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How to Use Billing Descriptors to Decrease Chargebacks

When consumers open their credit card statement at the end of a billing month, many of them scan the descriptions of the charges to ensure everything they are paying for is something they truly bought.

For ecommerce merchants, the descriptor they use to identify the charge is of paramount importance because a consumer can’t always connect a product he received in the mail with the line item in his credit credit card statement. This confusion can lead to the initiation of a chargeback. In many cases, the consumer indeed made the purchase, but sincerely does not recognize the charge on the bill. Hence, a carefully chosen billing descriptor could be a merchant’s solution to reduce such chargebacks.

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What is a Billing Descriptor?

A billing descriptor is the description of a transaction that appears on a customer’s credit card statement. It is meant to help customers positively identify their card transactions by including information about the date of each payment and the company from which it was purchased. The length of a Billing Descriptor is usually limited to between 20 to 25 characters in length plus the merchant’s phone number at the end. It is generally recommended to be as descriptive as possible and take advantage of the full length allowance to provide customers with a more detailed reminder of the purchased.   

There are two types of billing descriptors: Default Billing Descriptor (static) and Dynamic Descriptor

  1. 1. The Default Billing Descriptor (static) is the name for a merchant’s authorised processing company that appears the same for every transaction.  This is commonly used when a company offers a single product or service to customers.

For example, Dan and Joe’s Restaurant Ltd. 123-456-7890

  1. 2. The Dynamic Descriptor allows modification of the description field in a customer’s statement and can be customised according to the product or service purchased. They can be configured on a per transaction level, making it possible for each transaction to have a different description. Dynamic Descriptors give merchants the opportunity to provide additional detail and are usually used by businesses offering multiple products or services.

For example, if a customer purchases bike tyres from Dan and Joe’s Bike Shop, and another customer purchases bike chains, the billing descriptor would appear differently on their respective statements:

DNJ*BIKE TIRES 123-456-7890 and DNJ*BIKE CHAINS 123-456-7890

Why the Billing Descriptor is Important for Chargebacks.

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Receiving Visa’s Chargeback Reason Code 75 is never good news for merchants.  MasterCard’s corresponding reason code is 4863. Both are codes for “Cardholder Does Not Recognize Transaction,” which means that a customer either could not identify the transaction on his or her statement or thought it was incorrect. When a customer calls his or her issuing bank to dispute or report the transaction in question, a chargeback is triggered.

Once a chargeback is initiated, a merchant must go through the hassle of providing documentation or information to assist the customer in recognising the transaction and prove the validity of the purchase. Examples of such documents include shipping invoices, delivery receipts and sales receipts.

Providing a clear and comprehensible billing descriptor can help customers recognise transactions on their statements more easily, thus reducing the number of chargebacks and allowing merchants to save time and maximise profits.

Best Practise

Here are some best practises for optimising your billing descriptor

  1. 1. Use your ‘Trading As’ (T/A) name (may differ from your legal company name)

Businesses commonly operate under a legal name as well as a T/A name. If these names differ, you should always include your T/A name in the billing descriptor, since it is more likely to be known and recognised by your customers.

  1. 2. Simple descriptors are the best

Keep your descriptor simple and to the point to avoid confusion from customers.

  1. 3. Include a phone number for customer support

This can be added in the second part of the billing descriptor, and is not included in the 20-25 character limit.  If a customer is presented with your contact information, they may opt to call your business for any concerns regarding the product instead of reporting the transaction to their issuing bank for a chargeback. This may be added to the City Field.

  1. 4. Ensure exposure of your billing descriptor

Familiarise your customers with the name of your business by ensuring your T.A. name is visible throughout your website. This will help customers recall your business more easily when they view their credit card statement.  In the case where a customer copy and pastes the descriptor into an online search engine, your business should ideally be on the first page of the search results.

  1. 5. Send out test transactions

This is so you can ensure the formatting of your billing descriptor is easily readable and understandable before the purchase by your first customer.

To Learn More

To get support on how to start using with appropriate billing descriptors (static or dynamic), please contact :

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Transparent Merchant Services, What is a billing descriptor?, 2011, Reduce chargebacks: Optimize your billing descriptor,
Paylosophy, 2014, What is a credit card descriptor?  
Burlington Bank Card, 2007, Visa Chargeback Reason Code 75: Cardholder Does Not Recognize
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