What Is a Billing/Statement Descriptor & Why Making the Right One is Crucial

As someone who has sold online, I made sure to create the best statement descriptors so customers could recognize their purchases. The last thing I wanted was a chargeback because a buyer couldn’t identify my business on their statement.

Knowing how to write an effective billing descriptor is essential. I’ll explain what they are, the types, and best practices.

Before writing one, let’s understand what they are.

Key Takeaways

• 45% of disputes arise from unrecognized charges on statements.
• 76% of customers contact banks before businesses to resolve charge issues.
• Over 70% of customers find chargebacks easier than direct refunds.
• Descriptors should be 5 – 22 characters, ideally recognizable.
• Adding a support number to descriptors can reduce chargebacks.

Another way to prevent chargebacks is by using chargeback alerts. These alerts can be hard to access since they often require coordination with multiple providers. We simplify access to these alerts.

Learn how they can help.

What Is a Billing Descriptor?

Billing, statement, and account descriptors are all the same. They show your business name on customer credit card statements. It helps customers identify transactions and who they paid. This text appears alongside other charges during billing periods.

As a seller, you’ll set up descriptors when creating a merchant account.

Each account has its own descriptor. For example, if one merchant ID (MID) has the descriptor “TheosCalendars Bend OR,” another might use “BobsBurgers Clearwater FL.” Unique descriptors reduce confusion by linking services to specific locations.

Descriptors appear differently on customer statements, depending on:

• Card brand
• Card-present vs. card-not-present
• Card type (debit vs. credit)

Customers may also use digital wallets like Apple Wallet or Google Pay. Or they may use virtual privacy wallets. These services add terms to your descriptor. For example, Google Pay lists “SP” before your business name, followed by your website.

This insight comes from my own purchase history.

Note: A merchant account is a type of bank account allowing businesses to accept credit and debit card payments. A merchant ID (MID) is a unique identifier used to process transactions and identify the merchant on payment statements.

Summary: Helps the customer identify a purchase.

What’s The Purpose of a Statement Descriptor?

The purpose of a billing descriptor is to identify a transaction. It tells customers, “this is what you bought.”

Descriptors are also crucial for receiving chargeback alerts from issuers.

To get chargeback alerts, you must provide a descriptor. Providers use descriptors to identify and match alerts to specific purchases. Without them, they can’t notify merchants.

Don’t know what a chargeback alert is? You should. Here’s a guide that’ll tell you everything.

Speaking of chargebacks…

Summary: Identify a transaction and tells chargeback management services who they’ll send alerts to.

Importance of Billing Descriptors for Chargebacks

Billing descriptors are critical for chargebacks. When customers can’t recognize a purchase, they may assume fraud. This assumption explains why 45% of people file disputes over unrecognized charges.

Why don’t customers reach out to the business first?

It’s easier to contact their bank. That’s why 76% of customers approach banks before merchants [1]. Once they do, a dispute is inevitable.

During a dispute, the bank processes a chargeback. From there, the shopper and seller provide evidence, and responses follow. Here’s a guide that outlines the chargeback process.

For example, if I saw “Toms Portland, OR” as a descriptor, I might think my card was stolen. How would I know what that purchase was for?

With no clear information, I’d reach out to my bank to dispute the charge.

Now we know why it’s important to have a statement descriptor. What types of descriptors are there?

Summary: Customers might not recognize a purchase because of an unclear descriptor and suspect fraud.

Types of Billing Descriptors

Billing descriptors fall into these categories:

• Dynamic descriptor: A customized description per transaction.
• Static descriptor: A consistent name or identifier for all transactions.
• Soft descriptor: A temporary description visible before final processing.
• Hard descriptor: The finalized name on a statement after processing.

Soft and hard descriptors differ from static and dynamic descriptors. “Soft” describes a pending transaction, while “hard” is the final name.

Whether that final name is dynamic or static depends on the business choice.

Let’s first look at the differences between static and dynamic descriptors.

1. Dynamic Descriptors

Dynamic descriptors allow merchants to include transaction details beyond a business name.

To set these up, you’ll need an Application Programming Interface (API), support from your payment gateway, and possibly a developer.

Here’s when you’d use this descriptor type:

1. Transaction-Specific Details

An online marketplace with various vendors might use descriptors like “Marketplace - Vendor A Shoes” or “Marketplace - Vendor B Electronics” for clear identification.

2. Selling Multiple Products

A company that sells software and hardware could list “Tech Solutions - Software” or “Tech Solutions - Hardware” to clarify product type.

3. Varied Purchase Types

A fitness center offering memberships, personal training, and classes could specify “Fitness Center - Membership” or “Fitness Center - Classes” in its descriptors.

Additional information, such as purchase date, item category, or order ID, can also improve clarity.

Skip dynamic descriptors if they don’t fit your business needs.

2. Static Descriptors

A static billing descriptor is a fixed text that appears on credit card statements. It shows the same business name for all transactions. It works best for companies with a single product or service, helping customers easily identify charges.

If you’re running a chargeback alert service and sell a single product, you might use a static descriptor like “Chargeback.io Alerts 777-777-7777.”

This would appear on the customer’s statement once the transaction is approved.

But what will it look like before it’s finalized?

3. Soft Descriptors

A soft descriptor (pending descriptor) is a temporary charge description that appears during payment authorization. It shows in the cardholder's online statement until settlement, when a permanent descriptor replaces it.

“Payment authorization” means the money has been designated, but the transaction isn’t done.

Think of it as a placeholder. For instance, if you buy curtains online, you’d see:

PENDING Don’s Curtains Dark Blu

There’s not much else to cover in this point.

4. Hard Descriptors

A hard descriptor is the permanent text that appears on credit card statements after transaction settlement. It shows your business name and final charge amount. It replaces the temporary soft descriptor.

This is your static or dynamic descriptor.

You may wonder if a payment reference number is the same as a billing descriptor.

Let’s clarify.

Billing Descriptor vs. Payment Reference Number

Billing descriptors show merchant names on credit card statements. Payment reference numbers identify specific transactions. Descriptors help customers recognize charges, while reference numbers track individual payments.

For example, a customer viewing their payment reference number wouldn’t know what they bought or from whom. Instead, they’d use this number for bank inquiries or transaction issues.

Before moving on, let’s learn what a payment reference number is.

What is a Payment Reference Number?

A payment reference number is a unique code that identifies specific financial transactions. Banks create these alphanumeric identifiers to track and process payments, transfers, and debits.

We already understand the basics. Let’s proceed to optimizing your statement descriptor.

First, we need to locate it.

Summary: Helps banks identify specific purchases.

Where Do I Find My Billing Descriptor?

In the sections below, I’ll explain where to find and edit billing descriptors on major platforms.

Let’s begin with Stripe.

1. Stripe

To find and edit your statement descriptor on Stripe:

1. Log into your Stripe dashboard.
2. Go to Settings, then Business Settings.
3. Under Account details, find Public details.
4. Scroll down to Statement descriptor.

Here, you can edit the statement descriptor (e.g., your business name) and the shortened descriptor (which provides more charge-specific details).

I recommend updating both for better clarity.

For a visual guide, check out this video:

https://www.youtube.com/watch?embeds_referring_euri=https%3A%2F%2Fhelp.chargeback.io%2F&v=qYNyc6sBsYo&themeRefresh=1

Prefer reading? See this guide.

Let’s move onto Shopify.

2. Shopify

To find and edit your payments descriptor on Shopify Payments:

1. Log into your Shopify account.
2. Go to Settings (bottom-left corner on desktop).
3. In the left menu, select Payments (fifth option down).
4. Under Shopify Payment, click Manage.
5. Scroll to Customer billing statement (near the bottom).

Another video walkthrough is available:

https://www.youtube.com/watch?v=9SMqmAeia8o

Again, we have a dedicated guide written by a handsome author.

Lastly, here’s Ayden.

3. Ayden

To locate and edit a billing descriptor on Adyen:

1. Log into your merchant account.
2. Go to Settings, then Transaction description.
3. Select your store and check your settings.

While we don’t have a separate guide or video for this. Though, Adyen offers extensive documentation.

Congratulations. You’ve located your billing descriptors.

Let’s cover some best practices for writing them.

What Are the Rules for Billing Descriptors?

To create effective statement descriptors, follow these guidelines:

• Be clear and concise: Use a recognizable name that clearly represents your business.
  • Avoid abbreviations and acronyms when possible.
• Include the product or service: If you offer multiple products, add a brief service description.
• Use your business name: Use your “doing business as” (DBA) or “trading as” name.
• Stay within character limits: Keep descriptors between 5 and 22 characters.
• Follow prefix rules: If using a prefix and suffix, the prefix should be 2 to 10 characters.
• Include at least one letter: Ensure the descriptor includes at least one letter in the prefix or suffix.
• Avoid special characters: Exclude symbols like <, >, , ', ", *.
• Use relevant terms: Include common terms or your website URL to improve recognizability.

There’s some nuance here.

If your descriptor might get truncated, consider using abbreviations — but make sure they’re intuitive.

For instance, when renewing my passport abroad, I saw “OVERSEAS PPT RENEWAL.”

I could tell “PPT” meant passport, as I’d recently renewed mine overseas.

Adding a customer service phone number in the descriptor can also reduce chargebacks. When it’s easy to reach support, customers are less likely to go straight to their bank.

Otherwise, over 70% of customers find chargebacks more convenient than refunds.

But there’s a catch:

What if a customer calls outside business hours?

Since descriptor space is limited, you can’t list store hours. Consider having staff available during off-hours to address customer concerns promptly.

Be aware. Card platforms like Stripe often limit descriptors to 10 characters.

For example, here’s a visual from Stack Overflow showing how this truncation might look:

Source: Stack Overflow

Stripe also allows shortened descriptors for additional context. But many merchants I’ve seen skip this option and only include their website name.

Pay attention to chargebacks caused by unrecognized orders. If this is common, optimizing your billing descriptor should be part of your chargeback management strategy.

Otherwise, there’s nothing else to cover.

Conclusion

Billing descriptors are essential for helping customers identify their purchases, which reduces chargebacks. When customers can’t recognize a transaction, they may suspect fraud and contact their bank.

If you’ve optimized your statement descriptor and still face frequent chargebacks, improve your overall chargeback prevention strategy. Using chargeback alerts is one effective approach, and we make accessing these alerts easy.

Try them out.

Sources

• [1] Alarming chargeback statistics. MYMOID. 6/07/2018.