Credit Cards: Can AVS be checked before Authorization?

Question

Hi Everyone,

This is a question about credit card processing. We are using AVS and have found that each transaction that fails because of AVS causes a hold for the total amount to be placed on the customer's card. Multiple failures mean multiple holds.

This happens because AVS is checked only after the AUTH is done. So if AVS fails, then a VOID is done. So you have an AUTH followed by a VOID which results in a hold.

Since most of our customers make very large purchases, multiple holds for this amount are a real problem. My questions for you are:

1. Can AVS be checked before an AUTH is done?

2. Does these holds happen for all merchants or just smaller ones? I've never had this happen to me and I buy stuff online frequently.

3. I've heard that you can do an AUTH/VOID of $1 to just to check the AVS. Is this a good way to handle the problem?

Any suggestions are welcome. Thank you.

Answer 1

unless your payment processor supports a custom method that does verification only, you'd need to do what you describe in a delayed capture + AVS scenario with large ticket amounts...

the best thing is to charge $0.01 first and check the avs result... annoying, but eliminates the hold/void issue...

Answer 2

Visa is starting to charge a "misuse of auth" fee for those $1.00 transactions and is pushing users to a $0.00 auth transaction. So a $1.00 may end up costing you more you expect.

See: http://www.braintreepaymentsolutions.com/blog/Visa-misuse-of-authorization/ and http://www.braintreepaymentsolutions.com/blog/Account-Verification-with-a-Zero-Dollar-Value-authorization-request/

I hadn't heard of a processor still holding funds for a failed AVS transaction. That doesn't seem right. Have you tried talking to your processor/gateway?