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How to Boost Conversion Rates, While Lowering Merchant Account
By: Eric Graham, Sun Mar 26th, 2006
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!
About the author:
Want to improve your conversion rates? Eric Graham is the CEO of
several successful online companies. Internationally recognized
as a top authority on eCommerce & Website Conversion , he's an
in-demand speaker & consultant.
Visit http://web-site-evaluations.com>www.web-site-evaluations.co
m today for an in-depth evaluation to boost YOUR websites
conversion rate!
