Address Verification

Table Of Contents

Address Verification Service (AVS)

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Debtor Inspector has been verifying postal addresses for over 20 years.

Our proprietary software utilizes a custom algorithm that compiles and verifies public and private records in real-time, from over 2,777 sources, so you can accurately verify physical mailing addresses quicker.

Whether you’re a person who is looking to locate a debtor or another individual or, a business owner who ships goods, sends out direct mail campaigns, and/or is looking to do a bulk address verification check on the mailing addresses in your CRM, Debtor Inspector can help you to look up and verify the accuracy of your addresses.

Address Verification Service (AVS) 101

What Is Address Verification?

An address verification service (aka “AVS”) or “address verification check” is done to ensure the validity of physical mailing addresses.

An AVS check can be done manually by searching through various data sources, and/or through the use of a sophisticated tool.

Validating an address before sending out something in the mail is always a good idea. Unless of course, you want to waste postage on mail that never makes it to its destination, and subsequently, deal with the headache of resending that mail out again (this time, to the right address!).

Besides making sure that a physical address exists and is not being made up by a debtor or person who has gone into hiding, there are other use cases where an address verification check comes in handy.

Common Reasons For Verifying An Address

Improved Mail Delivery

As mentioned above, address verification checks can give you peace of mind when sending items to a physical address. Ultimately, if you want to avoid a “return to sender” situation, do an address check beforehand.

Fraud Prevention

While the word fraud may not come to mind along with checking the validity of a physical address, fraud prevention comes into play mostly when dealing with e-commerce transactions.

Since online transactions can be done without the use of a physical card (this is called a “Card Not Present” transaction), preventative measures should be taken to ensure that the person entering the information online is the rightful and/or authorized owner of the card.

Anytime you see an online form that asks you to verify your credit card’s billing address with your shipping address, that is AVS at play.

Similar to how online security questions are asked to prove you are the rightful cardholder, online merchants ask for the physical address you entered while first registering your card as a type of security check.

Another type of check that is done is to ask for a card’s CVV (Card Verification Value) number which is the three-digit number found on the back of a credit or debit card.

The CVV number is not encoded onto the card strip that is swiped during a payment. Furthermore, merchants are forbidden from storing CVVs. The only person who would know a CVV number is the card’s owner/authorized user or in the worst-case scenario, a fraudster who had access to the physical card at one point, or who had acquired a card’s information by using a sophisticated form of hacking.

Since fraudsters are always on the prowl to buy things with other people’s money, utilizing an AVS before approving a transaction can protect both the person getting scammed, as well as the merchant who could incur a chargeback (i.e. money returned to them) once the rightful owner finds out that their card was used to make a purchase without their knowledge.

Cost Savings

As previously mentioned, performing an address verification check can save you money from going out to buy additional postage after a package is sent back to you due to an invalid address.

As a merchant, doing an AVS check before finalizing a transaction prevents chargebacks from customers whose card information was stolen and used to purchase unauthorized goods.

While both extra postage and chargebacks are direct costs associated with not doing an AVS check, you must also consider the time you will waste (i.e. opportunity cost of time) rectifying issues that could’ve been prevented had you implemented an AVS.

Updating Business Databases and CRMs

Businesses can use an AVS to clean up the postal addresses in their databases and CRM software.

Doing an address check can reveal if a business has moved, or went out of business.

Additionally, doing an address check before launching a direct mail marketing campaign will prevent any headaches that occur from mail being sent back to you.

If businesses are looking to verify multiple addresses at once (i.e. “in bulk”), they can utilize something called Batch Address Verification Services.

Improved Customer Satisfaction

Implementing an AVS can improve customer satisfaction in several ways:

  1. Reducing Frustration – Utilizing an AVS ensures packages will be delivered to the correct address. This prevents any inconveniences that may be incurred by the customer due to delayed or lost packages.
  2. Faster Online Transactions – A more sophisticated AVS tool can auto-fill fields and save a customer’s time from manually having to type information in.
  3. Brand Equity – Ensuring that goods are delivered in a timely and accurate manner instills trust and a positive perception of a company’s brand. Customers will equate that brand as being professional, reliable, and dedicated to ensuring a good customer experience.

Compliance With Regulations

Implementing an AVS can help businesses to remain compliant, and to abide by general and industry-specific regulations

The following are the most common regulations where an AVS service is used:

  1. Know Your Customer (KYC) – Primarily used by financial institutions this regulation states that you should have enough information about your potential and current customers to know their identities and understand any potential financial risks they may pose.
  2. Anti-Money Laundering (AML) – Primarily used by financial institutions this regulation exists to prevent the use of financial systems for money laundering, terrorist financing, and other illicit activities
  3. Payment Card Industry Data Security Standard (PCI DSS) – Primarily used by major payment card companies such as Visa, Mastercard, American Express, and Discover. This regulation is in place to ensure the secure handling, processing, and storage of cardholder data.

In short, An AVS can do more than just see if a debtor or individual intentionally gave you the wrong address because they don’t want you to know their whereabouts.

Whether you are a business that is shipping goods or is sending out direct mail marketing campaigns or an individual that is sending goods en masse for personal reasons (e.g. wedding invitations, Christmas cards, etc.) utilizing an AVS is always a good idea.

What Steps Are Involved In AVS Verification?

AVS processes vary depending on the system or provider that is being used.

That being said, however, here are the most common steps that are involved:

  1. Address Input – Enter all the information you have on an address.
  2. Address Standardization – An AVS system will check the address information against current standards to ensure that the information you have entered is correct and resembles a valid address.
  3. Address Matching – The AVS system will then cross-reference (i.e. “match”) this address to other databases that are known to contain valid addresses.
  4. Match Response Code – Once a match has been made, the AVS generates a response code that signals the accuracy of the match.

What are AVS Response Codes And How Do They Work?

An AVS response code is usually a letter and/or number that signifies the level of accuracy for a postal address.

AVS match response codes may vary depending on the provider or service, but the most common AVS codes are as follows:

  1. M = Matched Address. This shows that the address you are trying to verify matches the address data in the AVS database(s).
  2. U = Unmatched Address. This shows that the address you are trying to verify does not match the address data in the AVS database(s). If you encounter this code, double-check that you have inputted the address correctly before concluding that the address does not exist.
  3. P = Partial Match. This shows that the address you are trying to verify partially matches the address data in the AVS database(s)
  4. Multiple Matches = (e.g. M1, M2, M3, etc). This shows that the address you are trying to verify has more than one match (most likely because it looks similar to other matches). If you receive this code, it means that more investigation needs to be done on your behalf.

Knowing how accurate a physical address is will help you to reduce risk no matter what your use case.

Who Should Use An Address Verification Service?

Both individuals and businesses can utilize an AVS.

Individuals may use an AVS to find a missing person, or for when they have to send goods en masse (e.g. wedding invitations, Christmas cards, etc.).

Businesses typically use an AVS to:

  1. Check the validity of an address before mailing out direct marketing campaigns or sending corporate gifts
  2. Update their database or CRM software
  3. Keep records up to date for regulatory purposes
  4. Catch a fraudulent attempt before it happens

Some businesses utilize an AVS more than others.

Below are the businesses that use AVS the most, and their reasoning behind it:

  1. E-commerce Retailers – To ensure goods get sent to the right address
  2. Financial Institutions – To verify identities, and addresses when opening accounts. An AVS is also used to verify possible fraudulent transactions where something was purchased in a different area than where the cardholder was at the time of purchase.
  3. Logistics and Shipping Companies – To confirm routes and improve efficiency in deliveries
  4. Government Agencies – To validate citizen addresses for voting, tax, and census purposes.
  5. Call and Customer Support Centers – To verify addresses while they are on the phone with customers.
  6. Direct Mail Marketing and Branded Merchandise Promotion Companies – To the volume of shipments that they make, utilizing an AVS will significantly reduce risk and potential postage wastage.
  7. Utilities and Service Providers – For billing and service address purposes.

No matter what industry your business is in, if you deal with any postal addresses, utilizing an AVS can ensure data accuracy, reduce errors, improve operational efficiency, and enhance your business’s customer experience.

Address Verification FAQ

The AVS process varies depending on the system or provider, but typically, it is composed of 4 steps.

  1. Address Input – Enter all the information you have on an address.
  2. Address Standardization – An AVS system will check the address information against current standards to ensure that the information you have entered is correct and resembles a valid address.
  3. Address Matching – The AVS system will then cross-reference (i.e. “match”) this address to other databases that are known to contain valid addresses.
  4. Match Response Code – Once a match has been made, the AVS generates a response code that signals the accuracy of the match.

No. Utilizing an AVS is not legally required, but some industries may use it to more easily comply with certain regulations.

The decision to use an address verification service ultimately depends on the specific needs, industry requirements, and risk management strategies of each organization.

Most businesses choose to implement an AVS as a best practice to mitigate risk, prevent fraud, and maintain data integrity.

The first step in performing an address verification check is to ensure that you have as much information as possible on the addresses you want to verify.

Be sure to have the following information before you begin an address verification check:

  1. Resident or Business Name
  2. Street Name. Be sure to make note of abbreviations such as “Blvd” for Boulevard.
  3. House Number and or Apartment/Unit Number. Please note that sometimes, basements are converted into apartments. These apartments can be listed under “Basement Apartment” or be assigned another name.
  4. City
  5. State/Province
  6. County
  7. Postal Code/Zip Code
  8. Country

The key to a successful address verification check is doing your prep work beforehand and being as precise as possible with the addresses you have and want to verify.

This article is for educational purposes and does not constitute legal, employment, or tax advice.

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