I'm having a problem with authorize.net and I'm hoping someone has an idea on how to fix it.
On our website, we have integrated authorize.net into our shopping cart (using their Advanced Integration Method - AIM). When a customer clicks the final submit button, we do a real-time "authorize only" event on their credit card. We also have the address verification system (AVS) turned on. Authorize.net attempts to do the card authorization first, and if that succeeds, then they do the address verification. So what happens is sometimes a legitimate customer will put in the wrong billing address (e.g., moved recently, used work address instead of home address, etc.), which will result in a transaction being declined. However, in reality, the authorization on their card was approved, but since the AVS was declined, the overall status of the transaction from our end results in a decline. If a customer is using a debit card, the bank will withdraw the money immediately upon authorization, even if the AVS fails, because the authorization is done first. What we end up with are customers that never actually completed a sale, but still showing that we charged their card, or completed sales with duplicate transactions. These pseudo-charges can take up to 30 days to be removed from the customers account by the bank, and there is nothing we as a merchant can do to speed up the process.
The banks have gotten even worse the past few months and often are hitting our customers with overdraft charges in these instances. Here is an example:
- Customer has $500 in their checking account
- Customer places a $300 order with us using their debit card. On the first submission, they put their new address, but the bank has not updated the AVS system, so the AVS fails, but the bank shows $300 withdrawn
- Customer enters their old billing address and re-submits the transaction. This time AVS is successful. However, now the charge has gone through twice, so the bank has taken out a total of $600, and customer gets an overdraft fee.
We are having these kinds of issues on a weekly basis now. Authorize.net claims they can't reverse the processing order to do AVS before authorization. This is what I got back from authorize after I basically asked them to reconsider:
"We can not reconsider our policy. It is part of our agreement with the Card-Issuing Banks and the Payment Processors that we will only decline the transactions because of an AVS mismatch after the bank has already authorized the transaction. That is not something that we can reconsider or that we can do differently. I am so sorry about that."
There is also no way to do an "AVS only" type transaction. I can't believe that as big as authorize.net is, that nobody else is having this problem. I'm open to any suggestions on how to get around this issue. Thanks,