Optometric Management Tip # 192   -   Wednesday, September 21, 2005
A Sensitive Subject: Refunds

For many eye care professionals, the idea of giving a refund to a patient is… well, you pick the word. Insulting, offensive, unfair, demeaning, upsetting, annoying… whatever the word, it can ruin your day. No business owner likes to take back a product or learn that a customer is unhappy with a service, and doctors are even more sensitive about this, because they are professionals, not retailers.

We’ve all been there… dealing with a very unreasonable patient who is making a demand that is completely unrealistic, when the problem was not the fault of the doctor or staff. These situations can defy all logic, which makes them very upsetting. Typically a staff member receives the complaint first, and then may take it to an office manager, who may take it to a doctor. In the process, everyone feels the stress. While these cases often have to be decided on a case-by-case basis, it’s important to review how your office typically handles them. It may be smart to hold a staff training session and develop new policies when the topic is purely hypothetical and a refund request is not staring you in the face.

The way a practice deals with refund requests is often very telling about its patient service philosophy overall, and that philosophy is the key to success and high revenue production. Realize that the revenue you generate is dependent upon customers (patients) and the more of them you have and the more loyal they are, the more revenue you’ll gain. Contrary to how most practices handle a request for a refund; my advice is to not fight it at all. This goes against the grain for many doctors, but trust me, letting the customer win is a very smart business strategy. You may think that you can simply keep the group of patients that are reasonable and let the others go, but sadly, there are too many to let go, and those that you do let go can do incredible damage to your reputation.

Realize that the only person’s opinion that really counts in business is that of the customer. No one else’s opinion comes close. So if you hold your ground and refuse a request for a refund, or tell a patient that you can only provide so many free remakes on a pair of glasses, the short term financial savings is greatly overcome by the high cost of an unhappy customer. Maybe you feel like it’s not the money, but rather that you are doing what’s right. Perhaps you are simply sticking up for yourself and showing the patient that they can’t get away with unfair demands. To that I say, unless the patient agrees, you did not achieve your goal. And the patient never agrees.

In fact, what is really aggravating is when you decide to give in and let the patient have the refund, or whatever, and he is still angry! It certainly seems to me that when you go beyond reason to give patients what they want, they ought to appreciate it. When they don’t, you should learn how far apart you really were. From the patient’s point of view, even the refund did not make you square!

Doctors must act like businesses. Forget that you are somehow immune from society’s retail standards because you’re a doctor. The public doesn’t think that way and they will hold you to the standards of any other business when a problem arises. Given that, how do you expect a business to behave? How do great businesses behave? Strive to match that. It doesn’t matter that the glasses are custom made, or that the professional time was delivered and can’t be taken back. Just guarantee satisfaction.

Here are a few practical factors to consider:

• You don’t have to announce an open refund policy to everyone. You can even attempt to limit refunds to materials and products only (not offering it on professional services), because many people will view that as fair. But if a patient asks for a refund, I’d listen to their complaint objectively, understand it, and generally give the refund.
  
  
• Patients don’t usually request refunds on amounts paid by insurance, but if push comes to shove, I’d either reinstate those benefits or simply give that part back in a check.
  
  
• Empower your staff to make a decision on behalf of the practice and train them to not take the problem to the doctor! Keep the doctor out of it. If the doctor says no, the patient relationship will be damaged forever, and if the answer is always yes, why ask? As long as my staff makes the patient happy, I completely support the decision.
  
  
• Refund checks can usually be printed and mailed within a few days; patients generally understand that there is an administrative office that handles such matters. But I like to empower an office manager to be able to write a check against a petty cash account on the spot if needed.
  
  
• Don’t take too long to tell the patient what you’ll do. The longer a decision takes, the more tempers brew and the bigger the issue becomes. Saying yes right away makes the problem minor.
  
  
• Let the patient win this time and learn from the problem for the future. Talk about it with your staff and work on prevention.
  
  
• The right decision is really pretty easy. Pretend that you are the patient and adopt his complaint as if it were valid. Just accept it as true. Then pretend that you are quite upset about the problem and envision what you would expect the best eye care practice in the world to do about it. Consider being more than fair; going above and beyond what’s expected. That is how great companies are built.

Best wishes for continued success,

Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management