Reduce Credit Card Chargebacks

When a customer pays by credit card, the name appearing on the customer’s bank statement is called a billing descriptor. Ideally, that descriptor clearly identifies the business where the purchase was made.

Unfortunately, that is not always what happens.

The descriptor may show an abbreviated legal name, an old business name, or wording that bears little resemblance to the name customers recognize. When customers review their transactions and cannot identify a charge, they may assume it is fraudulent and dispute it.

That misunderstanding can result in an avoidable chargeback.

The easiest way to see what customers see is to run a one-cent transaction through your credit card terminal using your own card. Then check the pending transactions in your card account.

Look closely at the name associated with the charge. Would an ordinary customer immediately recognize it as your business?

Because pending and completed transactions can occasionally display differently, check the descriptor again after the transaction posts.

If the descriptor does not clearly identify your business, contact your payment processor and ask to have it changed. The processor will generally submit a support ticket requesting the update.

Billing descriptors typically allow approximately 24 characters, although the exact limit can vary. This creates a problem for businesses with longer names.

Customer-service representatives may not always mention the character limit. If the descriptor you request is too long, the ticket may be rejected and require another submission.

You may need to abbreviate your business name, but clarity matters more than fitting the complete legal name. Choose wording that customers will immediately associate with the business where they made the purchase.

For example, an abbreviated but recognizable business name is better than a complete legal entity name customers have never seen.

Descriptor updates will typically take less than a week. Your processor may not notify you when the change has been made, so do not assume the work is complete simply because a ticket was submitted.

Wait approximately one week, run another small test transaction, and check your statement again. If the new descriptor appears clearly, the update was successful. If it has not changed, follow up with the processor and reference the original ticket.

It is a small administrative detail, but it can prevent confusion, reduce unnecessary disputes, and make it easier for customers to recognize legitimate transactions. 

Northsolv helps businesses improve cash flow, control costs, and operate more effectively.

Learn more at northsolv.com