Address verification systems: An integral component of a seamless path to purchase

Content Marketing
March 14, 2022

It’s the little things in life that matter, including customers’ shopping experiences. The checkout stage is easily overlooked by eCommerce professionals, who may think once customers are there, the sale is in the bag. However, many people still abandon their carts before completing checkout due to a variety of factors.

Research shows that 18% of shoppers abandon their carts due to complex checkout processes, and 12% abandon carts because they have to input too much information. To avoid losing out on sales due to inefficient checkout processes, we recommend adding address verification systems to streamline your purchase journey.

What is an address verification system (AVS)?

An address verification system is a service that validates an address to ensure it’s accurate by cross-referencing the inputted information against a database of addresses.

Having an effective and reliable address verification system (AVS) provides your customers with a better checkout experience and can significantly increase conversion rates. It also ensures you ship your goods to the correct address every time, which strengthens your brand reputation.

An AVS checks a buyer-provided address against the addresses available from whatever fulfillment partner your shipments flow through, such as UPS or FedEx. An AVS also checks that the cardholder’s billing address is a match to prevent fraud. This happens quickly behind the scenes to streamline the checkout process for customers.

AVS comes in two types:

1) A system that makes sure a customer’s entered address is registered with major shipping carriers. This ensures addresses are properly inputted and reduces the likelihood of carrier confusion at the shipping stage. Merchants can use AVS to reduce the number of checkout errors and increase conversion rates in the process.

2) A service provided by major credit card processors to enable merchants to authenticate the ownership of a credit or debit card. This fraud-detection system can flag suspicious activity and help protect you and your customers from fraudulent transactions.

In this instance, an AVS will detect differences in billing and shipping addresses as well as verify the correct address input to ensure payment goes through smoothly and shipping addresses are correct as well.

In this article, we’ll discuss the first of these two options by diving into how it works, why it’s important, and how you can implement an AVS to improve your checkout process and protect your business. Read on to learn more.

Benefits of having an address verification system

Simply put, AVS protects your business from losses by validating addresses before an order is complete.

Capture accurate addresses

Address verification is important in eCommerce. If a product is not shipped to the right place, someone (most likely you) will have to pay for shipping to have it rerouted to the correct location. 

Faster check-out

The less time a customer spends on your checkout page, the less likely they are to change their mind about their purchase and abandon their cart. AVS speeds up the checkout process by providing a convenient auto-complete form as soon as enough address information has been provided.

This both captures the right address the first time and makes the process easier for your customers by removing the need to fill out long input fields. Win-win.

Real-time verification

Customers don’t want to see a pop-up announcing a problem with their address when they’re trying to submit their order. Real-time AVS can check each field as they enter it and let them know immediately if there’s a problem.

Ensure delivery

Shipping addresses also need to be formatted in a specific way to be valid, and an auto-complete AVS can ensure addresses are always formatted correctly for a given destination.

By ensuring addresses are properly inputted in the appropriate format, an AVS acts as a safety net for your business to prevent you from sending your products to inaccurate or invalid addresses. This will save you money and headaches.

How to find out whether you need an AVS

You can set up a checkout process without an AVS; lots of online stores do. But having an AVS integrated into your checkout process can save you a lot of hassle down the line. Although human error is never completely avoidable, an AVS serves as an insurance policy for accuracy.

Customers may abandon their cart if address errors prevent them from completing the checkout process. This is frustrating for customers who’ve come to expect simple and speedy checkouts. To meet this expectation, an AVS can offer suggested address edits based on databases, and real-time AVS notifications can alert a customer when an address is inputted incorrectly.

Without an AVS in place, if your customer makes an address error, there are no safeguards to prevent you from sending the shipment to the wrong location. This is the start of a customer service nightmare.

If a package ends up completely lost (whether it disappears in transit or ends up delivered to a different address and the wrong recipient decides to keep it), you’re out the cost of the item(s), and your customer is out their money (and none too happy about it). For merchants with expensive products or low profit margins, this can be crippling if it happens repeatedly.

Conversely, if a package is returned to you, someone will need to pay to ship it again. This could be on you, as customers dislike having to pay for their order to be shipped twice, even if they were responsible for the mistake in the first place. It’s good customer service to offer to pay the cost of reshipping the item(s) and, depending on how upset the customer is over the delivery delay, this could be your only chance to retain them.

Not all customers will balk at the thought of paying to send back an item. Nevertheless, covering the shipping cost is a great opportunity to provide memorable customer service. Pleasant customers like these are almost always worth going above and beyond for, and the positive experience will increase the likelihood they’ll return and buy again.

If the package needs to be rerouted to the correct destination, there are other fees that apply. FedEx and UPS both attempt to fix wrong addresses by comparing them to their databases. When this occurs, you’ll be charged a fee as the merchant. As of 2021, FedEx charges $18 per package, and UPS charges $17. These fees tend to increase each year, so don’t be surprised if it’s even more expensive in the future.

It’s important to note any packages charged this fee are no longer covered under delivery speed guarantees (i.e., the guarantee that the shipping cost will be refunded if the package is not delivered on time).

In the case of USPS, there’s no automated process for this service. You’re required to perform a package intercept, which you can only do if the shipment is still in transit. You also need to know the customer entered their address incorrectly, which you may not be aware of if they don’t reach out. If the customer fails to realize they made a mistake with their address or doesn’t communicate it to you, you’ll have no way of knowing an interception is needed.

How to add AVS to checkout

For sellers who operate Shopify stores, it’s easy to integrate AVS applications via the Shopify App Store. Some options you can use include Shipping Address Validator by RoboTurk and Smart Zipcode Validator by JoboApps.

Shipping Address Validator key features:

  • Prevent incorrect addresses: Upon discovery of anomalies, customers are provided with feedback to help them correct errors.
  • Customizable: You can tailor the look and sound of reminders, and offer interactive notifications and emails that complement your store’s branding to maintain consistent consumer communication.
  • Block addresses that are undeliverable: Customize prompts and warnings to alert consumers when they enter address types you don’t deliver to, like P.O. boxes or DHL shipstations, so they can be remedied before the order is complete.

Smart Zipcode Validator key features:

  • Customizable Zipcode Widget: Tailor the Zipcode Widget to fit your store’s style, including text, background color scheme, and more.
  • Determine product availability via zip code: Customers can use their zip code to check whether or not an item is available in their area.
  • Fast and simple setup: One-click configuration makes setup quick and easy.

You can also use the Google Places Autocomplete feature to support address verification. Google Places is part of the Google Maps platform and includes in-depth details about millions of points of interest around the globe, including precise addresses for shipping and billing purposes.

International addresses and address verification systems

If you ship internationally, you’ll need to find an AVS solution that can support addresses outside the U.S.

While U.S. addresses have five-digit numerical zip codes, Canadian addresses have six-digit alphanumeric postal codes, and the U.K. uses a four-digit postcode. If your address form is set to allow only five-digit U.S. zip codes, your international addresses won’t be accepted. 

Phone numbers will also be different across regions. Make sure your address form includes a section to select country codes so the correct person can be contacted.

You can tap into the address databases of other countries by leveraging the address verification systems of foreign postal services and other APIs (e.g., Canada Post or via PostGrid).

Wrapping up — Use address verification systems to ensure seamless paths to purchase and delivery

Invalid shipping addresses can be a huge hassle, but it’s an avoidable problem. You can take steps today to prevent these issues from affecting your business and your customers.

Implementing an address verification system is not only an eCommerce best practice, but also an insurance policy for your business. With a reliable AVS in place, you’ll increase conversion rates by reducing cart abandonment due to address form errors at checkout. At the same time, you’ll create an optimized checkout process that will improve your customer retention.

You’ll have peace of mind knowing inputted addresses have been verified as accurate, which will reduce your losses from lost shipments, redirecting packages, and chargebacks or returns due to late or undelivered goods. This will ensure happier customers who are more likely to shop with you again, thus helping you grow your brand, your business, and your reputation. 

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Rachel Go
Content Marketing

This is an article by Rachel Go. Rachel is a remote product marketer with a background in building scalable content engines. She creates content that wins customers for B2B eCommerce companies like MyFBAPrep, Pipe17, and more. In the past, she has scaled organic acquisition efforts for companies like Deliverr, Skubana, and Hubstaff.

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