credit card company and ask for the hold to be released.

How do You Fix an AVS Mismatch Error? 

Because not all AVS mismatches are a problem, there are times when you may want to bypass them and approve the transaction anyway. There are several options available to you as the business owner.

1. You may approve the transaction if it’s a customer you know and trust. This may be a good option if you have a long-time customer that you don’t want to upset.

2. You can reach out to the customer to verify their credit card details yourself. This is a way to show them that you care about their business and want to help. And it may keep you from losing a valued customer.

3. Encourage the customer to try putting it through again. While payment processing is very precise, it’s not perfect. Just like you might turn your computer off and back on again to correct any hidden problems, sometimes, once your customer tries to checkout again, it will work the next time.

4. Check your AVS filters. Are they set correctly? Are they too stringent? It’s a good idea to talk with your merchant service provider to make sure they’re set up correctly.

When you get an AVS mismatch error, you have to weigh the pros and cons of allowing it to go through anyway. No business owner wants to allow fraudulent transactions to process, but you also don’t want to turn away customers or make them angry either.

Using your best judgment will help you make these decisions on a case-by-case basis. Let’s take a look at some example situations.

Problem #1: AVS mismatch with the merchant account provider

Let’s say a customer is purchasing something from your online store, but there’s an AVS mismatch. The payment processor has declined the transaction, but when the customer checks their statement, they see that it’s pending.

In this scenario, the business owner says the transaction didn’t go through. The card issuer says it did.

Issuing banks and credit card networks will often still approve purchases with an AVS mismatch. In this case, you have three options:

• You can try again.

• You can do a manual override and make the payment go through.

• You can cancel the transaction.

If you try again, and it works, great! If not, it’s best to cancel the transaction to avoid having to pay a higher transaction fee for additional risk on that sale.

Problem #2: AVS mismatch with the bank

Sometimes there’s a problem with address verification with the bank. This is usually because of one of two reasons:

1. The customer has a P.O. Box, which isn’t always recognized.

2. The customer has updated their mailing address after they moved, but not their billing address.

Your customer might assure you over and over that their address is correct and all should be well. But again, use your own best judgment so you’ll know if you should continue or cancel.

If you think you could be dealing with fraudsters, it’s best to cancel.

Do Legitimate Charges Ever Get Flagged by AVS Mismatch Filters? 

Oh, yes. It happens all the time.

It’s best to have strong AVS filters because that way, you can trust that this system is doing what it’s intended to do - protect against fraudsters. You can always override the decision for customers you know and trust.

When in doubt, calling the customer will give both of you peace of mind. You may even want to offer to try again over the phone, so you can enter the information into your virtual terminal yourself manually.

If it still doesn’t work, have the customer contact their issuing bank or credit card, provider.

Can Illegitimate Charges Still Get AVS Matches? 

Once again, yes. And unfortunately, this also happens all the time.

There are criminals using the dark web to sell credit card credentials. They’ll sell addresses and CVVs (the codes on the backs of cards) at discounted rates to anyone who wants them. Many of these crooks sell this information on a massive scale too.

Sometimes scammers will use house numbers or zip codes that are close enough in hopes that transactions will go through. And many will take a chance that a merchant account provider doesn’t have the AVS filters set up correctly.

In the world we live in, fraud is a big problem, and it’s just about everywhere.

Information for Business Owners About AVS Mismatch

If you have an AVS mismatch, you’ll receive a code that explains what’s happening. Codes vary depending on the card that was used.

AVS Mismatch Code Chart

Code	Visa	Mastercard	Discover	American Express
A	Street number matches, but zip code doesn’t.	Street number and 5-digit zip code match.	Street number only matches	Street number and zip code match.
B	Street number matches, zip code is not verified.	N/A	N/A	N/A
C	Street numbers and zip codes are not verified.	N/A	N/A	N/A
D	Street number and zip match (international).	N/A	N/A	N/A
E	AVS is invalid or not allowed for the card type.	N/A	N/A	N/A
F	(UK) Street number and postal code match.	N/A	N/A	The street number matches, but the card member’s name does not.
G	Non-U.S. bank doesn’t support AVS.	N/A	N/A	N/A
I	The international transaction and street number are not verified.	N/A	N/A	N/A
K	N/A	N/A	N/A	Cardmember name matches.
L	N/A	N/A	N/A	Cardmember name and zip code match.
M	International transaction, street number and postal code match.	N/A	N/A	Cardmember’s name, street number, and zip code match.
N	The street number and zip code do not match.	The street number and zip code do not match.	The street number and zip code do not match.	The street number and zip code do not match.
O	N/A	N/A	N/A	Cardmember’s name and street number match.
P	The international transaction, zip code matches, and street numbers are not verifiable.	N/A	N/A	N/A
R	The system is unavailable, please retry.	The system is unavailable, please retry.	The system is unavailable, please retry.	The system is unavailable, please retry.
S	AVS is not supported.	AVS is not supported.	AVS is not supported.	AVS is not supported.
T	N/A	N/A	The 9-digit zip code matches, but the street number does not.	N/A
U	Street number information is unavailable. May be returned.	Street number information is unavailable. May be returned.	Street number information is unavailable. May be returned.	Street number information is unavailable. May be returned.
W	The 9-digit zip code matches, but the street number does not.	The 9-digit zip code matches, but the street number does not.	The 9-digit zip code matches, but the street number does not.	Cardmember’s name, zip code and street number do not match.
X	9-digit zip code and street number match.	9-digit zip code and street number match.	9-digit zip code and street number match.	N/A
Y	5-digit zip code and street number match.	5-digit zip code and street number match.	5-digit zip code and street number match.	5-digit zip code and street number match.
Z	5-digit zip code matches, street number does not.	5-digit zip code matches, street number does not.	5-digit zip code matches, street number does not.	5-digit zip code matches, street number does not.

What are the Benefits of AVS for Businesses? 

AVS was originally introduced to the credit card industry by Mastercard. But now all of them offer this service.

Considering the fact that fraud has never been so common, AVS is definitely a good thing. According to recent statistics, billions of dollars are lost each year because of e-commerce fraud.

The main goal of AVS is to allow business owners to verify that when customers are checking out with a card-not-present transaction, the customer is the actual cardholder. A match allows business owners to feel more secure and trust they will not lose money due to fraud.

What are the Cons? 

The biggest problem caused by AVS mismatches is false declines. When a customer is unable to successfully process an order on your site, it can leave them feeling frustrated. You may find any of the following to be true:

• Your customer might turn to your competitors.

• Your customer might never shop with you again.

• You might be labeled with having poor customer service.

• Your customer might take to social media to complain about your business.

Other Types of Credit Card Fraud

In addition to using similar addresses and addresses in foreign countries, there are other ways scammers complete fraudulent purchases.

• They may use pre-paid debit cards or other forms of payment instead. These don’t require AVS.

• They may buy digital products and use burner email addresses during checkout.

• They may open a credit card in a customer’s name fraudulently, using their stolen social security number.

• They may steal other types of data from customers.

Frequently Asked Questions

Should all AVS mismatched orders be rejected?

No, not all of them should be. Businesses should use their own best judgment when making the decision to let some transactions go through.

It’s a good idea to keep long-time and repeat customers happy in the event of an AVS mismatch. Otherwise, talk with the customer and ask them to call their credit card company or issuing bank.

Is an order legitimate if the AVS matches? 

Not necessarily. But a matching AVS is a good indicator that the transaction is not fraudulent.

Are all AVS mismatch orders fraudulent? 

No, many of them may be just entered incorrectly.

Are AVS and CVV the same? 

No, although both are there to deter fraud. The CVV (Card Verification Value) is there as another step in fraud detection.

Final Words

At Zenti, we do everything we can to protect our merchant customers from fraud. Having strong AVS filters is just a part of what we have to offer.

Have you dealt with fraud in the past? Want to make a change? Contact us at Zenti, and let’s talk about your payment processing and merchant account options.

Twitter: What is AVS mismatch, and as a business owner, what can you do if you see this type of error? Here, we break down your options and explain how to proceed.