What is a Chargeback Analyst & Do You Need One?

As someone who dealt with chargebacks, I’ve wondered whether hiring a chargeback analyst is worth the expenses. I wrote this blog post to help you make this decision. And for folks considering becoming chargeback analysts.

I’ll explain whether they’re worth hiring, what they are, their roles, and what it takes to become one.

Here we go.

Key Takeaways

• Chargeback analysts fight chargebacks & recover lost revenue for businesses.
• Hire them if you have high chargebacks, lack expertise, or lose profits to them.
• To become one, relevant experience is key, like customer service or data analysis.
• A bachelor's degree is ideal, but certifications & experience can substitute.
• They analyze trends to prevent future disputes & save businesses money.

When to Hire a Chargeback Analyst

Here’s when businesses should consider hiring a chargeback analyst (in general):

1. High Chargeback Volume: If your business regularly faces many chargebacks, a chargeback analyst can become a vital asset. A dedicated analyst also frees other employees to focus on their core tasks.

There's no magic number to the number of chargebacks required to hire a specialist. They’re worth considering if you consistently face more than a few dozen chargebacks monthly. The more chargebacks you face, the greater the potential for recovered revenue.

2. Lack of Internal Expertise: Chargeback procedures are intricate, and success depends on understanding the rules set by card networks. An analyst possesses this specialized knowledge. Increasing your chances of winning those disputes.

3. Chargebacks Denting Your Bottom Line: Chargebacks result in lost sales and often incur fees from banks. If the cost of these chargebacks is noticeably hurting your bottom line, an analyst can help you recoup those losses.

4. Identifying Problem Areas: A chargeback analyst doesn't just fight disputes; they analyze them. This analysis can help uncover issues within your business, like unclear policies or faulty products.

Then you’ll need to decide whether to go for in-house or freelance analysts.

Hiring a Freelance vs. In-House Chargeback Analyst

Here’s when to consider hiring a freelance analyst::

• Fluctuating chargeback volume: If your chargeback volume isn't consistent (<12/mo.). You only pay for their services when you need them.
• Limited budget: Hiring a full-time employee comes with salary, benefits, and potentially training costs. You only pay freelancers when needed.
• Project-based needs: Great for tackling a backlog of chargebacks.
• Management preference: If you prefer a more hands-off approach and don't want to manage an employee.

And here are scenarios when you should hire a full-timer:

• High, consistent volume: If your business consistently experiences a high number of chargebacks.‍
• Streamlined communication: An in-house analyst ensures closer communication and collaboration with other departments.‍
• Training investment: If you have the resources to train someone.

Consider a freelance analyst for budget constraints, fluctuating workload, or project-based tasks. But if you consistently face a high volume of chargebacks and value close collaboration, a full-time analyst is a better fit.

Summary: Businesses with fluctuating chargeback volume or limited budgets might choose freelancers. Companies with high, consistent chargeback volume could benefit from a full-time analyst.

What Is a Chargeback Analyst?

Chargeback analysts specialize in researching, handling, and preventing chargeback disputes. These specialists save businesses money by potentially recovering lost funds from chargebacks. Analysts do this by submitting evidence to dispute and overturn the chargeback.

In many cases.

They also help reduce the overall number of future chargebacks. Analysts examine chargeback trends to identify root causes. They might find issues like unclear product descriptions, shipping problems, or confusing return policies. Correcting these issues makes chargebacks less likely.

Think of them like financial detectives. They need to have strong analytical and problem-solving skills. We’ll go over these later.

This role typically requires work with credit card companies, banks, and customers.

Summary: Chargeback analysts investigate credit/debit card disputes, seeking to resolve them favorably for the business and pinpoint the causes to prevent future chargebacks.

Pros & Cons of Hiring a Chargeback Analyst

Pros

• Recovers lost revenue: Fights chargebacks to win back money lost in disputes.
• Reduces future chargebacks: Identifies patterns, helping businesses fix issues that cause chargebacks.
• Improves customer relations: Chargeback management can build trust with customers.
• Frees up staff time: Saves other employees from handling complex disputes.

Cons

• Cost of employment: Hiring an analyst means salary, benefits, and potentially training expenses.
• Potential for errors: Skilled analysts can make mistakes that could worsen a dispute.
• Time to see results: Businesses might not see benefits immediately.
• May not be cost-effective for small businesses: Low chargeback volume businesses might not see sufficient return on investment.

Chargeback Analyst Roles

Here’s a summary of what the following sections will cover:

• Investigate Disputes: Dive into transaction details, analyzing customer claims and evidence to determine the validity of chargebacks.
• Keep Track of Regulations & Card Schemes: Stay updated on the ever-changing rules of card networks (Visa, Mastercard, etc.) and relevant laws to ensure compliance.
• Analyze Risk: Identify trends and patterns in chargeback data to pinpoint areas of vulnerability within the business.
• Work with Clients & Vendors: Communicate with customers regarding disputes and collaborate with payment processors or banks to resolve issues.
• Decide What Disputes to Fight: Determine which chargebacks have a high likelihood of success and are worth the time and effort of representment.
• Prepare Representation Package: Compile compelling evidence and documentation following strict guidelines to challenge unjustified chargebacks.

This should be all the information you’d need regarding chargeback analyst roles. But I’ll make it worth your time if you read through the following sections. Because you’ll find more information relevant to whether you’re a business or someone wanting to become an analyst.

1. Investigate Disputes

Chargeback analysts delve into transaction records, customer communications, and other relevant data. Their goal is to determine the dispute’s cause to combat the current chargeback and prevent future ones.

This investigation helps businesses recover funds from invalid chargebacks by providing evidence to overturn the dispute. Additionally, the analysis reveals patterns that can pinpoint problems within the company. 

Issues such as incorrect product descriptions, shipping delays, or unclear return policies are common causes of chargebacks. By addressing these issues, a chargeback analyst can help reduce future disputes, saving time and money.

2. Keep Track of Regulations & Card Schemes

Chargebacks are governed by complex rules set by card schemes (like Visa, Mastercard) and by laws such as the Fair Credit Billing Act. These rules frequently change.

An analyst keeps up with these rules, ensuring the business remains compliant. And compliance helps protect the business from penalties and fees associated with violating chargeback procedures.

It also gives your business a better chance of winning disputed chargebacks because the analyst understands the playing field thoroughly.

Here’s an example:

A card scheme might introduce a new rule about the timeframe for submitting evidence in a chargeback dispute. A chargeback analyst stays informed about changes like this and helps prevent you from losing a chargeback.

3. Analyze Risk & Offer Insights

Chargeback analysts scrutinize chargeback data, looking for trends and patterns. This analysis can uncover hidden weaknesses in a business's processes. For example, they might find many chargebacks from customers not recognizing a transaction on their statement.

This mistake could point to a confusing business name on credit card statements, a problem with an easy solution. By identifying these risk areas, analysts help businesses take preventive measures to minimize future chargebacks.

4. Work With Clients & Vendors

Chargeback analysts often liaise between the business, customers, and external parties like payment processors or banks.

The analyst might contact the customer for more information about the disputed charge. They also communicate the resolution of the dispute. The analyst works with vendors and payment processors to gather transaction details and resolve disputes.

This streamlined communication builds trust, facilitates faster resolutions, and potentially recovers lost funds.

5. Decide What Disputes to Fight

Not all chargebacks are worth challenging. Chargeback analysts evaluate each case to determine if there's a basis for fighting it.

This saves businesses time and resources; fighting a chargeback takes effort. Analysts also reduce the risk of angering customers with frivolous disputes. They have the expertise to decide which battles have the highest likelihood of victory.

6. Prepare & Submit Representation Package

To win a dispute, businesses need to present a strong case to the card network or bank. Chargeback analysts know what evidence is required and how to format it according to strict guidelines.

A well-prepared representation package increases the chances of overturning a chargeback and recovering lost revenue.

Qualifications Required to Become a Chargeback Analyst

The following sections will cover all the requirements and things (e.g., skills) that’ll help improve the odds of someone wanting to become a chargeback analyst to get a job.

1. Education

Here are degrees that’ll help increase your odds of getting a chargeback analyst position:

• Bachelor's degree: Majors in finance, accounting, or business administration provide a strong foundation.
• Associate degree: An associate degree in related fields helps a lot.

While not mandatory, certifications boost your resume:

• Fraud management: Examples include Certified Fraud Examiner (CFE) or Certified Financial Crime Specialist (CFCS).‍
• Financial analysis: Consider Certified Financial Analyst (CFA) or Chartered Market Technician (CMT).‍
• Cybersecurity: Look into Certified Information Systems Security Professional (CISSP) or similar certifications.

Relevant work experience often outweighs formal education. Focus on building skills in payment processing, customer service, or data analysis.

Summary: A bachelor's degree in finance or similar fields is ideal for a chargeback analyst, but associate degrees in related areas can suffice. Certifications in fraud, finance, or cybersecurity significantly enhance your qualifications.

2. Experience

Here's the breakdown of experience beneficial for someone aiming to become a chargeback analyst:

• Customer Service Positions (Any): Teaches you how to handle difficult situations professionally.
• Payment Processing or Finance: Helps you understand transactions and financial concepts.

• Fraud Prevention: Gives you insight into suspicious activity patterns.
• Data Analysis Roles: Chargeback analysts rely heavily on data to do their job effectively.
• Direct Chargeback Experience (Ideal): Having some past experience with chargeback representment is the most relevant preparation for the role.

Even without direct chargeback experience, possessing a combination of these transferable skills makes you a strong candidate. Many employers provide training for new analysts to learn specifics of their systems and processes.

Summary: Prioritize experience in customer service, financial roles, fraud prevention, or data-focused positions when applying for chargeback analyst jobs, but transferable skills are often sufficient.

3. Knowledge

Here's a list of knowledge that’s essential for chargeback analysts:

• Payment Processing Systems: How credit/debit card transactions work, including authorization, clearing, and settlement processes.
• Chargeback Codes and Regulations: Knowledge of various chargeback reason codes and the rules of card networks (Visa, Mastercard, etc.).
• Data Analysis: Comfortable with tools like Excel or SQL to analyze trends and identify patterns in chargeback data.
• Chargeback Management Software: Experience with specialized chargeback management platforms (e.g., Chargebacks911).
• PCI-DSS Requirements: Understanding Payment Card Industry Data Security Standards (PCI-DSS) is essential for ensuring data security and potentially preventing fraudulent chargebacks.
• Fraud Detection and Prevention Techniques: Should recognize signs of fraudulent activity to proactively mitigate chargebacks.
• Laws Regarding Fraud: Familiarity with relevant laws like the Fair Credit Billing Act (FCBA) helps navigate legal aspects of chargeback disputes.
• Guidelines Regarding Transaction Procedures: Understanding regulations set by organizations like NACHA (governing electronic payments) is essential for upholding proper procedures.
• E-Commerce Platforms: Knowledge of how platforms like Shopify process transactions allows analysts to identify potential issues specific to those platforms.
• Cybersecurity Threats and Countermeasures: Staying updated on evolving cyber threats like account takeover or phishing helps analysts identify fraudulent transactions and implement appropriate countermeasures.

4. Soft Skills

Here's a list many essential soft skills needed to become a chargeback analyst:

• Problem-Solving: Need to think critically to identify the root cause of disputes.
• Attention to Detail: Analysts deal with detailed transaction data, paperwork, and regulations.
• Communication (Written and Verbal): Must communicate clearly with customers, banks, and internal teams.
• Organization: Managing multiple chargeback cases simultaneously requires strong organizational skills.
• Negotiation: Analysts often need to negotiate with customers or banks to reach a resolution.
• Time Management: Meeting deadlines and managing workload is crucial in this role.
• Customer Service: Analysts interact with customers.
• Adaptability: Chargeback regulations and processes can change. Analysts must adapt quickly.

Chargeback analysts should also want to stay up-to-date with fraud detection techniques, payment technologies, and industry best practices. This is essential in today’s climate where fraud and technology are evolving at breakneck speed.

FAQs Regarding Chargeback Analysts

How Much Do Chargeback Analysts Make?

The average chargeback analyst (in the US) makes $29 an hour—more than $60,000 a year—nationwide [1]. 

Conclusion

A chargeback analyst fights credit card disputes to recover funds for businesses. They analyze trends to prevent future issues and need strong customer service and data skills.

Businesses with high chargebacks or a lack of expertise can benefit from hiring one.

If you’re a business who’s looking for other ways to prevent chargebacks, see how our tool can help.