CVV Numbers…When Do Nonprofits Need to Ask for Them?

It’s as if we were asked to write an article on one of the most random—and possibly most boring—topics out there. But bear with us for just a second while we highlight CVV codes! Believe it or not, they affect your donations, so let’s take a quick peek at what nonprofits need to know.

What Are CVV Numbers?

Take a look at your credit or debit card. If it’s a Visa, Mastercard, or Discover card, you’ll see a three-digit number after your account number. If it’s an American Express, it’s a four-digit code.

These are Card Verification Value numbers, also known as Card Security Codes. When you make a purchase that isn’t face-to-face, the CVV number tells the merchant you’re in physical possession of the card. These are known as card-not-present transactions.

These numbers are unique and are sometimes generated by a more complex process to make the codes harder to guess. When that happens, it’s called a CVV2 number.

Why Are CVV Numbers Needed?

There is only one reason CVV codes exist: to protect against fraud. If your credit card number has been compromised and a fraudulent online purchase is made, they’ll get stopped short when asked for a CVV code they don’t have.

As a nonprofit, putting a CVV field on your online donation form helps you to know that a transaction is legitimate. This is of paramount importance for many reasons: fraud means your reputation can suffer, and your reputation is a priceless asset. Fraudulent charges will result in chargebacks, which are an expensive penalty.

Any measure to prevent nonprofit fraud is a good one.

Right?

Well, not so fast.

How Do CVV Requirements Affect Donations?

Let’s address the most obvious point first: Yes, CVV codes decrease fraud. That’s indisputable. But do they increase donations?

We would argue that they don’t. In fact, we would argue that CVV code requirements decrease donations.

One of the most basic tenets of nonprofit fundraising is this: Make it easy to give. Whether this is one-click giving, or mobile swiping, or limited donation form fields, you want to ask a prospective donor to put forth the least amount of effort required to donate.

We have all abandoned a form because it didn’t work, asked for random information we didn’t know off the top of our heads, made us select all the squares with traffic lights, or because it had so many fields that we gave up.

And we have all certainly stopped what we’re doing and run to pull out our credit card to get the CVV number to input in a form.

Or we were asked for the CVV number and thought “Eh, I’ll finish this later.” (Spoiler alert: no one finishes a donation later. You’ve lost them.)

So, two things are true.

• Asking for a CVV number decreases fraudulent donations.
• Asking for a CVV number decreases all donations.

And that’s a conundrum.

What’s a Nonprofit to Do?

We wouldn’t be much of a partner to nonprofits if we pointed out an unfixable problem, so don’t worry! There’s a solution.

First of all, CVV numbers are not required to process transactions. They are simply a tool to prevent fraud.

And, in some places and cases, it’s necessary and wise to risk donations for security. CharityEngine is a payment processor so we’re vigilant about fraud prevention. We don’t ask for CVV codes on our mail-in batch entry because it doesn’t make sense and could hurt conversion rates.

If it’s an online transaction, we give our clients the option of enabling CVV codes because it makes sense in that environment.

The lesson for nonprofits? Talk to your payment processor and customize what you’re asking for based on each channel. And think about your nonprofit, and your outreach, to see when CVV numbers are necessary.

If you are fundraising through multiple channels, and every single transaction in every single channel requires a CVV code, that is likely costing you donor conversions.

• When do you not need to ask for CVV numbers? When your nonprofit has a lot of gifts that are mailed in, or you’re using channels like face-to-face and phone outreach.
• When should you ask for CVV numbers? In situations where it’s difficult or impossible to trust that the donation is legitimate.

I Get CVV. But What’s AVS?

Here’s a little aside when we’re talking about effective anti-fraud tactics plus making it easy to give. AVS, or Address Verification Services, are another commonly used anti-fraud tactic.

AVS is a tool provided by credit card processors to merchants (nonprofits) that checks the billing address entered by the cardholder on your donation form against the address on file at the issuing bank. AVS increases declines but doesn’t tell the cardholder the transaction was declined because of an AVS mismatch.

As you can imagine, as declined transactions increase, so does abandonment. Donors aren’t going to try over and over to give you their money.

At CharityEngine, we don’t put barriers on donation forms. Look at yours! If you have CVV and AVS requirements in place, it’s quite likely you’re missing out on fundraising dollars.

It’s All About Being Educated

A nonprofit organization can contact its payment processor, review its different outreach methods, and inquire about eliminating the CVV or AVS requirements where it makes sense. If CharityEngine is your payment processor, you don’t need to contact us! We’re on it.

Once you understand the value and the risk of CVV requirements, you can ask intelligent questions to make sure you’re maximizing donations.

As always, if you want to know a little more about how CharityEngine partners with nonprofits, we’d love to chat with you.