Consumers spent billions of dollars last year shopping online last year, enjoying the convenience of browsing from home or work and avoiding brick-and-mortar stores.
Most of these transactions go through seamlessly. However, customers can derail the process if they make some key mistakes.
Submitting payment and address information for several credit cards at different stores can be a hassle. Remembering which data goes where is sometimes a great feat.
Address mismatches can cost shoppers valuable time, whether it is starting their transactions over, waiting on customer support, or talking to their bank.
That is bad for the merchant and the customer. Web commerce firm Sleeknote found that 30% of shoppers will abandon their cart if they have to re-enter their credit card information.
Billing address matters when you make purchases online because it is used to approve the order. Merchants use the Address Verification System to check that a customer’s billing address matches what is on file with their bank. If it matches, the transaction will go through and payment will be processed.
Your order may not go through if your billing address does not match what is on file with your bank. Merchants want to make sure they are deterring identity thieves who may be trying to buy items with stolen credit or debit cards.
In almost all cases, your billing address does matter when shopping online. It must match the card you are using to pay.
Merchants wanting to curb fraud want to make sure you are authorized to use the debit or credit card. Some may allow the transactions through and review them in the back end; other times you will just have to re-enter the correct information or start your order over again.
Most of the time, it doesn’t matter if the billing and shipping addresses don’t match.
Some merchants do not allow customers to use P.O. boxes as billing addresses, while others just need information entered differently. Banks are required under federal regulations to verify as much information as possible, including physical addresses.
Table of Contents
What Role Does a Billing Address Play
A billing address lets your bank know where you would like to receive statements and other updates. It also tells merchants that you are an authorized user of the credit or debit card you are presenting for payment.
Merchants will often ask you to enter your ZIP code when you check out — especially if you are in person at a store.
This will help you with extra protection for your purchases. If your card ever got stolen, that person will have a hard time using your credit card because they don’t know your billing zip code.
Does the Billing Address Have to Match the Credit Card?
The billing address needs to match so you can prove you are supposed to be using that card. Target says on its website that spouses or other people with “verbal authorization” will not be able to buy anything because they can’t provide legal proof.
If you need to check or change your billing address:
- Access your bank’s online portal and enter the correct address
- Call the bank and ask them to change it
- To find your billing address, look at the addresses under your profile or settings
- Make sure you check every card and account you have at each bank. Changing an address on one may not affect the rest right away.
- Remember, your billing address and credit card information need to have the same apartment or suite numbers as well. I’ve had transactions rejected at various merchants for not checking this.
Does the Billing Address Have to Match the Shipping Address?
In most cases, it does not have to match. Merchants will often process an order with mismatched billing and shipping addresses without a hitch. People often have good reasons for the addresses not matching. They may own two homes or want to buy a gift for someone at a different address.
I have done this many times on Amazon when I wanted to send a gift to my daughter who does not live near me. It has never once been a problem. I have even done this on other sites like Best Buy and Barnes & Noble.
Some merchants will see mismatched addresses and flag them as potential fraud. A company focused on customer billing disputes, sellers do this to protect themselves from identity thieves who may be trying to buy an item with stolen credit card information.
One way they can try and net crooks without ruining customer relationships is with the Address Verification System.
This matches the billing address you provide with what the bank has on file. Chargeback explains that the bank uses AVS to check the numbers in an address.
For example, it will compare the house number and ZIP code. Then they will send a reason code back to the merchant based on the accuracy of the match.
Verification Will Check More Than Just Zip Code
The Address Verification System compares all the numbers in your address. This includes your house number and apartment or suite and your ZIP code.
While not all merchants use AVS, you should know that it is one of the most common fraud-detection tools in use for virtual checkouts today. Based on the code the AVS returns to the merchant, they can decide to decline or approve the transaction or make an exception.
Investopedia says merchants should use this system “in conjunction with other fraud detection methods,” These include verifying the CVV — those three numbers on the back of your card — and authenticating a customer’s device.
Merchants do all this to try and thwart what is known as “card not present” fraud. Investopedia says thieves try to buy items online by just using the card number.
The CVV is used to validate the card someone is supposedly holding.
Can You Use a P.O. Box as a Billing Address?
Banks do not usually accept P.O. boxes for billing addresses because they want to verify that their cardholder has a physical address. Merchants may have different procedures.
People can ask their bank to send statements and other mail to a P.O. box. However, under federal regulations, banks must maintain policies to identify their customers and validate physical addresses.
This can be tough for people who live in isolated areas or historic districts without mailboxes. In these cases, they can sign up for a P.O. box at a private company such as UPS because they provide a street address.
Some online merchants will accept P.O. boxes as billing addresses or if it was entered in a certain way, because they don’t want to pay extra for security programs like AVS.
For example, Republic Wireless says on its website that it accepts the boxes for payment. Customers need only update their information.
Some sites recommend writing the P.O. box number as the street number and “P.O. Box” as the street name.
If You Enter the Wrong Billing Address
The merchant will likely display an error message directing you to re-enter the information. Once you correct the error, assuming the other information is good, you should be fine.
If you enter the wrong billing address while trying to order something online, you will either need to re-enter the correct information or contact customer service.
Sometimes, merchants will allow the transaction through but email you later that it failed to process. Other merchants might just cancel the order altogether and make you start all over.
First Quarter Finance says what happens may largely depend on which security procedures a merchant is using.
“The most secure checks are also the priciest services, so if a retailer doesn’t want to pay for a safer certification program like AVS, it may not notice the billing address error. In this case, you’d merely receive the item you ordered.”
Businesses must weigh the benefits of stamping out fraud against people who make a simple typo and stop buying products from them.
Merchants may accept the order but forward it to their fraud department for a manual review. This happens behind the scenes so in most cases the customer never notices, although there may be a delay.