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.

---

The Ecommerce Business Plan

Simply put, business plans can make or break your business.... Read More

Pitfalls of Doing Big International Brokerage Business Online

Nothing has helped international brokerage business more than the internet:... Read More

How to Generate Cash from Your Web Site

The Internet has changed the way people do business today.... Read More

The Internet and Customer Care: Aid or Anarchy?

It was reported in 'Marketing' magazine this month, that Britain... Read More

A Beginners Guide To Setting Up A Successful Online Store

A beginner's guide to setting up a successful online store... Read More

5 Tips for Online Shopping

Shopping online has become more and more popular in America... Read More

Are You Making These E-Commerce Excuses? (part 1)

A year ago, I had big plans to re-vamp my... Read More

Shopping Cart Usability

Usable Shopping Carts Increase SalesE-commerce has been around since 1993... Read More

Retirement Signature Frames ? The Perfect Retirement Gift!

When most people think of a retirement gift, they think... Read More

Why This Is The Perfect Time To Start Charging For Website Subscriptions

If you're a writer, researcher, subject matter expert, enthusiastic hobbyist,... Read More

The Check is in the E-mail

Have you ever had someone who owed your business money... Read More

Dont Get Ripped Off Getting A Merchant Account

Far too many people get ripped off when setting up... Read More

Cyber Banking

The use of electronic cash as a means of transacting... Read More

One Point Two Billion

In this surreal world of the internet, anyone, even you,... Read More

Shopping Carts For The Faint Of Heart

The chief criteria for judging an ecommerce shopping cart are... Read More

Ecommerce - Boost Your Business ROI

Did you know that over 90% of all online orders... Read More

How To Implement E-Business Solutions Successfully

Pitfalls of E-business solutions installation processA large distribution company has... Read More

Saving Money On Your E-commerce Site

After building and transferring many e-commerce sites it still amazes... Read More

How To Sell Websites Fast !

This article will explain in depth the steps needed to... Read More

Ecommerce Marketing Plan

Concept of ServiceThe current work deals with marketing offer of... Read More

Effective Management Of Your Customer Services

With a third party merchant account you will have a... Read More

ECommerce Scenario in Pakistan

Pakistan with highest growth rates in 1960s and bad politics... Read More

Conducting Business through B2B E-marketplaces

Businesses, which are still sitting on sidelines and not doing... Read More

E-marketplaces from Sellers Perspective

What is an E-marketplace anyway?E-marketplace is a business to business... Read More

Drop-Shipping ? A Great Way of Making Money Online

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

Free Competition Analysis for E-Commerce Startup

For anyone who has completed research regarding e-commerce, there are... Read More

Online Florists - Send Flowers Online When Youre In a Hurry

You did it again, didn't you? Forgot until the last... Read More

The Top 10 E-Commerce Ways to Follow up with Clients - Part 1

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

How Do You Make Money Online?

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

Precautions Necessary for an Online Brokerage Business

Maybe no business requiring little or no capital pays as... Read More

Database: The Secret of Success

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

Content Ever be Profitable?

THE CURRENT WORRIES1. Content SuppliersThe Ethos of Free ContentContent Suppliers... Read More

7 Key Steps To Reduce Refunds and Chargebacks

One sure-fire way to loosing out big time on your... Read More