Chargeback Analyst

January 27, 2022 | 10 min read

What Can a Good Chargeback Analyst Do for Your Business?

In a perfect world, consumers and merchants could exist in a retail space without the threat of fraud or fees. Goods and services would be fulfilled and delivered on time, every time. Purchases could go smoothly from start to finish.

Unfortunately, reality is far from the ideal.

Merchants always have to look for new, more innovative ways to meet consumer demand. At the same time, they have to protect their businesses from chargebacks, which present a growing threat to the online marketplace. This challenge calls for specialized knowledge.

In this article, we’ll discuss the role of a chargeback analyst. We’ll explore their purpose, how effective they can be at protecting revenue, and your options for implementing this role into your business.

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    What is a Chargeback Analyst?

    Chargeback Analyst

    [noun]/* chahrj • bak • an • ǝl • ǝst/

    A chargeback analyst is a payments industry professional who works with banks, processors, and card networks on behalf of a merchant. Their primary job is to analyze chargeback data to help resolve customer disputes and eliminate chargeback risk factors.

    A chargeback analyst plays an important role in managing long-term chargeback risk. They review and collate information pulled from past disputes to identify patterns or trends. They can then use that insight to develop a strategy that will prevent chargebacks from happening.

    Any problems that arise on a consistent basis need to be communicated to the relevant party. For example, the analyst may pinpoint vulnerabilities in your fraud management strategy, and provide a game plan for how to fix the problem. They may also make recommendations for changes to policies and procedures, helping to prevent recurring errors or missteps.

    That’s a basic overview. Now, let’s get more specific.

    The Role of a Chargeback Analyst

    A chargeback analyst is responsible for all the in-depth data and communication aspects of chargeback processing.

    Your analyst is a logical “buffer” for your business. They exist to help prevent disputes when possible, and fight back against any that occur due to chargeback abuse. Their day-to-day operations include:

    Monitoring Card Schemes & Regulations

    Let’s be real: this industry changes constantly. Keeping track of the various rules and regulations for each card network, bank, and law can be a full-time job all by itself. A chargeback analyst has to know these systems inside and out to help you maintain compliance with all industry rules. Perhaps one of the best reasons to employ an analyst is for this purpose, alone.

    Evaluating Disputes

    The chargeback analyst’s primary job is to investigate the validity of any claims or disputes that lead to chargebacks. This includes owning any chargeback alert and response systems, as well as any additional software that compiles transaction historical data. The analyst works closely with other operational departments to provide reports for incoming disputes, decide which claims are valid, and which claims to fight.

    Analyzing Risk

    There are lots of facets of your business that could influence your overall chargeback risk without your knowledge. A chargeback analyst can examine your business from end to end, diagnosing risk factors and determining how best to address these issues. Your analyst can help you optimize processes without exposing yourself to more disputes.

    Merchant Development

    A good chargeback analyst would be empowered to offer crucial insights and training that can guide your team toward better internal practices. An analyst is in charge of monitoring and recording data relevant to the merchant’s incoming disputes. So, they are well-placed to offer development and documentation to optimize processes. They may go beyond just chargeback reduction, and improve efficiency in other areas of the business as well.

    Do You Need a Chargeback Analyst?

    In a word: yes.

    Merchants lose billions of dollars every year to chargebacks and their resulting fees. That trend is only going to get worse as eCommerce takes over international markets.

    Some merchants might have the tools and staff they need to manage these tasks without assigning a specific individual to them. At a certain stage, though, it becomes impossible to do this and keep scaling effectively.

    The point at which you require a dedicated chargeback analyst—or multiple analysts—varies depending on your business’s unique needs. If you’re on the receiving end of hundreds of chargebacks per month, you may require an entire team to collate and manage this level of disputes. But, even if you see a comparatively small number of disputes every month, bringing on a chargeback analyst could still be a great investment.

    Expertise accounts for a great deal. This should influence your decision when choosing to hire individuals to manage these tasks, or when considering a third-party solution.

    What Should You Look For in a Chargeback Analyst?

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    There are no strict rules for becoming a chargeback analyst. However, the job demands a certain set of hard and soft skills.

    Typically, a chargeback analyst is regarded as a payments or chargeback specialist. An advanced degree in accounting or finance can help. However, it’s more important to have the hands-on know-how to manage chargebacks effectively.

    In addition to education and experience, a chargeback analyst must possess well-developed communication, organizational, and analytical skills. The position involves regular communication with parties who could be upset about unfair transactions. Thus, the ability to remain friendly and professional under pressure is essential.

    Finally, the ideal candidate is an expert at self-motivation and problem-solving. This person must be confident in making fast, well-reasoned decisions with minimal supervision.

    Is an In-House Chargeback Analyst the Right Solution?

    Savings, security, personalized knowledge…those all seem like compelling arguments in favor of in-house chargeback analysis.

    The answers aren’t as clear-cut as they initially seem, however. Outsourcing your chargeback analysis could yield greater long-term savings. Having said that, let’s have a look at the common assumptions about in-house chargeback management, and let you decide for yourself which option is right for you.

    Need

    Need

    Is this something that really requires a full-time position to handle?

    The Assumption

    Chargebacks are only a part-time concern. An in-house analyst can handle chargebacks when necessary, then split their time performing other tasks.

    The Truth

    Between monitoring for fraud, changing industry regulations, and disputes data, managing chargebacks will be a full-time job. One chargeback analyst is probably not suited to the task, let alone a part-time analyst.


    Familiarity

    Familiarity

    Isn’t it better for someone who has first-hand experience with the company and its culture to handle disputes?

    The Assumption

    Our people know the company and the product. They can represent us better than a third-party provider who doesn’t know how we operate.

    The Truth

    Knowing your company is important, but it’s ultimately a minor part of the equation. It’s more important to have the expertise and experience to know the chargeback system inside and out, be able to individualize disputes, and have strong existing relationships with banks.


    Education

    Education

    Shouldn’t it be easy to get an in-house chargeback analyst up to speed?

    The Assumption

    There will be a learning curve. However, once we understand the basics, we’ll be able to manage our own chargebacks with no problem.

    The Truth

    The rules and regulations enforced by the card networks are constantly changing. The evolution of technology means new threats will continue to emerge. Without constant monitoring, your business could take a serious hit before you’re even aware of the risk.


    Oversight

    Oversight

    Isn’t it better to have direct oversight over chargebacks?

    The Assumption

    With in-house chargeback management, we’ll be able to oversee every step of the process, which will be impossible with outsourcing.

    The Truth

    In-house prevention efforts aren’t objective. It’s prohibitively difficult for merchants to analyze their own policies to determine chargeback triggers or effective representment. An outsourced analyst can give you easy-to-interpret information with relevant KPIs.


    Security

    Security

    Isn’t it always safer to handle data in house?

    The Assumption

    Keeping outsiders away from sensitive company information will always be more secure than transmitting it to a third party.

    The Truth

    With a reputable PCI-compliant mitigation firm, employees will have limited access that does not disclose valuable data. Administration staff will be bonded under a liability policy, and security protocols are likely to be tighter than the ones you have in place now.


    Ultimately, we’re not saying you shouldn’t hire in-house chargeback analysts. What we are saying, however, is that sometimes outside help is the more effective solution.

    The fewer chargebacks you have each month, and the more disputes you win, the greater your ROI. Generally speaking, an outsourced solution provider is going to be able to accomplish both of those things more effectively.

    Will a Chargeback Analyst Be Enough?

    Chargeback analysts typically work in tandem with another expert: a chargeback manager.

    This is an important distinction to make. These roles appear very similar, but they should be two separate positions. Each specializes in a different facet of chargeback management.

    Processes like representment are difficult and time-consuming. They require a ton of research, meticulous record keeping, and the ability to make decisions on the fly. A chargeback manager needs to understand the data collection and implementation stage, and also be able to communicate that information to all relevant parties in a timely and effective manner. In contrast, your chargeback analyst is focused on the finer details of parsing that data.

    So, yes… you can manage chargebacks in-house. However, it's a difficult task, and there's a limited prospect of success. Before you decide, consider these questions:

    • Are there any guarantees?
    • Do you need on-demand assistance, or long-term chargeback reduction?
    • If considering a service provider, are there client testimonials available to validate their claims?
    • Does either method support future technology and fraud trends?
    • Do the up-front costs exceed transaction volume?
    • Can this method analyze growth potential and budget accordingly?
    • Is either solution adaptive to your business’ culture and goals?

    Outsourcing some or all chargeback management responsibility doesn’t mean giving up control, nor does it mean that prior work will go to waste. On the contrary, your previously-acquired data can make products and services more efficient. Remember: you want a service provider that works with your internal risk management efforts, not in spite of them.

    Our team works alongside your internal risk remediation team to deliver maximum revenue retention, leading to more efficient staff allocation. Our efforts are backed by the industry’s only performance-based ROI guarantee: if you don’t save, you don’t pay.

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