DIRECTADE BUSINESS RULES SERIES: BILLING DESCRIPTORS

How effective is your billing descriptor?

How effective is your billing descriptor?

By Jason Solano

The Directade Business Rules Series is taking a look at the practices, processes, and settings that help to power Direct-To-Consumer and Subscription businesses. Each week we’ll cover new questions related to Business Rules best practices that can help companies optimize their sales funnel and increase customer lifetime value.

This week’s topic is on how credit card transactions appear to your customer and what impact that could have to your business.

Are you effectively using your credit card billing descriptor field?

When your company charges a customer, the billing descriptor is the text displayed next to the charge. Here’s the thing: this is an incredibly important marketing touchpoint and it should not be overlooked.

What are the repercussions or a bad descriptor?  Aside from the negative brand association from pure customer frustration, you can expect more customer service calls, earlier cancellations, and an increase in chargebacks.

So how much space do you have? It really depends on your credit card processor and the customer’s bank. You can expect to have at least 18 and up to 25 characters of text for your descriptor. Our advice is to structure your descriptions at 18 characters to avoid potential cut-offs that might confuse your customer and their partners/spouses.

Following the descriptor, it is most common for a company phone number to be listed, followed by the state where the company is headquartered. We recommend including a toll-free number for the benefit of your customer, ideally one dedicated for billing statements. Maintaining this separate number will help you understand how many calls are being driven from billing versus other customer service reasons.

Whenever possible, stay away from internal abbreviations and jargon in your billing descriptor. While it may make sense to someone in your operations or accounting team, it could confuse your customer. If you have a longer brand name, and an abbreviation is critical, go with the abbreviation and use the rest of the space for keywords that clearly describe your product. Bring in your marketing and customer experience teams to advise on what makes the most contextual sense from the perspective of your customer. Create a descriptor that makes sense, then make sure you can have it show up first in Google search results.

As an example, let’s consider the fictional company ‘Sepulveda Boulevard Pet Food & Supplies’. With the wrong descriptor, the credit card statement might look like this:

SEPULVEDA BOULEVARD 1-800-123-4567 CA $60
Or
SBPF&S  1-800-123-4567 CA $60

Both of the above descriptors lack crucial clarity, and would certainly cause many customers to wonder about the charge. If the customer were to Google either description it’s likely they wouldn’t easily find the business, so they’d have to call customer service. With enough frustration, they might dispute the charge.

Instead, we recommend a default descriptor such as the following:

SEPULVEDA PET FOOD  1-800-123-4567 CA $60

Depending on the variety of products and services offered by your company, you can use a dynamic descriptor to better describe what is being sold to your customer. You’ll need to work with your credit card processor to clearly understand their mapping capabilities, and try to stay as close as possible to 18 characters. You’ll also want to know if your processor can generate your dynamic descriptor during authorization, settlement, or both.

In our example, the Sepulveda pet supply company might offer pet toys, grooming, and adoption services, and their dynamic descriptors could be listed as:

SEPULVEDA PET TOYS  1-800-123-4567 CA $60
SEPULVEDA PETGROOM  1-800-123-4567 CA $60
SEPULVEDA PETADOPT  1-800-123-4567 CA $60

If you offer installment billing, and you have the space, you should considering using a dynamic billing descriptor to call out each payment. Listing the charges could help you reduce confusion and additional calls/talk time at customer service. In our example, if our pet company offered many products or bundles that were charged in three monthly payments, they might consider a descriptor such as this:

Month 1: SEPULVEDA PET 1of3  1-800-123-4567 CA $20
Month 2: SEPULVEDA PET 2of3  1-800-123-4567 CA $20
Month 3: SEPULVEDA PET 3of3  1-800-123-4567 CA $20

Some companies go further by including billing-specific URLs in their descriptors. The custom landing page then goes on to explain the charge, the product, and what the customer can do if they have a question or issue. The CEO of Basecamp wrote about his company’s success with this strategy that reportedly reduced chargebacks by 30%.

Billing descriptors are an often overlooked marketing touchpoint that can occur as much as, if not more than, actual product fulfillment. You can improve your customer experience and minimize many costs by following our advice on establishing an effective billing descriptor for your brand.

Next time: 3 Tough Credit Card Processing Questions