At a fully-loaded $50 an hour and 30 minutes per careful representment, the in-house cross-over sits around 60 disputes a month. Most growing merchants pass it without realising.
The economics of a chargeback function in a small business break around a specific volume, and most merchants do not know where the threshold sits. A reasonable fully-loaded cost for a mid-market operations hire lands around $50 per hour of effective output. A carefully written representment letter, with evidence gathered and submitted, takes about 30 minutes of operator time. A dedicated dispute analyst can therefore produce roughly 16 letters in an 8-hour day against a monthly fully-loaded cost of around $8,000.
External services charge $25 to $40 per case at meaningful volume; at the high end, the outsourced rate is essentially what an in-house analyst would consume in time. Above roughly 60 disputes a month, in-house is cheaper in pure dollar terms; above 100, in-house wins on both cost and quality, because an analyst who reads every case learns the merchant's specific issuer patterns, the evidence library, and the cancellation and refund quirks of the business in a way no external service can charge for at the volume.
Below 60 disputes a month, the calculation reverses. The fixed cost of the analyst dominates, and outsourcing (or having an existing operator handle disputes in 4 hours of weekly slack) is the cheaper option. Most small merchants sit comfortably below the threshold, but most growing merchants cross it before realising the function should be staffed.