If you are receiving charge backs on your credit card transactions it could be for a number of reasons. The billing descriptor (Name on Credit Card) is often the most overlooked portion of a transaction. Your business’s billing descriptor can increase or decrease how likely a customer is to dispute their credit card charge.

Now that the holidays are over and we’ve reached January, the season of post-holiday chargebacks has begun. By changing your credit card bank statement business name (known as the billing descriptor), you can avoid unnecessary chargebacks and raise your chances of winning against any disputes that arise.

How does changing your billing descriptor help you avoid chargebacks?

A billing descriptor is a short phrase that accompanies your business’ name on customers’ credit card statements. The descriptor is intended to remind customers who the company is and what they do.

If your billing descriptor is inaccurate, customers won’t immediately recognize who you are. If they don’t recognize the charge (e.g., if the transaction clears later than the purchase date; your store’s name isn’t included in the description) then they will call up their issuer and ask for a refund. That’s a chargeback for you simply because you didn’t pay attention to this little yet important detail.

If a customer tries to request a refund and your billing descriptor does reflect your business accurately, then you’ll have a better chance of succeeding in the dispute process. If the name doesn’t match up, then it’s a fair argument for banks to say, “well, how was the customer supposed to know it was you?”

The best way to fix this problem is to change your billing descriptor. This will make it immediately clear who you are and how to contact you in case there are any issues with your order.

Are there different types of billing descriptors?

There are two different billing descriptors: default (or static) and dynamic. Both have their pros and cons, so read further to find out which one fits your business best.

Default Billing Descriptors

The default descriptor is one that only displays your merchant name. It can also be assigned to you by your processor and displays a generic string of text like:

Web Dev by Joe Ltd 126-294-18233

When it’s assigned to you, it generally doesn’t appear very neatly or clearly on the cardholder’s statement which can lead to customer confusion. However, it’s required by law for a descriptor to be assigned if you don’t provide one. This is another reason why it’s incredibly important for you to manage this as soon as possible.

Dynamic Billing Descriptors

A dynamic billing descriptor, or soft descriptor, is a statement of the products and services sold to the customer that specifies what they’ve bought and from whom.

For example, if you have subscription-based pricing, then using dynamic billing descriptors is a good way to inform your customers about their subscriptions. You can include information like the number of months or days remaining on the subscription as well as the specific product/package they purchased. For example:

Amber’s Life Coaching Premium Package – 3 months remaining

This tells the customer what the store is, what they’re being charged for, and how much longer they have on the subscription. With this information, it would be tough for them to successfully dispute the charge because it’s so detailed. Of course, you should specify the information according to your business. You should also use the information you’ve obtained about your most common chargebacks to help avoid those, specifically, in the future.

ACH Billing Descriptors

There is no standard for billing descriptors for ACH transactions, unfortunately. However, some processors do provide this information. There will always be a descriptor present, no transaction comes up blank. But in terms of customization, it really depends on your provider. The easiest way to find answers if you’re concerned about ACH billing descriptors for your account is to contact your financial institution directly.

How do I change my business’ billing descriptor?

Each platform and processor have their own way of helping you manipulate the credit card billing statement description.

Contact Your Merchant Services Provider

If you have a merchant account, you have a couple of ways you can get this done. If you can, log into your merchant portal. There should be somewhere in your business profile or settings a section for the billing descriptor.

However, if that’s not possible then all you have to do is contact your merchant services provider. You can use email or phone to get in touch, though email might be better in this case since you’ll want to be specific with your descriptor and avoid any mistakes. Your provider will be able to tell you what’s possible in terms of default/dynamic descriptors. Then, all you have to do is provide the details and you’re good to go.

Change Your PayPal Billing Descriptor

If you use PayPal for your business – be careful, it’s not friendly to subscription-based merchants – then first you need to log in. Then in your Selling Tools area, there is a section for Billing Details. You can make the changes you want right here.

Change Your Stripe Billing Descriptor

You can set your static descriptor directly from the Stripe Dashboard. Stripe only offers dynamic descriptors for card charges, and you can follow the instructions from the link above to handle it.

We have noticed a lot of people seeing this for their customer’s bank statement descriptor in EU markets:

Stripe eea stel aggregation

This is something you’ll want to change ASAP if you’re doing business in the EU or selling to international customers. “Stripe eea stel aggregation” is the generic Stripe descriptor for the EU and many merchants are seeing this on their statements. It’s best not to wait for Stripe to make any changes and for you to go into your Stripe account and change it yourself. You should do this anyway to ensure the information is tailored to your liking, but this should act as even more of a push.

Change Your WooCommerce Billing Descriptor

With so many merchants using WooCommerce and WordPress for their e-commerce stores, we felt it was necessary to include this here as well. Simply go into the Checkout Settings area of your WordPress backend dashboard and you’ll find it.

What are the billing descriptor best practices?

Now that you know the importance of your business’ billing descriptor and how to change it, now we’ll share with you some of the best pieces of information to include.

Use a Separate Descriptor for Each Merchant Account

Each merchant account should have its own unique number (MID) so that your payment processor knows which merchant to charge for a transaction. You might think that this is unnecessary or restrictive, but there are actually quite a few reasons why every merchant should have their own billing descriptor.

It’s easier to manage. When you’re just starting out, you may be processing orders for one or two different merchants under the same account. This can make it confusing when trying to find specific charges in the reports. If you’re using a separate billing descriptor for each merchant, then this issue is eliminated.

It helps identify fraud. If someone is attempting to steal your customers information, they may be using a similar merchant name as one of your customers. A billing descriptor can help you identify which customer is actually at fault and help minimize losses from fraud.

You don’t want to pay for someone else’s mistakes. If one of your merchants has an issue with chargebacks or refunds, it doesn’t make sense for that to negatively impact your entire business. With separate billing descriptors, merchants cannot negatively impact each other as there are no common accounts between them.

Use Your T/A Name

While you might still be using your full legal name as your business name, it’s better to use your “trading as” name in your billing descriptor. This is the name that most customer’s will recognize you as, therefore it’s best to use it as your business’ billing descriptor to avoid chargebacks.

Include Contact Info

Don’t just include a company name in your billing descriptor. It’s important to include a phone number or email address in case your customers have questions about the charge. This makes it even easier for them to contact you instead of the issuing bank, which could be the difference between a refund and a chargeback.

Test the Billing Descriptor

Send out test transactions to familiarize yourself with how your online business appears on a customer’s credit card statement. From here, you can adjust as needed to make sure all of the information you want displayed actually shows up properly.

Update Your Billing Descriptor with DirectPayNet

As a high-risk merchant services provider, DirectPayNet allows you to update and adjust your business’ billing descriptor as needed to avoid chargebacks and increase visibility.

Our experience with payment processing companies and acquiring banks is your ticket to success, whether you’re selling subscriptions, pre-sale products, or other high-risk items. Our expert team will get you set up with an account that accepts Visa, MasterCard, American Express, ACH, and even more.

Don’t risk your business using 3rd-party processors or low-risk providers. Get in touch with us today to get a merchant account you can customize from billing descriptor to transactions rates.