With the holiday season upon us, and with the growing popularity of gift card usage, it’s important that merchants prepare to accept gift cards, which may require a change in your AVS (Address Verification System) settings.
The main issue with accepting gift (& pre-paid) cards is that the majority of the time, the customer will not have their billing address registered with the card issuing bank of the gift card.
As most merchants using Durango have been advised, obtaining positive AVS responses is a key component of reducing fraud and limiting your chargeback liability. However, one of the default AVS responses that is typically blocked is the “U” response (which is returned by the card issuing bank when “Address Information for the Card Holder is Unavailable”).
To accept gift cards, merchants have two options:
Require the customer to call the 800# listed on the back of the gift card to register their billing address so that a positive AVS response can be obtained on the transaction
Uncheck the “U” AVS setting
Obviously, the 2nd option is the more practical solution, however, it does open the door for increased chargeback liability; we’d caution merchants to be vigilant in screening orders.
To uncheck the “U” AVS setting in your Durango gateway account, please log into your control panel at our merchant login page, click on “Settings” on the left-hand side, then click on “Address Verification,” then uncheck the “U” option, and finish by clicking “Save.”
One additional note about gift cards is that if your customer has already attempted to checkout on your site, and received a “Declined” transaction due to your existing AVS settings, their card may have been “Authorized” for the amount due, even though they received a decline. This is due to how the card brands handle authorizations & AVS responses, please read our article explaining AVS & CVV Declines & Authorizations.
If you’ve stumbled on our page because it’s too difficult to get support from your current processor, perhaps it’s time to give yourself the gift of a dedicated merchant account manager from Durango Merchant Services!