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Billing Descriptors

Billing Descriptor

Is Your Billing Descriptor Causing Chargebacks?

Obviously, any time you complete a transaction online, a record of that sale shows up on your customer’s billing statement. The billing descriptor refers to the name the customer sees in connection to the sale, identifying your business, and the total price of the goods or services purchased.

You might not pay much attention to how your billing descriptor appears…but your customers do. If you don’t bother to optimize your billing descriptor, it could end having a major impact on your bottom line.

What Goes Into a Billing Descriptor?

As mentioned above, the billing descriptor (also called a merchant descriptor in some instances) simply describes the way your name appears on your customers’ monthly statements.

The billing descriptor’s length is usually limited to between 20-25 characters that commonly include your business name and, in some cases, your address and phone number at the end. There are three key types of billing descriptor with which you need to be familiar:

Soft Descriptors

A soft descriptor appears on a customer’s online statement immediately after the customer’s bank authorizes a transaction. The soft descriptor is a temporary note that will be replaced once the transaction is finalized. Until then, the soft descriptor remains as a placeholder, noting a pending transaction in progress.

Hard Descriptors

The hard descriptor is the permanent merchant billing information that replaces the soft descriptor on the customer’s statement. Transaction settlement typically takes a few days, but once a transaction settles, the hard descriptor will appear on the buyer’s statement, along with a final price for the goods or services purchased.

Dynamic Descriptors

A dynamic descriptor is a customized billing descriptor you’re able to configure for each individual transaction via an API. For example, a dynamic descriptor can provide individual transaction details, such as listing the goods or services purchased. Some processors offer soft dynamic descriptors, while others provide both soft and hard dynamic descriptors.

Consult with your processor for more information about whether you can provide dynamic descriptors. But dynamic or fixed, you’ll absolutely want to ensure your descriptors are easy to understand and accurately reflect your business.

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Why Do Billing Descriptors Matter?

Billing descriptors don’t seem like a major concern in the grand scheme of things. If your billing descriptor doesn’t accurately reflect your business, though, it could spell trouble.

The billing descriptor predates online shopping. Concepts like adding a business address to your merchant descriptor made sense in a time when most transactions were conducted in a brick-and-mortar environment. However, it doesn’t translate to online shopping for obvious reasons.

Consider this scenario: A customer looks at her billing statement, trying to identify if all her charges seem correct. She sees a transaction from an unfamiliar store in another part of the country and, suspecting the charge to be a case of fraud, calls her bank to file a chargeback. Little does she realize the transaction was legitimate. The business in question had a standard billing descriptor, but it wasn’t properly adjusted to the particular circumstances of eCommerce.

Billing Descriptors

Issues like the one outlined above are common problems in the age of eCommerce. Poorly-planned descriptors make it hard for customers to identify legitimate transactions. So, when customers are trained to be wary of the threat of online fraud, they tend to err on the side of caution for their own protection.

Our internal dispute data at Chargebacks911® suggests that between 20-40% of all chargebacks are the result of merchant error. We’ve identified billing descriptors as one of the most common merchant errors that contribute to chargebacks.

Could your billing descriptor really account for 40% of all your chargebacks? Click here and find out.

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Tips to Optimize Your Billing Descriptor

Optimizing your billing descriptor is one of the easiest things you can do to prevent chargebacks. It’s also one of the most effective.

So, where do you start? Just follow these tips to minimize billing descriptor-related chargebacks:

  • Simplify Descriptors
    The idea is to give your buyers a clear and concise reminder of your transaction. Using an easy-to-understand format for your billing descriptor will help avoid confusion. Include your website domain name and, if using a dynamic descriptor, a very brief description of the item purchased.
  • Use Your Trade Name
    Many businesses have a legal name that goes on their important filings, and a separate name for use by customers. For example, Disney Consumer Products and Interactive Media (DCPI) is the legal name of The Disney Store. How many cardholders do you think know that? Customers may not recognize your legal name, so be sure to avoid it in billing descriptors.
  • Include Your Phone Numbe
    Your customer service line should be visible in your billing descriptor in case customers have questions about a charge. This line should be accessible 24 hours a day, with live service during as much of that time as possible. When live service is unavailable, your service line should direct customers to other service channels like email or social media. Add this to the city field to save characters; as an eCommerce business, you don’t need city information.
  • Avoid Confusion
    Use both your trade name and domain name regularly on your website, while still distinguishing the two. This will help remind customers of where the purchase originated.
  • Use Test Transactions
    Billing descriptors may display differently for different card schemes. Send out test transactions before you start operating to be sure your soft descriptor and final billing descriptor are optimized.

Having Trouble?

Are you experiencing issues preventing you from optimizing your billing descriptor? Do you suspect other merchant errors may be baked into your practices and policies?

Don’t let simple errors turn into costly chargebacks: contact Chargebacks911. Our 106-point compliance review process takes a magnifying glass to your business, diagnosing potential issues and identifying ways to save money, improve processes, and stop chargebacks before they happen.

Have other questions about your billing descriptor? Want to learn how much you can save with Chargebacks911? Click below and get started now.


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