Billing Descriptors: The leading Cause of Chargebacks

In today's fast-paced payments world, the little details of how transactions are processed can make a big difference for a business. One detail that often gets overlooked is the billing descriptor, even though it can really impact a company's profits and how it interacts with its customers.

Understanding Billing Descriptors

So, what exactly is a billing descriptor? Simply put, it's the line of text that shows up on a customer's bank or credit card statement that describes a specific transaction. It helps remind customers what they purchased and from whom. There are a few types of billing descriptors:

• Pending Descriptors: These are temporary and show up when a transaction is still being processed. They might show the payment processor's name, a short code, or a brief version of the company's name.
• Static Descriptors: These are the most common. They stay the same for every transaction from a certain business. Usually, they display the business's name and some contact information.
• Dynamic Descriptors: Unlike static descriptors, these can change based on each transaction. They can give more specific details, like the product purchased or which department in a business made the sale. This can help clear up any confusion customers might have.

Why Bad Billing Descriptors Cause Problems

If a billing descriptor isn't clear or recognizable, it can confuse customers. They might not remember the charge and think there's a mistake or someone is trying to scam them.

In a simple case, the customer might call the company to ask about the charge. But if this happens too often, it can waste a company's time and resources. Worse yet, the customer might dispute the charge with their bank, leading to a chargeback for the business.

Chargebacks aren't just a headache. They can cost a company money, both from the lost sale and from fees the bank might charge. Too many chargebacks can also harm a company's reputation with credit card companies, leading to higher fees or even losing the ability to take card payments.

How to Make a Good Billing Descriptor

Businesses can take steps to make sure their billing descriptors are clear:

• Be Recognizable: Make sure your business name is easy to spot. If you have a different legal name and trading name, use the one customers will know and remember.
• Give Contact Details: Add a phone number or web address so customers can easily get in touch if they have questions.
• Use Dynamic Descriptors: These give more details about a purchase and can remind customers exactly what they bought. Even if you sell a lot of different things, you can still add details like when the purchase was made or where.

Takeaway

Billing descriptors might seem like a small thing, but their intrinsic value cannot be overstated. Good billing descriptors can help customers avoid confusion and distrust and can help businesses avoid chargebacks and customer service issues. But if a business has issues with chargebacks, they might want to talk to an expert to find more ways to help. Thankfully, MidMetrics’ chargeback experts are here to help. Schedule a meeting with us today to discuss how we can help reduce and mitigate your chargebacks.