Declined Credit Card Due to Incorrect Address V7

This applies to: RM, Electronic Funds

Overview

I received a declined transaction but the customer claims they were charged.

Set Up

When a card issuing bank receives a card number and an authorization request for a charge, they will confirm that the card number is attached to a valid account, and verify the account has enough available funds to cover the requested amount. If the funds are in fact available, the card issuing bank will reserve the funds for you, the merchant, and return an authorization code that would allow you to claim the funds during settlement.

The card issuing bank would also submit the cardholder's billing address to your payment processor's Address Verification Service (AVS) which returns, along with the authorization code, an AVS response to indicate whether or not the billing address matches the bank's records. As the merchant, it would be your choice whether or not to accept the transaction. Your Authorize.Net® account automates the process through your Address Verification Service settings in the Merchant Interface, which will filter transactions based on the AVS response. If a given AVS response is checked in your Address Verification Service settings, any transaction that is returned by the card issuing bank with that AVS response would be marked as Declined and will not be settled.

Know that even if the transaction is marked as Declined due to AVS Mismatch, the authorization code, along with the hold on the authorized funds, will remain on the customer's card until the card issuing bank removes the authorization. As a result, the held funds may be subtracted from the customer's available balance, and an online statement may reflect the authorization request which might be mistaken for an actual charge. Most card issuing banks will remove authorizations within 3-7 days if they are not claimed for settlement.