Chargeback Management

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Chargeback Manager

Chargeback Manager

Could a Chargeback Manager Be the Hero Your Business Needs?

You’re probably familiar with chargebacks to some degree. However, there’s also a good chance that you’re unsure what to do about them.

This can lead to some difficult-to-answer questions For example, is it best to let internal fraud management or loss prevention departments handle disputes? Or, should you bring on an expert to handle the problem?

The answer will vary, depending on your business. That said, ignoring the problem is not an option.

So, with all that in mind, let’s examine the role a chargeback manager could play in your overall loss prevention strategy. We’ll see what the typical chargeback manager does, and help you determine which method of managing disputes will be best for your needs.

What is a Chargeback Manager?

Chargeback Manager

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A chargeback manager is a specialist who implements chargeback policies and procedures to prevent chargebacks. They work to engage suspected friendly fraud attacks through representment and keep the business’s chargeback ratio within an acceptable range.

A chargeback manager must have specialized insight and understanding of fraud data, model schematics, and tools. This is because a large part of the job involves reading, analysis, and communicating transactional records and databases. This lets the chargeback manager label trends in dispute filings, and to assist in developing a broader risk mitigation strategy.

This individual is also responsible for keeping all relevant parties apprised of the timeline and status of every claim, as well as overseeing the compilation of analytical data and its implementation through best practices. The chargeback analyst would essentially defer to the chargeback manager, whose job it is to manage your business’s risk profile.

In this respect, the chargeback manager is the most important role in your organization’s fight against chargebacks. Having said that, let’s dig into your options.

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The Role of a Chargeback Manager

Chargeback managers oversee your incoming disputes and representment processes. They also guide and manage your team of chargeback analysts as well. That is to say, this individual delegates tasks to members of your fraud prevention team to better handle disputes and resolutions.

Ideally, prevention is the best chargeback management strategy. As you’re probably aware, though, no one can prevent every chargeback. Your chargeback manager is there to distinguish between those chargebacks you can and can’t prevent, and to decide which disputes you can actually fight and win.

Typical daily responsibilities for a chargeback manager to oversee include:

Reconciling Vendor Disputes

The chargeback manager’s primary function is to organize and track dispute data and analysis to effectively respond to and manage disputes. This also includes managing non-fraud disputes, and communicating with vendors and cardholders on the merchant’s behalf.

For example, many chargebacks are the result of faulty billing and shipping information. This can be resolved by communicating effectively with all relevant parties. The chargeback manager would facilitate these conversations.

Keeping Track of Charges, Fees & Rule Changes

There is a complex web of fees, charges, and other financial ins-and-outs associated with chargebacks. There is also a hefty body of banking rules, laws, and industry regulations to consider as well. Your manager will be fully informed and fluent in every aspect of the payments industry, and have a thorough understanding of any shifting benchmarks that could impact your revenue.

Maintaining Documentation

This is an extremely important task. Your chargeback manager must keep meticulous records to provide evidence in a given dispute. They must also maintain a system to keep track of every ruling and decision with regards to the representment process. When you add in the bank statements, photographs, conversation logs, and other required materials, it becomes a lot of paperwork to digitize and file away.

Interagency Communication

Your chargeback manager must be a supervisor, peacekeeper, accountant, secretary and negotiator…all at once.

It’s their job to be a link between your internal and external risk assessment stakeholders. They plan out the strategies and communicate with agencies to which you must apply for chargeback mitigation and relief. Consider this manager your chargeback strategy liaison; the person you depend on for expertise, guidance, and development.

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Well, to put it bluntly: do you have enough time and energy to devote to all the tasks we just listed in the previous section?

If your answer is "no," then you definitely need a chargeback manager, probably as soon as possible.

Chargebacks cost merchants billions every year, and that trend does not appear to be slowing at all. We can't stress how important that you get a handle on chargebacks.

Knowing that you need a chargeback manager is step one. Step two is to decide how you would like to handle that role. Should your chargeback manager be an in-house position, or should you hire a third-party expert?

There are very real pros and cons associated with both options. We’ll get into those points later, though. For now, let’s discuss what you should look for in a manager.

What You Should Look For in a Chargeback Manager

As with most things, expertise is the number one qualification to consider here.

Typically, a chargeback manager is regarded as a payments or chargeback specialist. An advanced degree in accounting or finance can help, but it is more important to have the hands-on know-how to manage chargebacks effectively. That’s why years of experience in payment processing and management are usually a prerequisite.

In addition to education and experience, a well-rounded manager should be an expert communicator, both verbally and in writing. The position hinges on effective communication between you, your vendors, supporting agencies, and in some cases, with cardholders.

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

Is In-House Chargeback Management the Right Solution?

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

The answers aren’t as clear-cut as they initially seem, however. Outsourcing your chargeback management 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.

Assumption:

Lower Up-Front Costs
There’s no need to invest in potentially-costly solutions up-front. Instead, your internal team can manage your disputes with little added cost.

The Truth:

While your up-front costs might be lower, outsourcing to a chargeback management service can usually offer significantly-higher win rates. This is because they have access to broader, more comprehensive data and insights.


Assumption:

Secure Data
Lots of merchants are hesitant to share their data with a third party. Working with an in-house team means you get to keep your data secure and internal.

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 much tighter than the ones you have in place now.


Assumption:

Business Familiarity
Your team knows the ins and outs of the business. Your chargeback manager will have an intimate knowledge of your operations, customer base, company culture, and more.

The Truth:

Knowing your company is a minor part of the equation compared to knowing the chargeback system inside and out. It’s more important to be able to individualize disputes, and to have strong existing relationships with a number of banks.


Assumption:

Opportunity to Build
Building out a team and getting them up-to-speed at your own pace will make for a better chargeback management strategy in the long term.

The Truth:

The rules and regulations instigated by the 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 your team is even aware of the risk.


Assumption:

Easier Monitoring
Having an in-house team allows for more transparency and accountability.

The Truth:

Your ability to identify inefficiencies and missteps in your own operations can be limited by the fact that you’re so close to the problem. A third party will be able to objectively identify, isolate, and respond to issues that you might have overlooked.


Ultimately, we’re not saying you shouldn’t hire an in-house chargeback manager. 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. And, generally speaking, an outsourced solution provider is going to be able to accomplish both of those things more effectively.

Chargeback Manager

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Your One-Stop Solution for Chargeback Management

Whether you opt for an in-house chargeback manager, or decide to hire a third-party service, it’s important to note that the standards for either should be the same. 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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