Q: What is a billing descriptor?
A. A billing descriptor is how your companies purchased item appears on a customer’s credit card statement. A billing descriptor is usually 21-25 characters long. You may only use numbers and letters (no other symbols) and you can leave spaces. All letters are usually capitalized. I recommend using the name or your product/website and your customer service phone number.
Using the Wrong Billing Descriptor
Using a proper billing descriptor is the cheapest, easiest, and best way to reduce chargebacks. There are costly penalties for using the wrong billing descriptor. If customers do not recognize your charge, they will call their credit card company. They inquire about the charge or dispute it all together. Inquiry Fees are usually $10 or more. Yet, many choose a descriptor that confuses their customers. It's a mistake to list the legal name of your company or wholesale division if your customer won't immediately recognize it. A chargeback is a refund a merchant is forced to give its customer, as opposed to a refund that is voluntarily given by the merchant. Further more, if chargebacks exceed 1 percent, you could pay penalties or have your merchant account shut down.
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Curtis Kleinman is Chief Operating Officer at Swipe Payment Solutions.