Take-home message: Various components of a dispensary’s return policy— time, refund, restyling, and scope— can make or break the success of sales.
By Arthur De Gennaro
When asked, every dispensing ophthalmologist has replied that he would like to increase the dispensary’s sales. This is not surprising. Owners, administrators, and opticians alike often struggle to find new and creative ways to keep sales growing.
Yet, according to a recent study by researchers at the University of Texas at Dallas (http://bit.ly/1R7Cc4o
), the dispensary’s return policy may be hurting its sales growth.
Types of return policies
Return policies come in different “flavors.” Some practices view eyeglasses as a custom-made product that cannot be returned once customers takes delivery. This would be similar to purchasing a high-fashion gown or suit. Generally speaking, once such a garment has been altered it cannot be returned.
Some practices allow patients to return eyeglasses within a specified period—30 to 90 days—but only if customers experience a problem with the prescription, not because they does not like the look or feel of the frame.
Other practices allow patients to return eyeglasses for any reason whatsoever. These return periods are most often specified—30 to 90 day limits are common.
Elements of a return policy
What are the elements of a successful return policy?
. The length of time customers have to return the eyeglasses was found to be the most powerful factor in increasing sales. A surprising result of the research was that the longer the return period, the lower
the number of returns. It seems that when consumers have a longer grace period they tend to become attached to their purchase. Even though the eyeglasses may not be exactly what they had been looking for, customers will be more likely to keep them.
. How much money dispensary customers can get back is the second most powerful factor in increasing sales. If customers return new eyeglasses, will they be able to get all or some of their money back or will your dispensary insist on issuing a store credit?
. A return policy that includes a restyling feature allows dispensary customers to choose a new style without paying a penalty. During a sales presentation, this “no-fault” policy can be a very effective way of closing a sale. This is especially true when customers are having difficulty making a purchasing decision because it adds tremendous value to the price-versus-benefits equation.
. Not all merchandise may be returnable. Certain types of merchandise may be excluded. For example, can the dispensary customer return sale merchandise (usually stale inventory that has been marked down) or eyeglasses that were sold as a low-cost package? What about frames the dispensary purchased as closeouts or that the manufacturer has discontinued?
Lenient return policies win
It seems only fair to note that those practices that have adopted restrictive return policies most often do so as a way of limiting the dispensary’s exposure to loss. You could also characterize this approach as a way of retaining profits.
After all, what would happen if an appreciable number of dispensary customers simply decided to return their eyeglasses for some whimsical reason?
According to the UT Dallas study, it is true that a more lenient return policy could result in more returns. However, the researcher found that having a more lenient return policy encourages greater numbers of customers to make a purchase in the first place.
The increase in sales easily offsets the additional returns. This makes sense. A lenient policy can overcome a customer’s concern that the purchase may not turn out to be the right one. Removing this element of risk, therefore, can often be enough to close a sale.
Beyond the financial considerations, however, a lenient return policy enhances the dispensary’s brand—characterizing it as an accommodating place to do business where customers will not feel hassled should they make an error in judgment. By the way, some of those “errors” can have price tags as high as $800. That’s a big risk in anyone’s book.
Consider this . . .
While reviewing your own return policy, consider this. One of the largest national retail optical chains has a “no-fault” return policy, which, in the past, it has prominently featured in its advertising. According to its website, customers can return their new eyeglasses or prescription sunglasses “for any reason.” That chain will replace them (one-time restyling) or provide a full refund within 30 days. I am guessing that the national chain would not have this policy if it were not a productive one.
What to do
Consider if making your return policy more lenient could result in higher sales. If you decide to take the leniency route, be sure that the opticians are trained to communicate the lenient policy to dispensary customers during each sales transaction. After all, a lenient policy that is not communicated will have no value in the eyes of the dispensary customer and will therefore not generate the increased sales for which you seek.
Arthur De Gennaro is president of Arthur De Gennaro & Associates LLC, an ophthalmic practice management firm that specializes in optical dispensary issues. De Gennaro is the author of the book The Dispensing Ophthalmologist
. He can be reached at 803/359-7887, [email protected]
, or through the company’s Web site, www.adegennaro.com
. He maintains a blog at www.adgablog.wordpress.com