What Does a Chargeback Analyst Do and Should You Hire One?

Imagine the perfect sale. The customer enjoys a smooth buying journey. Security is flawless. The payment process occurs rapidly and with zero problems. It is a win-win transaction: the customer receives a needed product while your business thrives.

Unfortunately, the perfect sale is not the reality. Fraudsters are always there waiting to enact their schemes. Products might not deliver on time. And system errors happen. As a result, customers turn to chargebacks. They have the right to protect themselves from mysterious or incorrect credit card charges. What should be a simple exchange now threatens your revenues.

Luckily, you can limit such problem transactions. And that's where a chargeback analyst comes in. A dispute analyst develops strategies that reduce problem transactions and fight false claims. They are the experts who help you better navigate the challenge of chargebacks.

But what exactly can a chargeback analyst do for your business? And are they worth hiring? Let's explore the job role to determine if you need an analyst on your team.      

The Chargeback Analyst: A Closer Look

A chargeback analyst is a finance professional who examines and manages the entire chargeback lifecycle. Chargebacks occur when a customer disagrees with a credit charge—your analyst will investigate each factor related to the dispute. Upon inspection, they will then develop a response strategy. Since a chargeback involves a loss of revenue, the role helps limit your financial risk.    

Day-to-Day Operations

More specifically, a chargeback analyst will take on the following daily tasks:

• Analysis: Chargebacks occur for a myriad of reasons. That includes legitimate grounds (fraud, product not received, merchant error) and false claims (buyer's remorse, forgetfulness, first-party credit card abuse). Your analyst will inspect if these claims are valid and determine which ones you should refute.  
• Risk assessments: Even if your analyst discovers a false claim, some disputes are not worth the labor. Why spend 10$ to win a claim over a 1$ item (and you might not even win)? Your analyst will examine factors such as product value, the reason code, or the fraud type to decide if representment (fighting a false claim) is the right option.  
• Evidence collection: The more proof collected, the greater the chance of winning a dispute. Card issuers want to see relevant evidence to show you engaged in an honest and fair transaction. To that end, your chargeback analyst will spend significant time each day preparing case files.
• Reporting: Chargebacks involve many industry players (banks, customers, payment processors, etc). Each interested party wants to know why the chargeback occurred and who won the case. Your chargeback analyst will generate these data points in a report. They will then liaise with each party and explain any case outcomes.
• Compliance: A digital marketplace supports a rapid pace of innovation. To stay ahead of the curve (and fraudsters) card brands and governments regularly update their rules. Your analyst will keep up-to-date on these expected changes. The specialist will then offer suggestions for maintaining compliance during all the rule updates.
• Education: Some disputes are complex (e.g. cases of accidental friendly fraud). Many businesses don't have the knowledge or know-how to manage these tricky customer cases. Your chargeback analyst can serve as a source of guidance in these moments. They will train other team members or departments about the ins and outs of chargeback management.  
• Strategy: Several types of chargebacks are avoidable. For example, a business can lessen the number of disputes due to merchant error by using up-to-date payment systems. Your analyst will engage in this type of merchant development. They will evaluate your business and locate areas in need of improvement.

Skills and Qualifications

With such a range of responsibilities, a good chargeback analyst role will possess the following key traits:

• Technical skills: Analysts should have high-level proficiency with chargeback management software, industry tools (e.g. a CRM), and data analysis. Most attain a Bachelor's degree in business or finance.
• Collaboration: A good analyst must be able to communicate. Chargebacks impact several departments, from Payments to Customer Service to Fraud & Security. Look for specialists who can work with diverse sets of people across several business levels.
• Fraud detection: An analyst should have ample knowledge of the fraud economy, as the chargeback system protects consumers from unauthorized card charges. Many specialists earn cybersecurity certifications like the Certified Fraud Examiner (CFE).
• Industry knowledge: A chargeback specialist will spearhead your response strategy. They should have ample knowledge about all payment processes, regulations (PCI-DSS), and credit card networks.  

The Impact of Chargeback Analysts

So is hiring a chargeback analyst a good idea? In short: yes. Chargebacks are a growing and costly problem. For every $100 in chargebacks, your true chargeback cost is $240 in wasted time, expensive fees, penalties, or additional losses of goods and services. Any dispute specialist that can directly limit these losses is a valuable resource.

But there is also the issue of scale. Your business may reach a point where you need a dedicated individual to address incoming chargebacks. As sales volumes grow, an expert who can spearhead more complex defenses is a natural evolution. A chargeback specialist can turn a hastily assembled chargeback team into a well-run defense.  

That type of high-level management offers a crucial benefit beyond just cost savings. More importantly, it helps turn a good portion of your transactions into friction-free sales (and get you as close as possible to the "perfect sale" mentioned above). Customers prefer to shop with merchants where they experience fewer problems that result in a dispute. And, when those problems do occur, your analyst resolves the dispute in a rapid and empathic manner. That customer experience results in improved customer satisfaction and a better business reputation.

Future Trends and Challenges

Still, a chargeback analyst is not a perfect solution. There are some drawbacks you should consider before hiring a specialist.

First, analysts operate manually. Yes, they will use many different digital tools, but at the end of the day, they can only provide human insight. A specialist cannot replace the automation offered by your current chargeback management tools. These manual limitations will only grow as more and more businesses adopt AI and other automated technology.

Second, an analyst is human. They will make mistakes. Especially with the ever-changing nature of the fraud economy. And when it comes to routine tasks, a specialist is quite fallible compared to digital tools.  

Third, a chargeback analyst is costly. It is a full-time job. Moreover, it is a specialized role that could command higher pay. You will need a significant upfront investment.  

These problems create a set of entry barriers. Many smaller companies cannot commit the initial resources demanded by a specialist. Others may have the necessary investment for a specialist but at the cost of all their other mitigation tools.

As a result, you need to weigh the resource requirements of an analyst against the possible drawbacks. A specialist is certainly an improvement from overburdened service reps. And yet, the effectiveness of an analyst will also be sorely limited if they have no supporting chargeback management resources to work with. The possible return on investment (ROI) will depend on how you balance risk and your available resources.      

Key Takeaways

In summary, a chargeback analyst plays an indispensable role in today’s digital landscape. But it is only one resource in a complete chargeback strategy. The analyst role truly brings a helpful ROI when combined with other available tools. For that reason a specialist is an ideal option as you scale (and as long as you have other accessible resources like management software in place first). At the start, mitigation tools offer the needed chargeback support with less cost, a perfect stopgap if you are not yet ready to hire an expert.

Case in point, consider Wordtune. They could not stay on top of their chargeback volume in-house. And with some analysis, they discovered that an outsourced chargeback analyst would provide a minimal ROI. Instead, they implemented Chargeflow’s automated chargeback solution. Within six months they earned a 4.3x dispute win rate improvement—with zero hours spent on chargeback mediation.

But if you are ready for more advanced chargeback management, then certainly reach out to a professional chargeback analyst. You can also consider investing in training for existing staff to enhance their skills in this critical area. Contact Chargeflow for more information on how we can support your chargeback teams.

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