How to Boost Conversion Rates, While Lowering Merchant Account Fees!

Using an Address Verification System (AVS) when processing your online credit card transactions can help to reduce the number of fraudulent transactions you receive. However, most online merchants don't know that using AVS can also reduce your number of legitimate orders.

Using AVS can hurt your conversion rates in two main ways.

1. If you set your AVS rules to reject all transactions that do not match both street address and zip code, you may be loosing legitimate sales from customers who do not understand that the billing address needs to match the address that their credit card statement is mailed to.

2. The more troublesome problem with AVS occurs when your customer has recently moved. Even if you update your billing address with your credit card company after you move, it can take up to 6 months or longer for them to update the AVS database with your new information (even though they make sure that the bill arrives at the right address!)

The worst part about this delay is that often customers will blame the merchant if their card gets rejected for this reason. If their credit card bill arrives at the right address, they assume that their credit card company updated their information. When a card that they know should work gets rejected by your website, they often become angry with you, not their card provider!

This happened to me recently. I moved my family into a larger home over eight months ago and the debit card that I use for most of my online purchases still gets rejected unless I use my old billing address, even though the bank statement has come to our new address from day one!

The solution to the first problem is quite easy. Simply make sure that you use a statement near your "Billing Address" fields telling your customers something along the lines of, "To speed processing of your order, please ensure your billing address matches the address on your credit card statement."

Include this type of statement near your "Billing Address" fields and your AVS matches will improve.

In markets with historically low attempted fraud rates, you can also try loosening your AVS rules a bit. Most AVS systems check both the number in the street address and the zip code. By setting your AVS rules to accept transactions that match for only one of the two AVS numbers, but still rejecting transactions that do not match for both, you can improve the number of successful transactions. If you attempted fraud rate is very low you can even try accepting transactions that fail both AVS checks, but flag the transactions for additional follow up before shipping.

Before loosening your AVS rules, you need to understand that most merchant account providers classify transactions that do not match for both street address and zip code as "non-qualified" transactions. These transactions usually get charged a higher discount rate than your normal discount rate. Depending on you merchant account agreement this penalty can add up to an additional 2% above your normal discount rate, so check with your merchant account provider before accepting "no match" transactions.

The solution to the second problem take a little bit more work to implement, however it can significantly reduce the number of AVS mismatches you receive. For this solution you can keep your AVS system set to reject "no match" transactions, however you need to modify your "Card Rejected" error page to include a brief educational statement, such as the one below.

"We're sorry, your credit card has been declined. This can happen for several reasons. Your billing address* should match the address on your credit card statement. Please check your billing address, card number and expiration date and try again.

*NOTE: If you have recently moved, your credit card company may not have updated your billing address in their Address Verification Database. It can take up to 6 months or longer for some credit card companies to update your address, even if they send your bill to your new address. If you have recently moved, try using your previous billing address when you check out."

By making just a few changes in the way you use AVS at your web site and by educating your customers about address verification, you can boost your conversion rates and sales, while lowering your merchant account fees!

Copyright 2004 Eric Graham

About The Author

Eric Graham is the owner and CEO of several successful online and offline businesses. Recognized as one of the top authorities on eCommerce and Internet Marketing, Eric is a sought after speaker and consultant. To boost YOUR conversion rates and gain an unfair advantage over your competition visit www.web-site-evaluations.com.

---

Selling From Your Website

Greetings!Friends and relitives ask us all the time " How... Read More

Database: The Secret of Success

BENEFITS OF A DATABASEBy maintaining your list as a database,... Read More

Shopping Online: What You Should Know

For some people, shopping online is as normal as driving... Read More

Grow Your Business Using B2B Emarketplace - Part I

If you are a small to medium size company and... Read More

Make That 3 Billion

My previous article I wrote called "One Point Two Billion"... Read More

Are You Making These E-Commerce Excuses? (part 2)

Last time, we started to take a look at the... Read More

How Do You Make Money Online?

If you learn how other people make money online, I... Read More

Home Sweet Home Page

"Your home page is the world's introduction to you and... Read More

12 Easy and Effective Ways To Create Reports

1. Combine a few of your articles into a free... Read More

Choosing the Right Online Shopping Cart

Are you a website owner or a web designer/developer? If... Read More

Creating Legal Framework for E-commerce Taxation; non-tax statutes

We have to make amendments in existing substantive and procedural... Read More

How Measuring Key Performance Indicators Can Improve E-Commerce Strategy - Part Two

Why time spent on your site is importantAll websites regardless... Read More

Creating The Perfect Ecommerce Website

If you're thinking of jumping on the bandwagon and going... Read More

Guide To Safe Online Shopping

Online shopping can be a little frightening to people who... Read More

Chinas IT Industry to Maintain Fast Growth

China's IT industry is expected to see a sales revenue... Read More

Chinas Online Shopping May Be Booming In The Next Few Years

Data from China Internet Network Information Center (CNNIC) shows that... Read More

Web Users Crave Familiarity

The sad truth is, general Web users would love it... Read More

The Top 10 E-Commerce Ways to Follow up with Clients - Part 2

Did you know that 80% of all sales are made... Read More

Top Ten Qualities to Look for in an Online Pharmacy

As you may have noted, there are thousands or even... Read More

Keep Your Customers Happy by Organizing Your Payment Options

Anyone using a slow, or an awkward payment processor had... Read More

Drop-Shipping ? A Great Way of Making Money Online

Using the Internet to sell products and services to ever... Read More

Short Story: The Benefits of Shopping Online

Maria's new lifestyle: Short story about the benefits shopping on... Read More

Increasing E-commerce Website Sales

With consumers purchasing billions of dollars of merchandise online each... Read More

Choosing on Order Fulfillment Service

When your eCommerce business grows to the point where you... Read More

PayPal Powered

Three years ago I was doing some work for a... Read More

Web advertising e-Marketing Places!

Overview:What is web advertising?Internet Advertising is popularly known as web... Read More

The Census and the E-Commerce Wave

Understanding business and product sales can sometimes put me in... Read More

How To Turn Any Product You Sell In To Residual Income

The concept of this is for you to offer a... Read More

Accepting Credit Card Payments Online

Being able to accept credit cards and other online payments... Read More

Intranet Portals ? Collaboration through Team Rooms

Knowledge Management for beginnersKnowledge Management (KM) can be defined simply... Read More

Complementary-Relational Linking and How It Could Save Your Internet Business

The concept of linking is that sites with common interests... Read More

Choosing An Internet Merchant Account

Surf to Google and perform a search on "Internet Merchant... Read More

Do You Need A Merchant Account?

Deciding when to get your own merchant account for internet... Read More