| This article talks about a very important
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| | limitations, because this may impact your
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| issue for Internet merchants . . .
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| | decision-making about how to treat bad
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| preventing online fraud. Most of the
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| | verification results:
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| attention in the press surrounding online
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| | -The AVS system isn't always reliable;
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| fraud is focused on consumers...whether
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| | bad results can be triggered
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| its having their credit card numbers
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| | unnecessarily because people move, or
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| stolen by hackers or being suckered into
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| | because some people report five-digit zip
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| giving their personal and financial
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| | codes and some report nine-digit zip
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| information by a phony email phishing
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| | codes. This may generate a response
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| scam. But barely any attention has been
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| | stating that the address matches, but the
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| given to the other side of the coin...the
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| | zip code does not match.
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| Internet merchants who are defrauded by
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| | -The AVS system can't handle addresses
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| crooks posing as legitimate consumers.
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| | outside the U.S., so if you decide to
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| One of the first things you need to do as
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| | ship only to addresses with good AVS
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| a merchant to prevent fraud is to always
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| | results, you will rule out all
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| verify who the consumer is. On
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| | international orders. Online merchants
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| card-present transactions, this can
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| | typically do not rely solely on the AVS
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| easily be done by asking for a valid
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| | result to accept or reject an order. Most
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| photo identification card, for example, a
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| | online merchants use the address
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| driver's license or state issued ID card.
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| | verification service as part of an
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| On card-not-present-transactions, this is
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| | overall fraud prevention program and in
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| a much more difficult task for the
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| | conjunction with several other tools to
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| merchant to accomplish.
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| | help them prevent fraud. Now we'll talk
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| There are two basic steps that every
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| | about the second step in basic fraud
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| online merchant should follow to ensure
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| | prevention - Card Code Verification
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| that the consumer is legitimate.
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| | To help reduce fraud in the
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| The first step in preventing fraud in a
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| | card-not-present environment, credit card
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| card-not present environment is called
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| | companies have introduced a card code
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| address verification or AVS. The consumer
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| | program. Visa(R) calls this code Card
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| should be required to enter their billing
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| | Verification Value (CVV); MasterCard(R)
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| address when they are filling out their
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| | calls it Card Validation Code (CVC);
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| credit card information. The payment
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| | Discover(R) and American Express call it
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| gateway will then send this information
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| | Card ID (CID).. The card code is a three-
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| to the payment processor for
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| | or four- digit security code that is
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| verification. The payment processor will
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| | printed on the back of cards. The number
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| then pass the address information to the
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| | typically appears at the end of the
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| issuing bank who will then match that
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| | signature panel. This program helps
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| information with the address information
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| | validate that a genuine card is being
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| they have on file for that card. The
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| | used during a transaction. Card code
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| payment gateway will then send back some
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| | verification works similar to address
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| codes to let you know whether or not the
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| | verification. The payment gateway passes
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| AVS was a match. AVS only compares the
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| | the code entered by the consumer to the
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| street number and ZIP code against the
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| | payment processor who then compares it to
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| information on file with the card issuing
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| | what is on file at the card issuing bank.
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| bank.. So if the street address was 1234
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| | The payment gateway then returns a code
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| Main Street and the ZIP code was 90210,
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| | to let you know whether the numbers
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| the transaction processor would compare
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| | matched. This helps to verify that the
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| 1234 and 90210 with the issuing bank's
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| | person using the card has the card in
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| information.
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| | their possession at the time they place
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| Once this process is completed, you will
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| | the order.
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| get an AVS code that tells you how well
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| | We advise all merchants to require this
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| the address matched the bank's records.
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| | code for all credit card transactions to
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| If you get an AVS code indicating that
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| | help combat fraud. It is important to
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| the address and/or zip code do not match,
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| | note however that these numbers can be
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| it is up to you to decide whether you
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| | obtained by fraudsters just as credit
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| wish to accept the risk and ship the
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| | card numbers are obtained if they are
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| goods to the customer. We recommend that
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| | stored by the merchant. It is for that
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| you do not ship goods in cases where the
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| | reason that the card associations
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| zip codes do not match. This will not
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| | prohibit merchants from storing these
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| only help to prevent chargebacks but will
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| | codes in their system.The use of CVV2,
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| also prevent problems from occurring if
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| | CVC2 , and CID by online merchants has
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| the consumer works during the day. The
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| | continued to increase, rising from 44% of
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| shipping companies have become so
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| | online merchants using this tool in 2003
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| inundated with packages from the
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| | to 66% today. It appears that asking for
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| ever-growing Internet world that they
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| | the CVV2 , CVC2, and CID has become
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| will drop the package at the door, often
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| | standard practice for the majority of
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| times not waiting for a signature.
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| | online merchants.
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| Without a signature, you do not have
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| | So there you have it. Two very basic and
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| proof of delivery. And without proof of
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| | easy fraud prevention tools that every
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| delivery it is very hard to fight a
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| | online merchant should use to prevent
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| chargeback.
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| | fraud and eliminate chargebacks.
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| It is important to know that AVS has some
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