Do Humans Need Machines for Chargeback Management? What the Data Says

Laura Dobbins, Director of Content Marketing, Riskified
May 22, 2024

In June, fraud managers and analysts from around the world will gather in Brooklyn to talk strategy in an ecommerce environment where chargebacks are increasingly eroding profits and straining operations.

While preventing fraud and chargebacks will be key topics at the conference, so will the results of a new research study about the state of chargeback management itself, because it paints an alarming picture of how current processes are compromising revenue recovery.

More than half of merchants are manual-only

The study was conducted by Riskified and industry advisors Paladin Fraud, who surveyed 300+ chargeback managers to assess the size of the chargeback challenge, key pain points, and how merchants are dealing with increasing volumes. One startling fact to emerge from the survey was the extent to which chargeback management remains a manual process, with 59% of merchants still managing their chargeback disputes 100% manually.

That’s a telling statistic, because chargeback disputes are complex and time-consuming. Analysts must curate evidence, consolidate and organize data, format and submit evidence, and track disputes throughout the process to resolution. For their managers, allocating work and tracking overall program performance become arduous using manual tools like spreadsheets and email, especially when data is fragmented across people and portals. As the study underscores, that inefficiency can also impact win rates.

Thirty minutes per chargeback — where does the time go?

Imagine a typical day at those 59% of fraud environments using manual methods. The team logs in each morning to a queue of chargebacks coming from multiple gateways which must be divided up among analysts and then organized and married up with internal records. This involves a lot of copy-pasting of information about the credit card, customer, and transaction in and out of spreadsheets, even before the analyst can begin to look for key evidence.

A typical dispute can take up to 30 minutes to submit depending on the amount of investigation involved. And a significant amount of that time is spent juggling data vs. looking for clues, which is where human expertise is most valuable. It takes analyst insight and experience to identify the sometimes subtle evidence that may ultimately win the dispute, such as details in a call center transcript, delivery confirmation, or CRM history that might disprove the claim.

The challenge for merchants is to automate the time wasting tasks to leave more room for the high-value work of investigation.

As the research makes clear, getting this balance right can have significant implications for revenue recovery; merchants that support their teams with a layer of automation can recover up to twice the revenue.

Finding the proper role for automation

By automating the more mundane and repetitive steps of the chargeback management workflow, fraud managers find they can make better use of their human talent and scale more easily to handle seasonal upticks in chargebacks. In some instances, low-value or low-complexity cases can be nearly fully automated so that analysts can focus on cases that have the most revenue impact. According to Riskified data, the right application of automation can reduce turnarounds from 30 minutes to about five.

However, merchants must also keep in mind that the goal is to streamline workflows, not disrupt them. Fraud managers should implement automation precisely when and where needed to increase efficiency, permit scalability, and amplify the insights analysts bring to the table

Download the full research report, which includes best practices for optimizing chargeback management, here. You can also learn more about the study implications and glean advice from peers in the community at the Ascend 2024 conference in New York in June.



About Riskified


Riskified (NYSE:RSKD) empowers businesses to unleash ecommerce growth by taking risk off the table. Many of the world’s biggest brands and publicly traded companies selling online rely on Riskified for guaranteed protection against chargebacks, to fight fraud and policy abuse at scale, and to improve customer retention. Developed and managed by the largest team of ecommerce risk analysts, data scientists and researchers, Riskified’s AI-powered fraud and risk intelligence platform analyzes the individual behind each interaction to provide real-time decisions and robust identity-based insights. Learn more at

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