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My company is using the Stripe API to process credit cards. Stripe offers Zip code and Address Verification System (AVS) checks. AVS checks the street number the user entered against the street number at the issuing bank.

Stripe returns one of three results: PASS, FAIL, and UNCHECKED. Unchecked means the bank does not support this feature.

So, the question becomes whether to accept only payments that PASS or to reject only payments that FAIL. I would prefer to be more conservative and only accept payments that PASS, but I would like to first know how many potentially good customers that might be "unchecked".

My question: What percentage of US based credit cards, processing in US dollars, through only Visa or MasterCard don't check AVS? A range is fine (ie. 5-10%)

Justin Elkow
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3 Answers3

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It's going to be tough to put a percentage on it. That would vary greatly depending on the source(s) used, length of time, type of sites studied, etc.

In general, though, if you ship a product to an address that did not pass AVS verification, you will be liable for any fraud that could potentially take place on such an order. Credit Card companies (including PayPal or whoever) are not going to cover you if you don't ship to verified/confirmed addresses.

So it's really up to you. I personally like to set my PayPal account to flag orders where AVS does not pass, but still accept the money. That way I'll see right away that something is funny on the order and I can do my own due-diligence prior to shipping the product or delivering goods in any fashion. If I'm not happy with anything I see I can go ahead and refund the payment and cancel the order. If I decide I'm comfortable, go ahead and deliver.

Drew Angell
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Firstly, my processor is not Stripe.

Sampled on productio, out of 137321 VISA/Master transactions, 684 (0.5%) didn't processed by issuer bank, and 4521 (3.28%) didn't have AVS result from my processor. So the total is about 3.78%. Hope this make sense to you.

dumduke
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  • Thanks! Very helpful. Do you only accept US credit cards in US dollars? Or does this data include another country or currency? – Justin Elkow Aug 07 '14 at 18:04
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Credit cards? Close to zero. It's in the best interests of issuing financial institutions to supply AVS data for their customers' debit and credit cards; most merchants will reject an AVS fail, saving a whole lot of effort around dealing with fraud. (I believe, though I haven't seen the policies recently, that supplying AVS is also still required for the issuing bank to qualify for the card brand's expanded liability protection.)

For US cards, your "UNCHECKED" responses will almost entirely be stored balance cards (i.e. prepaid debit cards or gift cards). But even among stored balance cards, it's not uncommon to simply return an AVS Pass for any address. As mentioned above, non-pass results make merchants all itchy.

colinm
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