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Have you ever noticed the large number of no charge remake jobs you do per month? If you don't track and review this data regularly you may be unaware of the number, but it can be big. There are many reasons for “remakes” or “re-dos”, but let's consider the ones that are due to frame breakage or scratched lenses under an anti-scratch or antireflective warranty. We tend to think of these jobs as no charge and fully covered by the lab or supplier and just ignore them, but let me assure you, the remake has a cost!
The cost of a free remake
There is a great deal of labor cost involved in each job that is replaced under warranty. Just follow the steps:
Staff member listens to the patient describe the problem.
The eyeglass order is written up or entered into a system.
Typically, the frame and lenses are disassembled.
The damaged frame or lenses must be packaged and shipped to the supplier with an invoice or proof of date of purchase.
The completed order is received and verified.
The eyeglasses are reassembled and cleaned.
The patient is notified the order is ready.
The eyeglasses are dispensed and adjusted.
With conservative estimates, the total time of the actions above would exceed 30 minutes of staff time.
In addition, there are shipping costs both ways that are usually paid by the practice.
The big picture
I'm all for excellent customer service and if the eyeglasses were sold at premium prices, one could make a good argument that the warranty service described above is just providing excellent service after the sale. That kind of excellent service has value in patient goodwill. I'm OK with that, but be sure you are fully aware of what's happening in your practice. Because optical work is mostly delegated to others and because no-charge work may not make it onto your practice financial reports, the owner often does not realize the extent of this work. There may be a way to provide excellent customer service and also reduce costs.
When patients learn that they can obtain free lenses or a free frame just for the asking, the tendency to use the benefit grows. Some patients will exercise their free warranty coverage not once but several times throughout the year. The more patients you see, the greater number of no charge jobs you'll make. Many practices make 50 or more no charge jobs per month!
There are many variables when it comes to designing the warranty so I can't tell you exactly what to include in yours, but here are some factors to consider.
Warranties from the lab or manufacturer are extended to your practice, not to the consumer. You don't have to offer any warranty at all. I think some warranty coverage is a smart marketing idea, when the lab is backing you up, but it could have limitations or co-payments.
What is your pricing structure or vision plan usage? If your profit margins are not great you may not be able to extend such generous coverage.
Many practices provide two year coverage on frames or on anti-reflective lenses. One year may be adequate.
You could sell a scratch coating or basic antireflective coating and provide no warranty or a one time use only warranty.
You could sell an extended warranty as an extra option.
You could provide a warranty but require a co-payment or a deductible for each time it's used. Actions like this reduce the number of frivolous remakes due to microscopic hairline scratches.
How to implement the change in policy
When you can implement a change in your warranty policy depends on your current policy. You should always operate with integrity. If the policy is very vague and unspoken, you may be able to just start with a new policy right away. If the warranty coverage has been formalized, you may need to design new paper forms in your office that spell out the benefits you now offer. In the latter case, your staff would review the record for the coming year and apply the proper rules to people who had the old vs. the new warranty. There is no need to disclose what you no longer offer. Just state what the new warranty includes in a positive way.
Recoup some of the cost
One excellent idea is to begin charging a shipping and handling fee to all remakes that require shipment of the old materials to the supplier. This $10, $15 or $20 fee can often be put into effect right away. Most patients won't object at all to the minor charge when looking at the prospect of getting a complete new pair of frames or lenses, but the practice net may increase by hundreds of dollars per month.
If you provide a printed warranty form at the time of the eyeglass dispensing it's a good idea to add a bullet point that a shipping and handling fee may apply.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
Dr. Gailmard's new book, Practice Management in Optometry: A Blueprint for Success Based on the Optometric Management Tip of the Week, is now available on Amazon.