A billing descriptor is the way your business name appears on your customer’s monthly credit card statement. This may seem simple, but there’s a lot to know about choosing your billing descriptor, and what you don’t know could cost you.

The job of a descriptor is to describe the product or service purchased by the customer to explain a charge or refund.  These descriptors are fixed in length; standard credit card transaction descriptor length is 22 characters max. It will generally include the DBA name of the merchant and the name of the product or service, separated by an asterisk. Some processors allow for the merchant’s telephone number or website as well.

The billing descriptor is important because it reminds a customer what the transaction was, and helps avoid groundless chargebacks. Therefore it is critical that these descriptors be as specific and informative as possible. For this reason, merchants have several options on how they may choose to appear on customer statements.

The basic information about your company can be presented in two ways:

For one reason or another, red flags are waving and your senses are telling you that the customer at your store counter is trying to purchase goods with a stolen credit card.

Maybe his name or signature are glaringly nothing like those on the ID. Maybe he’s quickly buying thousands of dollars’ worth of your most expensive items. Maybe he’s suspiciously trying to buy one hundred of the same kind of high-end camera.

Now what?

If a merchant processing bank fee or charge is ever returned for insufficient funds, the processing bank will become concerned. Their reasoning will be that if the merchant doesn’t have coverage for a small fee, how would they be able to recover from a large potential chargeback?

When a customer sees a charge from a merchant they don’t recognize, there is a good chance that they will dispute the card.

For some merchants, the name that appears on customer’s statements is not the name that they operate with (a DBA) or print on receipts. When this occurs, it is important to communicate with customers and let them know which name to expect on their statements.