E-commerce has gained immense importance in today’s rapidly evolving digital world. It is expected that the number of people who buy things online will increase to 2.77 billion by the year 2025. With this increasing trend in online shopping, accurate address verification is significant for online retailers across the globe. Businesses must get a high turnover and more conversions.
What is Address Verification?
Address verification is a security measure implemented in the e-commerce industry to assist in avoiding mistakenly entered addresses. When a potential customer enters their address, it compares the address against available online databases of valid addresses. The customers can then pick the relevant address they want to type.
There are various online databases to identify and validate addresses, including the United States Postal Service. However, other platforms like Google also help businesses with address verification.
Online Address Verification - What Every Business Must Know
Businesses in the e-commerce sector require customers to provide their addresses to ensure the swift delivery of orders. Many enterprises only run digitally without having any physical existence and provide products or services online. Therefore, address verification is crucial to ensure the optimal working of businesses. An address verification system (AVS) involves the mechanism to verify the information of customer addresses and age verification.
Verifying an address allows businesses to recognize the exact location of customers, eliminating the risk of incomplete addresses or errors. In addition, smooth AVS systems provide high conversions and client retention, eventually increasing the revenue generation of companies. An accurate address verification system also helps businesses identify scammers with false identities.
Significance of Accurate Verification of Address
A smooth address verification system assists online businesses in the following ways:
- Fraud Prevention
Address verification significantly helps businesses detect and prevent potential fraud. Many fraudsters attempt to use stolen or fake addresses to receive packages. Address verification assists companies to identify and verify the addresses before they ship the order.
- Enhanced User Experience
Online address verification is not only helpful for businesses, but it also ensures a smooth and efficient customer experience. E-commerce businesses can effectively reduce customer complaints by ensuring that the product package is delivered to the correct address timely.
- Less Shipping Errors
Incorrect or incomplete address information can cause shipment errors. By verifying an address with the online address database, e-commerce companies can reduce the chances of such errors, and costly mistakes of wrong shipments can be avoided.
Methodologies for Address Verification
Following are the methods businesses can utilize to identify and validate the customer address:
- Standardization of Address
Address standardization is a method that ensures that the address provided by the customer is in a proper format and possesses all the required components, including street name, street number, city, and zip code. However, customers providing incomplete or improper addresses can’t proceed further and can eventually not make further purchases. Since addresses may vary from country to country, address standardization is crucial to ensure smooth and accurate international shipments.
- Geocoding of Address
This address verification method utilizes geographic coordinates to identify and verify the address with a physical location. The address is verified on the map of known locations hence identifying the potential error in the provided data. The e-commerce sector providing same-day deliveries can effectively utilize this address geocoding system for making deliveries at the accurate location.
- Address Correction
This system utilizes databases containing valid addresses to verify the address. In case of an incomplete or incorrect address, the system itself suggests the correct address that matches the location of the customer. The e-commerce sector relies on automated shipment procedures to ensure package delivery at the right location.
Verifying an Address to Prevent Chargeback Scams
Scammers can commit chargeback fraud against e-commerce businesses. Chargeback is actually the amount returned to the cardholder in case of a disputed transaction. Moreover, payment refund is also known as chargeback fraud. Clients can try to hide their fraudulent intentions using a chargeback process to gain refunds. That’s why address verification plays a crucial role in deterring chargeback fraud and ensuring a seamless online shopping experience.
In a Nutshell
Concluding, all e-commerce businesses must identify and verify the addresses of their potential customer since address verification plays a crucial role in increasing conversions and revenue generation. Advanced software is of great help for such purposes mitigating the risk of chargeback fraud and ensuring AML/KYC compliance.
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