Descriptors are the line items you see on your bank statement that describe each transaction. Merchants must navigate several factors to deliver concise descriptors that their customers will easily recognize. Unclear, complicated descriptors are a leading cause of chargebacks and headaches for merchants and cardholders alike. So it is super-important for merchants to understand how they work.
Here’s a little primer on descriptors, how they appear on statements and what options you have as a merchant in using them:
Soft to Hard
Descriptors have a life cycle. The “soft” stage descriptor appears on a statement while the transaction is pending. Once it is approved, the descriptor becomes “hard” as the permanent entry on a statement.
Static vs Dynamic
Static descriptors are the same for all transactions, typically carrying the company name. These are ideally suited for merchants selling a single product/service, or where the company is recognized above the merchandise, such as restaurants, airlines or subscription-based services.
Dynamic descriptors will vary for a merchant, depending on the transaction. They are ideal if your cardholder is likely to recognize the merchandise over the merchant, such as with resellers.
Generally speaking, you have 22-33 characters to convey your company, product and contact information; it’s like Twitter, on meth. Whether you’re using dynamic or static descriptors, prioritize your information as follows:
#1: Provide a Point of Contact
This is the most important information you can convey in your descriptors. You can never be sure a cardholder will recognize a transaction. So including a phone number or a web address is your best insurance policy. Having contact info in the descriptor will significantly increase the chances the cardholder will come to you with any issues.
#2: Recognition = Repetition
Whatever type of descriptor you go with, you have to make sure your customers will recognize it on their statements. The best way to do this is to prepare you customer. At the point of sale, tell the customer then and there how the transaction will appear on their statement. Send a confirmation email with the same information. The more you remind your customers, the more likely they will recognize the descriptor.
Unfortunately, like the game of telephone, the initial information can warp as it moves from merchant to customer. Merchant service providers and issuing banks all exert their influence over how your descriptors appear.
Consult with your merchant services representative
Your merchant services provider determines how that original set of characters is sent to the cardholder’s issuing bank. Whether you can even send dynamic descriptors, or if you can set the soft descriptor varies among processors. This is a key-part of merchant services, and you should have your provider spell it out for you.
Test your transactions on different issuers
Issuing banks have their own policies on how descriptors display. Some are very strict, requiring the first 22 characters to be a company name, and the remaining characters state a location. Some may limit your descriptors even further. Plus, there can be a significant difference between online statements and paper statements. The only way to know for sure how your descriptors appear on any statement is to test them out. You can’t test every single issuer out, but after testing a handful, you’ll gain valuable insights on how to optimize your descriptors.
Chances are, you’re still scratching your head about the world of transaction descriptors. We get it, and we’re here to help. ChargebackHelp assists its clients with this and other complicated aspects of payments processing. Give us a call: 1.800.975.9905