Join Now!

Always verify address when manually entering credit card transactions

It’s generally bad practice to manually enter credit card transactions – it costs you more to process these sales and, especially in cases where the card isn’t present, opens your business up to the possibility of fraud. Still, there are times when you won’t have a choice but to manually enter a customer’s credit card number (and if you have a mail order component to your business, manually entered transactions are the norm).

When performing manually entered transactions there is a way to limit the likelihood of foul play by ensuring that the mailing address supplied to you by the customer matches what is on file with the credit card company. Verifying the billing address is simple and helps to protect your business from a chargeback, which is a dispute over the transaction with the customer. Your processing terminal will prompt you to enter the card holder’s address. Depending on the type of terminal you utilize, you may be prompted for the full address, the street address or just the zip code.

To determine whether the address supplied to you by the customer matches the address on file with the credit card company, you need to examine the printed receipt. While the terminal will approve the dollar amount of the transaction, it does not verify the address. It is your responsibility to do this by taking a look at the receipt.

When examining a receipt to determine whether the addresses match, look at the AVS (Address Verification System) slot (see accompanying diagram). For manually entered transactions you will find a “Y” or “N” printed in this slot. A “Y” indicates that the address supplied by the customer matches that on file with the card company. An “N” tells you that the address doesn’t match the card company’s address and you need to verify it a second time. The customer may have supplied you with a work address or the address to a second home. Or they may have given you their physical address, but the billing address is a PO Box number.

If the customer is unable to supply you with the correct address, you have the right to void the transaction and retain your merchandise. You will need to explain to the customer why you are unable to sell them the goods and the importance of verifying the correct address information.

While you may always be diligent about verifying addresses for manually entered transactions, you need to ensure that your employees are also following the correct protocol. While the credit card terminal will prompt the user to enter the customer’s billing address, it is easy to bypass this request and simply complete the sale.

Failing to verify the customer’s address for manually entered transactions can have costly consequences. If the address wasn’t verified on the receipt (an “N” was present) and a chargeback occurs, the card company will hold you fully liable for the dispute because you did not follow correct card acceptance procedures. Verifying that the addresses match with a “Y” printed on the receipt shows the card company that you followed procedure; this gives you a stronger leg to stand on in defense of chargeback accusations.

If your terminal is not prompting for address information during a manually entered transaction, call your credit card processing experts immediately to rectify the problem.