Credit card-savvy customers and stopping chargebacks
The most at risk for chargebacks are subscription merchants. Cardholders often forget about recurring subscriptions then initiate chargebacks in hopes of regaining subscription fees.
Since credit card-savvy customers can dispute charges in real-time, merchants need to be proactive about preventing chargebacks. Still, some chargebacks are caused by the avoidable problem of unclear billing descriptors. As Verifi’s Senior Vice President Tony Wootton said in an interview by The Green Sheet, “I don’t even recognize 25 percent of [legitimate] charges when I quickly glance at a descriptor.”
A billing descriptor appears on a customer’s bank or credit card statement next to the amount of the charge. The typical billing billing descriptor has space for 25 letters and a phone number. A good billing descriptor quickly reminds a customer of the merchant’s name, the details of their purchase, and a phone number to contact the merchant about the charge. While the default billing descriptor may display the registered name of the company, the merchant’s name on the descriptor should be the DBA name used in advertising or an abbreviation for it. A customer is less likely to initiate a chargeback if he or she recognizes the charge on his statement and can easily contact the merchant through the phone number on the billing descriptor.
Sending banks clear billing descriptors is only one way merchants can stop chargebacks. All types of merchants can improve customer service, share blacklist databases, use card issuer’s security features, and when a purchase is heading toward a chargeback, setup chargeback alerts. Chargebacks alerts allow merchants to recover chargebacks with the cardholder directly.