As eCommerce chargebacks become more of a problem, a growing number of online merchants are looking to bring an in-house chargeback analyst into their operations.

This professional typically collaborates with financial institutions, payment processors, and card associations to represent the merchant’s interests. The main responsibility of a chargeback analyst includes interpreting chargeback data to assist with the resolution of client disputes and eliminating the factors that might trigger chargeback risks.

In addition to managing chargebacks, these professionals also play a crucial role in fraud prevention by identifying and investigating suspicious activity on customer accounts. They work closely with other departments such as fraud detection, risk management, and compliance to develop strategies and procedures for preventing and detecting fraudulent transactions.

What Does a Chargeback Analyst Do?

Chargeback analysts are responsible for monitoring and analyzing chargeback trends to identify any potential risks or fraudulent activities. They must also ensure that all chargebacks are accurately processed and resolved in a timely manner to minimize financial losses for the bank.

The duties performed by a chargeback analyst include:

• Probing into the authenticity of claims or disputes that result in chargebacks.
• Managing chargeback alert systems and responding to disputes
• Producing reports for incoming disputes
• Reviewing dispute data to identify patterns in chargeback issuances
• Devising strategies geared towards averting chargebacks

What Value Does a Chargeback Analyst Offer?

Merchants that bring a chargeback analyst into their teams can see several benefits. These include the safeguarding and recovery of revenue, enhancement of client experience, deterrence of fraudulent activities, boosting operational efficiency, offering strategic insights for continuous improvement, and improved compliance and risk management.  Let’s explore these benefits in more detail:

Safeguard Revenue

Chargeback analysts are highly skilled professionals who know how to identify and prevent fraudulent activity. By closely monitoring chargebacks, they can pinpoint any potential risks and work towards preventing them from happening. This allows businesses to recover lost revenue that would otherwise be written off due to fraud or disputed transactions.

Enhance Client Experience

Chargeback analysts play a crucial role in improving the overall client experience. By resolving disputes quickly and efficiently, they can help maintain positive relationships with customers. This includes providing timely updates on dispute resolutions, ensuring accurate billing, and effectively managing customer complaints.

Deter Fraudulent Activity

As mentioned earlier, chargeback analysts are well-versed in identifying and preventing fraudulent activities. By reviewing dispute data and analyzing patterns, they can detect potential fraud attempts and take appropriate action to mitigate them. This  protects businesses from financial loss, and also helps maintain the trust of customers.

Boost Operational Efficiency

With a chargeback analyst on board, businesses can streamline their dispute resolution process. Instead of having multiple teams handling disputes, the analyst can oversee and manage all aspects of the chargeback process. This allows for quicker response times, efficient communication with banks and processors, and a more effective overall process.

Provide Valuable Insights

Chargeback analysts possess a deep understanding of transaction data and patterns. By analyzing this information, they can provide valuable insights to businesses about their customers’ purchasing behavior, potential risks, and areas for improvement. This data can be used to develop better fraud prevention strategies and enhance the overall business operations.

Stay Compliant with Regulations

The chargeback process is governed by various regulations and compliance standards that businesses must adhere to. Chargeback analysts are well-versed in these regulations and ensure that all dispute resolutions are compliant. This not only protects the business from penalties but also maintains its standing in the payments ecosystem.

Is it Better for Merchants to Outsource?

Despite the advantages that come with hiring a chargeback analyst, it may be more financially viable to consider third-party assistance.

Third-party entities may provide more cost-effective solutions, expertise, and efficiency when it comes to managing chargebacks, making this option a potentially more profitable choice. Additionally, outsourcing allows businesses to focus on their core operations without the added responsibility and time commitment of managing chargebacks.

Chargeback analysts play a crucial role in helping businesses effectively manage and reduce chargebacks. Their expertise is invaluable when it comes to streamlining processes, providing insights, and ensuring compliance with regulations. While hiring an in-house analyst may be beneficial for some businesses, outsourcing can also provide cost-effective solutions and allow for greater focus on core operations. Ultimately, the decision to onboard a chargeback analyst should be based on careful consideration of individual business needs and goals.

Financial institutions have a duty to advise merchants of their best course of action to manage fraud and chargebacks. So, the decision as to whether to hire an analyst, outsource to a third-party solution provider, or embrace a multifaceted hybrid approach, should be tailored to each merchant’s unique needs.