What is a Billing Descriptor?
Whenever a cardholder makes a purchase, the transaction is recorded by the issuing bank on the cardholder’s statement. The billing descriptor, sometimes referred to as a merchant descriptor, is the name a cardholder sees on his or her billing statement to identify the merchant and transaction.
The billing descriptor is typically between 20-25 characters in length. The merchant’s business name should always appear in the descriptor. Other common elements include the merchant’s location and phone number.
There are three primary forms of billing descriptors of which merchants should be aware:
Soft Descriptor: This is the temporary descriptor that appears on the cardholder’s statement immediately after a transaction. It serves as a placeholder for a pending transaction, and is replaced by a permanent billing descriptor after the transaction settles.
Hard Descriptor: The hard descriptor is the permanent billing descriptor that appears on the cardholder’s statement after settling. The hard descriptor will also include the total cost of the final transaction.
Dynamic Descriptor: A dynamic descriptor is a custom descriptor, allowing merchants to configure a unique description for each transaction. Some processors only offer this on soft descriptors, while others have dynamic hard descriptors, too.
Why Are Billing Descriptors Important?
Billing descriptors predate eCommerce by decades. Conventions like including an address in the descriptor don’t translate well to the online marketplace. In fact, an address for a card-not-present purchase could actually serve to confuse a buyer, thus making a chargeback more likely.
A merchant’s billing descriptor impacts how customers identify transactions. If a buyer can’t identify a transaction based on the description provided, that person will be much more likely to suspect fraud, and to file a chargeback as a result. Remember: customers are always encouraged to err on the side of caution when it comes to online security and fraud.
Poorly-thought-out billing descriptors are among the most common chargeback-inducing merchant errors. And, according to raw dispute data, merchant error accounts for between 20-40% of all disputes.
How to Optimize Merchants’ Billing Descriptors
Optimizing a merchant’s billing descriptor is one of the easiest and most effective ways to prevent chargebacks. Here are a few simple tips:
#1. Simplify Billing Descriptors: Use simple, easy-to-understand language to avoid confusing customers. Your blurb should include your website domain name (e.g. “Amazon.com”). If using a dynamic descriptor, include a brief description of the goods or services.
#2. Use a Trade Name: Customers may not recognize a merchant’s legal name. Be sure that the name used in billing descriptors is the trade name by which most people will recognize the merchant.
#3. Include a Phone Number: Merchants should give customers the opportunity to call and inquire about a purchase before contacting the bank. It’s a good idea to include a phone number in the billing descriptor through which customers can access round-the-clock customer service.
#4. Be as Clear as Possible: Be sure that both the merchant’s trade name and website domain name are clearly visible in many places on the website. This way, customers will be more likely to recognize a purchase when it turns up on their statement.
#5. Test Transactions: A billing descriptor may display differently based on the brand of card used. Merchants should file test transactions with each card scheme to see how their soft descriptor and hard descriptor display on cardholders’ statements.
Last Update: March 14, 2019
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