Descriptor

A descriptor is a description on a credit card statement that helps identify the merchant who ran a transaction.
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What Is A Descriptor?

A descriptor is a description on a credit card statement that helps identify the merchant who ran a transaction.

Descriptor Explained

Descriptors appear on cardholders’ statements. They’re typically 20 to 25 characters long, although some statements allow more characters. They display information such as the merchant’s name, phone number, and location. They can also include information about the type of product or service the merchant sells.

It’s a smart idea for any business owner to know what descriptor appears on their customers’ statements. This is especially true if you have trouble with chargebacks.

With online banking, it’s easier than ever for a customer to dispute a transaction. Many card issuers’ websites give customers the option to dispute a transaction directly from their online statement.

When a customer looks at their statement and doesn’t recognize a charge, they look for more information. By providing that information in the descriptor, merchants make it less likely that the customer will initiate a dispute.

The best information to include in your descriptor includes the following:

  • Business name that is most recognizable to your customers
  • Phone number
  • Location (especially for brick-and-mortar stores)
  • Website and/or email address

Most merchants should include their DBA (Doing Business As) name. This is the name your customers know you as, rather than a legal name, for example.

The one exception is if your products or services are of a sensitive nature. In this case, your customers might prefer that your business name isn’t displayed clearly on their credit card statement.

What you can do instead is let customers know what they will see on their statement. For example, on your website, checkout page, and email communications, include the phrase: “Your billing statement will show Alternative Merchant Name.”

Some credit card processors allow merchants to have a dynamic descriptor. This means that you can choose the best descriptor for a transaction based on the particular product or service. The DBA name is still included, but the other information varies. Check with your processor to see if they offer this feature.

Descriptor Examples

Jonathan has a small online business selling clothing and shoes through his website. The legal name of his company is Jonathan Lewis LLC. But his loyal customers know his online shop as Johnny’s Threads, based in Chicago.

When Jonathan first signed up for credit card processing, he didn't realize the importance of his billing descriptor. He entered Jonathan Lewis LLC without giving it a second thought

Soon, one chargeback comes in. The customer didn’t recognize the charge on her credit card statement because the name Jonathan Lewis LLC wasn’t familiar to her.

When Jonathan responds to the chargeback with an itemized invoice and proof of delivery, the customer cancels her dispute. But Jonathan still has to pay a chargeback fee and spend time putting together documentation.

Before long, Jonathan receives more chargebacks, all due to customers not recognizing transactions. He realizes that there’s a problem.

Jonathan contacts his credit card processor. They walk him through the steps to update his descriptor.

Jonathan’s new descriptor is Johnnys Threads 800-5554675 Chicago JohnnysThreads.com.

Because his customers now recognize where their charges are coming from, Jonathan’s dispute rate drops.

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