Credit Card Billing Address – Why Is It So Important?

You head on-line to buy from an Internet merchant. You are a long way from hitting your credit card limit and you actually paid your last balance in full so you feel able to treat yourself. You enter your credit card information in full, checking it all before you hit submit and… your credit card is declined. Before you panic too much you realize that you have yet to change your credit card billing address after your recent move. That is the reason for the declined transaction but you have to wonder why a credit card billing address is so important.

The Address Verification System

That your credit card address is correct at all times is actually far more important than you might have ever thought. The Address Verification System or AVS as it is more commonly known is exactly what it sounds like. In order to try to reduce the risk of fraudulent transactions and/or charge-backs, which are damaging to a company, the credit card billing address is requested with any charge and verified before authorization is given for the transaction.

When you enter your credit card information at an Internet site merchants who use the AVS system automatically compare the address you provide to the one that the issuing bank has on file and if the two do not match they often decline the card immediately, in case the card is being is fraudulently.

What If The Information Is Right?

The AVS goes completely upon the information it gets from the credit card issuer. If you happened to misspell just a small part of your address it will probably not verify correctly – for example, you typed “Ave” and your bank has “Avenue” – so you do have to make sure your bank has your address on file correctly at all times.

Another problem can occur if a merchant uses a double check with the USPS as an extra step in the address verification system. As far as the post office is concerned there is only one official version of your address and some people are often surprised to find that the USPS lists their address quite differently to their utilize company or cabals company, especially if they live in an apartment building or along a rural route. Sometimes if the bank and USPS versions of the credit card billing address do not match the credit card will be declined for that reason.

Some merchants will not decline a transaction completely if there is a slight discrepancy with the billing address and choose instead to put the transaction on hold and request additional information from the card holder by email or telephone to explain the discrepancy. It is normally smaller merchants that will go that extra mile, bigger companies will usually just request you use a different card.

Credit Card Billing Address and Shipping Address

There are a number of reasons why a consumer may want goods purchased on-line to be delivered to an address that is not the same as the credit card billing address. The purchase may be a gift, or an individual may have two different residences. Somber merchants will let this occur as long as the billing address checks out good with the AVS but as on-line fraud continues to be a problem more and more of them are putting holds on these kinds of transactions as well. Some are even stating outright that goods can only be shipped to the same address as the one on file as the credit card billing address.

Why Are Online Merchants So Worried about Fraud?

At first you might wonder why on-line merchants go to such lengths to verify that a credit card is not being used fraudulently when it is the customer who will suffer if the security breach is not discovered. That is actually far from the case. Most credit cards now come with a 0% liability feature that means that provided they are reported in a timely fashion a credit card holder will not be held liable for any unauthorized charges made on their credit card. It is still annoying and a real inconvenience but the most, under law, that a consumer can be held liable for in terms of fraudulent transactions is $50.

Merchants on the other hand stand to lose a lot more. Once a fraudulent transaction is discovered the credit card issuer “charges back” the disputed amount and the merchant is now out the amount of money of the transaction with very little recourse. If the identity of the fraudster is unknown they cannot pursue the real credit card holder for the money.

In addition to the lost revenue that charge backs cause too many of them and the merchants credit card processor is likely to drop them altogether as these charge-backs affect them too, in terms of lost fees. Once a company has been dropped by one credit card processor for this reason it is very hard for them to get another one to agree to take them on and often a business can suddenly find themselves unable to accept credit cards at all any more, something that can sink a business that does a lot of sales on-line in a matter of weeks.