How Your Credit Card Descriptor Affects Chargebacks

If you aren’t sure what your descriptor is, or if you’ve decided you need to change it, how do you do so?

The specific instructions will vary, so I can’t provide every permutation here. The simple version is, you need to go to the settings of your payment processor or payment gateway account. Generally, there will be a Business Information section somewhere, and you’ll see an entry like “statement descriptor” or “billing descriptor” there.

Different gateways and different processors will handle the details in different ways. You might set up dynamic descriptors using wildcards or by assigning specific services or products to specific descriptors. Depending on how complex you want it to be and how much you want to use dynamic descriptors, it can take a while to configure all the possible options.

Don’t forget to run test transactions using different methods of payment to see how the descriptor appears. You want to make sure it looks right, after all!

How to Make Sure Your Billing Descriptor is Fighting Disputes

A bad billing descriptor is increasing chargebacks, while a good one decreases them. So, what makes a good one, and what should you do to ensure you’re causing as few information-based chargebacks as possible?

Use the Name Your Customers Recognize

I gave one example of this above; a restaurant group that owns several local joints. If someone buys dinner at The Food Dancer but their billing statement says they made a purchase at Century Catering, the disconnect can cause a chargeback. This is doubly true if the customer doesn’t even know about the restaurant group.

There are also a lot of cases where acquisitions might change names, and it can be tempting to streamline the merchant IDs involved. But, if someone shopped at Whole Foods and their billing statement showed an Amazon purchase, they might be keen to dispute it. Keeping the MID and the Whole Foods descriptor would be way better.

If you are a business with one registered name for your legal name and merchant ID, but another DBA ( Doing Business As) name, the DBA name is the one your customers are likely familiar with and the one they expect to see.

The key is to meet those expectations.

Set All Your Descriptors

I’m not just talking about the soft and hard descriptors here. Every merchant account you have has its own set of billing descriptors. Some merchants make multiple merchant accounts. You might have one for the low-risk part of your business and a different one for a higher-risk arm. You might have multiple sub-businesses and a unique MID for each.

Every unique MID has a unique set of credit card descriptors that need to be set. Moreover, since every billing descriptor needs to be unique, you can’t use the same descriptor for different MIDs, even if those MIDs are both part of the same business.

So, make sure to think about which MIDs are in use for what purposes, and set appropriate credit card descriptors for each of them.

Reconsider Including Location

One piece of optional information you can include in your billing descriptor is the location where the purchase was processed.

This is fine for a local brand. If a person walks into a store and makes a purchase, knowing that they were in that location can be important. If a person sees a location they don’t recognize and have never been to, that’s a pretty good sign of their information being used where it shouldn’t be. In fact, many banks and credit cards will auto-flag those disconnects as fraud because it’s such a common tell.

What about an online business? As the owner of FightDisputes.com, I’m based out of California. If someone in Missouri signs up for my services, and they see a credit card descriptor saying they made a purchase in California, what are they going to think?

That’s why online-only businesses should consider not including the location information. It’s fine for a company like Netflix, which specifies Irving CA in their descriptor, because everyone knows who Netflix is. For a smaller and less recognized online business, though, it can do more harm than good.

Include a Means of Contact

If you’re concerned that people won’t know who you are and will file a dispute, consider including contact information in the credit card descriptor.

The two main options you have are your phone number and your website address. Phone number is good if you want immediate, proactive customer service to handle questions. But, it can be a little less effective if you don’t have around-the-clock customer service to answer the phone, and phone numbers aren’t immediately recognizable the way names and websites are.

A web address can be good as an option, especially if the customer likely ordered through the website. That way, they can visit the site, see who you are, and if necessary, reach out to customer service there.

Just make sure that the web address is complete and relevant. If your brand website and your store website are different, make sure to use the right one. And, make sure it doesn’t cut off before the extension. You don’t want it to look like you’re a .co when you’re a .com, or to have people assume you’re a .com when you’re a .org, or anything similar.

Consider Dynamic Descriptors

Though not helpful for everyone, dynamic descriptors can be a great way to add more clarity and detail. They work best for companies that have a few distinct products, where the billing descriptor can reflect which one the customer ordered. For example, if you were to hire me for my managed replies service instead of my dispute alerts, knowing which one you were billed for can be handy.

Other brands might specify their department (Costco vs Costco Gas, for example). When there are clear divisions that are worth identifying, using a dynamic descriptor rather than separate merchant IDs an be a great way to do it.

In the end, this one simple change can do a lot to cut off chargebacks before they happen. More importantly, it cuts out a lot of the kinds of chargebacks that aren’t detected by other anti-fraud methods, so you’re sure to reduce your chargeback rate with a good credit card descriptor.