How can I reduce chargebacks?

28 Apr

Reduce Chargebacks

Why should I think about my descriptor? If you care about the health of your merchant account, you should be very concerned about your billing descriptor.

Descriptors are controlled by your merchant processor, and while they have lots to say about what your descriptor should look like, they rarely take into consideration the bigger picture of your customers and business. To make matters worse, descriptors are cryptic, old school, and subject to many limitations. But, getting your descriptor right can pay hefty dividends.

On the end of your billing descriptor sits a customer, a credit card statement, and lots of emotion when it comes to paying the bill. If your customer can quickly recognize a charge, and more importantly locate the customer contact information for that charge, there is a good chance they will call you before they call their bank. The moment your customer calls their bank you lose big.

The company Basecamp (formerly 37Signals), reduced their chargebacks by 30% by simply adding a clever direct customer service URL, of sorts, to their descriptor. More importantly, this URL addresses the question 37Signals knows the customer has at that very second — what is this charge? This makes the information more relevant than if the customer had called a generic customer service phone number.

I would recommend the following when setting up a billing descriptor:

  • Make every attempt at getting your phone number on the first line of your descriptor. While many banks allow for a second line of information, this rarely prints on credit card statements, and online systems usually require a “click to expand.”
  • If you have recurring payments, use a specific phone number and wording that explains the charge rather than pointing them to a general customer service phone number. This may require a separate merchant accounts for recurring and non-recurring charges.
  • Create your descriptor and phone number with the information that aligns with your website. This creates a link between the purchase and the cardholder.
  • In general, use wording that will allow your customer to easily identify the product and / or company that they have purchased from. The easier this process is the less likely the cardholder will dispute the charge.

We are passionate about billing descriptors due to the number of fraud and non-fraud alerts we manage through Ethoca and Verifi. We have found we can increase the number of alerts by up-to 20% by auditing our customer’s descriptors. During this audit we find all sorts of funk which leads to more effective descriptors for each of our customers.

If you would like a free descriptor audit send us a note to

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