The Role of a Dispute Analyst
Customer disputes are an inescapable challenge for merchants of every stripe, but some retailers may feel like they spend more time dealing with disputes than actually selling their products. This is especially the case with large merchants and those who serve high-risk markets.
With unmanaged disputes inevitably leading to costly chargebacks and lost revenue, some merchants are hiring dedicated dispute analysts to fight fraudulent chargebacks, investigate dispute-related issues, and come up with lasting solutions. What does a dispute analyst do, and when should merchants think about adding one to their team?
Customer disputes can occur for countless different reasons ranging from clear-cut cases of credit card fraud to highly subjective arguments about product quality. Many disputes that end up in the merchant’s lap may not even be the merchant’s fault at all—manufacturer defects or delivery errors, for example. And of course, there are customers who engage in deliberate fraud by abusing refund or chargeback policies.
With each dispute requiring an appropriate response, it soon gets overwhelming, which leads some merchants to give up on attempting any systematic dispute management at all. This can quickly lead to merchants exceeding their chargeback threshold and getting in trouble with their acquiring bank. Keeping a dispute analyst on your payroll ensures that there’s always someone available to take ownership of dispute and chargeback-related tasks.
What Is a Dispute Analyst?
A dispute analyst is a specialized position that takes charge of resolving customer complaints, disputes, and chargebacks, as well as identifying and managing the risk factors that lead to them. In their customer-facing role, dispute analysts may deal with billing issues, damaged goods, missing shipments, and other common problems. They should also handle retrieval requests, chargeback representment, and related communications with banks and payment service providers.
Most importantly, dispute analysts should investigate the root causes of disputes and provide recommendations to improve the merchant’s overall fraud and chargeback prevention strategy.
Card networks update their payment and dispute regulations frequently. Another important function of a dispute analyst is to track these changes and ensure that the merchant is updating its systems and processes as needed to comply with new card network mandates.
Dispute analysts may also be referred to as dispute resolution analysts or chargeback analysts. This may imply a specific focus on customer service or chargeback prevention respectively, but often the terms are used interchangeably.
What Does a Dispute Analyst Do?
When a dispute is received, a merchant must decide whether to accept the claim or contest it. A dispute analyst will research incoming disputes and gather all facts and documentation pertaining to them. They can determine the appropriate response and ensure that it is communicated to the right parties with all required documentation included.
This ensures that the merchant won’t miss any response deadlines and that they are contesting illegitimate or fraudulent disputes but not wasting time fighting legitimate ones.
When engaging in chargeback representment, dispute analysts will use the chargeback reason code to identify the appropriate evidentiary documents to send in response. They will also work proactively to ensure that all necessary records are being retained in case they are needed to deal with potential dispute scenarios.
Dispute analysts should work with the merchant’s CRM, updating customer records to reflect dispute activity and block friendly fraudsters. Customer data and transaction data should also be reviewed by the analyst to detect patterns of dispute activity and identify their root causes. These analytics should be performed regularly, and the insights they provide should be presented to the merchant as actionable steps to improve policies or procedures so as to prevent future disputes.
When customers approach merchants directly with disputes that cannot be easily handled by the customer service team, dispute analysts can step in to communicate with the customer and come up with a solution that prevents a costly payment dispute from occurring.
What Should Merchants Look for in a Dispute Analyst?
While specific requirements will vary according to the size and nature of the merchant, the typical dispute analyst can be expected to come with the following qualifications:
- High school diploma (minimum) or Bachelor’s degree (preferred)
- Background in customer service
- Strong skills in the following areas:
- Time management
Do Merchants Need Dispute Analysts?
The short answer is yes—every merchant needs somebody to perform the basic core functions of a dispute analyst. If nobody is there to provide an appropriate response to disputes and figure out how to minimize their occurrence, disputes and chargebacks can get out of hand and lead to significant revenue loss and other problems.
The problem is scale. Hiring a dispute analyst (or several) may make perfect sense for large retailers, but mid-sized and smaller merchants may not be able to justify keeping a dispute analyst on as a full-time position.
Attracting qualified specialists to a part-time job can be challenging for merchants in this situation. Many choose to take on dispute management themselves or combine it with another staffed position, but this compromise makes it difficult to give disputes the attention and deep analysis they require—especially during the holidays and other busy shopping seasons when fraud and chargeback activity spikes.
One solution that can work for merchants of all sizes is to hire a chargeback management company that can provide the knowledge and support you need. The right provider will make sure you’re getting the benefits of a dispute analyst’s experience and expertise in a way that fits your budget and provides you with a verified positive ROI.
Customer disputes are significant events that can affect your revenue, customer relationships, and brand reputation. They may involve either your customer service team or your payment processing team or both, and to keep them under control it really helps to have someone in charge who can work with both teams, as needed, to produce the best possible outcomes and learn how to prevent similar incidents from recurring in the future.
Merchants have three options for filling this role: they can do it with current staff, hire a dedicated specialist, or work with a chargeback management firm. By weighing all of the relevant factors, merchants should be able to determine which solution will provide the best combination of affordability and effectiveness.