Card Processing Cash Discount Processing Surcharging Traditional Card Processing

Address Verification Service – AVS Fees

Address Verification Service

I had a business owner reach out to me this week with a few questions, one was regarding AVS Fees, they are on Cash Discount processing, so would normally not have any processing fees, however their contract included an additional Address Verification Service (AVS) fee, typically this either passed on at cost ($.01) or is covered by the per transaction fee, in this case the fee is $1.95 every time they use the AVS – which is prompted for in all Card Not Present (CNP) transactions. For a delivery business, such as a Pizza restaurant or a Resort taking room deposits over the phone you could trigger this fee frequently. Not using the service could get your transaction downgraded and you will incur a higher fees

I don’t think it would be wise to recommend bypassing AVS, even though some believe it’s antiquated and sometimes results in lost revenue. I would recommend reaching out to your processor to see if terms can be renegotiated to make sense for how you operate. In the case of the cash discount client a downgrade would adversely affect the processors margins. Where as in traditional processing it would affect the merchants margins and depending on the amount of the sale potentially more than the AVS fee. I could see where some merchants may choose to make a business decision to not utilize AVS in some situations if they have not had charge-backs and no merchandise is actually leaving their business – such as taking a deposit.

Don’t be in a rush to sign a contract on the spot – first ask what any fees listed are for and what triggers them to see how it will affect your business.