FINDING THE BALANCE WITH REDOS, REMAKES AND WARRANTIES

By Julie Bos
Debates around warranties, redos and remakes have been a hot topic for optical labs for years, and all indications are that the issues won’t be completely resolved anytime soon. However, at the recent Lab Division meeting during Vision Expo West in Las Vegas, we learned that the Vision Council of America has started a task force to examine this topic and has recently conducted two surveys intended to reveal the thoughts of both optical labs and ECPs alike.

Here are a few highlights from that research:
• 96 percent of labs suspect misuse of warranties for returned lenses.
• Warranty remakes and Rx errors account for nearly seven out of ten redos.
• ECPs and labs don’t agree on what this costs them. ECPs say they pay for 42 percent of measurement errors; labs say they pay only 33 percent. And ECPs report paying 45 percent of the cost of input errors, while labs say it’s only 18 percent.
More from the ECP Survey:
• According to ECPs surveyed, the average percentage of jobs sent back to a lab for redo each month (by category) are Total Progressives (57%), Anti-Reflective (45.8%), Single Vision Rx (26%), Multifocal Rx--Bifocal/Trifocal (18.5%), Photochromic (17.4%) and Polarized (9.2%).
• According to ECPs surveyed, the average number of days to receive a job that has been redone (from the time they ship it to the lab to when they receive the corrected job) by category are Total Progressives (5.71 days), Anti-Reflective (5.22 days), Multifocal—Bifocal/Trifocal (4.35 days), Polarized (4.24 days), Photochromic (4.04 days) and Single Vision Rx (3.11 days).
More from the Lab Survey:
• According to lens labs surveyed, 55 percent of monthly redos are for Anti-Reflective, 52.8 percent for Total Progressives, 35.5 percent for Single Vision Rx, 23 percent for Photochromic, 14.7 percent for Multifocal-Bifocal/Trifocal and 8.6 percent for Polarized.
• According to lens labs surveyed, the average cost per redone job (by lens category) is Anti-Reflective ($66.55), Total Progressives ($63.87), Photochromic ($56.08), Polarized ($51.26), Multifocal-Bifocal/Trifocal ($24.75) and Single Vision Rx ($16.82).
• According to lens labs surveyed, the average number of days it takes to redo a job (from the time the lab receives the job to the time it ships back to the customer) by category are Anti-Reflective (3.59 days), Total Progressives (2.40 days), Photochromic (2.29 days), Polarized (2.18 days), Multifocal-Bifocal/Trifocal (1.90 days) an Single Vision (1.62 days).

Warranties and Redos: The Central Argument
Most optical labs today believe that a certain percentage of their ECP customers are abusing their warranty/redo policies—and that may very well be true. In such cases, it’s easy to understand why frustrations abound because this practice has a direct (negative) impact on laboratories’ money, time and profits.
But let’s consider this: Even if as many as 10 percent of your ECP customers were, in fact, abusing your lab’s warranty process, are you willing to frustrate the other 90 percent of your customers by cancelling or scaling back your warranty policy? Would it make wise financial sense to venture down that path?

ECPS SPEAK OUT ON THE SUBJECT
To help you formulate your answer, we’re presenting the opinions of four ECPs, who participated in a panel discussion during the Lab Division meeting at Vision Expo West and have valuable thoughts on the matter.

Our four ECPs are: Bob Hubsch, co-owner of Metropolitan Eyecare (with five offices in the Chicago suburbs and Northwest Indiana); Zach McLean, ABOC, optical manager at Eclectic Eyewear in Austin, Texas; Michele Self, ABOC, FNAO, optician supervisor at the University of Alabama at Birmingham (UAB) School of Optometry; and Kirk Underwood, ABO-NCLE, Underwood Optical in Cortez, Colo. Here’s a culmination of their viewpoints on several important questions.

Q. How important are warranties to you (and your business)?
Hubsch: It is very important to us that manufacturers uphold product warranties.
McLean: Warranties are one of the most important aspects of our relationship with our lab, next to customer service.
Self: Warranties are very important because that’s really what helps to set a lab apart from everyone else. The only thing that differentiates one lab from another is their customer service and their warranties. Therefore, warranties are very important to our practice because we can pass them along to our patients and make them happy.
Underwood: Warranties are very important—a 9 out of 10.

Q. Does your practice offer an unconditional warranty to patients?
Hubsch: We will replace any product that is defective; but if the product is damaged by misuse, we don’t believe that the manufacturer should replace the product.
McLean: No, we don’t offer an unconditional warranty to our patients. We typically pass along whatever warranty our lab provides.
Self: In our lens packages, we offer a one-year, one-time limited warranty against everyday scratches.
Underwood: Yes, we offer an unconditional warranty but we’re careful to avoid abuse.
How important is a lab’s warranty and redo policy when choosing a partner lab?
Hubsch: We believe that any reputable laboratory will have a fair warranty policy and we only work with reputable labs.
McLean: A warranty and redo policy is important to me when choosing a lab because it ultimately results in how well I can take care of my patients. I will eat the cost of a lens if I need to in order to take care of a customer, but having a lab that will work with me in these situations is crucial.
Self: A lab’s warranty and redo policy is important for us, but we don’t take advantage of redos. Because we are a school, we’re trying to teach students (future ECPs) how to cut down on remakes, so we make it a habit of teaching them to go back to the patient’s habitual prescription and check the prescription they had before, before writing a new prescription and before filling a new Rx. If there are any questions, or if it seems like there is too much of a change, we might question the change. But we try to cut down on those mistakes from the original prescription by going back to make sure whatever Rx we’re filling won’t have a mistake to begin with. Because of this practice, we are able to keep our remakes down to only 4 to 5 percent.

Q. What do you believe a lab should be financially responsible for covering in their warranty and redo policy?
Hubsch: Truly defective products should be replaced at no cost. Non-adapt policies should be honored. Lenses should be replaced if they do not conform to the prescribed specifications. In our industry, it seems that there are always “courtesy” discounts provided for doctors’ Rx errors. In terms of other situations where a product must be remade, we feel that if we were the ones to make the mistake, then we will pay to have the product replaced. It’s not fair to place that burden on our laboratory. If the laboratories are going to replace our errors, they will increase their prices. This becomes another form of “insurance.” We pride ourselves in having very few “redos.”
McLean: This is a difficult question, as both the lab and I are in business to take care of our customers while making money at the same time. I feel like through the standards that have been in place with lab warranty and redo policies, that is what most ECP’s have come to expect (AR and other scratch warranties at no charge within agreed terms; Rx changes at half price; PAL refits at no cost in most situations).
Self: I know that lens manufacturers offer warranties, so if those are being passed on to the lab, then they should be passed on to us. But we don’t take advantage. We don’t just send anything back to our lab. I don’t believe that anyone should send back just anything to the lab and ask for a remake for free—that’s not fair to the lab. The lab is in business to make money, too, so I don’t agree with taking advantage of the lab. We try to be fair about what we’re really sending back.
Underwood: We give our patients the best possible care. It’s very important to have lab support to provide that care. I believe that labs should provide one year on doctor’s changes on progressives, and two years on premium scratch and AR.

Q. Would you consider a less expensive warranty policy in return for lower lab pricing?
Hubsch: In our situation, we feel that we are not asking for anything unusual with respect to a warranty policy. We believe that warranties should be fair to all parties involved. Laboratory pricing is always an important issue with us and we would not consider paying higher prices for a no-fault warranty policy.
McLean: We recently started working with a new lab that offered us lower pricing. Their warranty policy was slightly lesser, but not in the areas that we value as crucial. In terms of normal AR warranty and RX change, they offer the same standards as I mentioned in the previous question. The only areas that are “lesser” would be the window in which you could make any Rx or PAL changes—90 days compared to our old lab’s 365 days. In my opinion, this is not a significant cutback because in almost every situation in which this rule would apply, we would know if there’s a problem within a month or even less. Therefore, the lower lab pricing certainly makes up for the reduction in redo policy. If we were discussing lower pricing for more limited AR and scratch warranty I don’t think that lower pricing would be nearly as enticing.
Self: I’d rather have higher customer service. The lenses and the labs that I choose are not about the price of the lenses; it’s about the customer service that I receive—about the turnaround time for lenses and about the lab reps and how much they help me grow my business.
Underwood: No, we are at a happy medium.

Q. Are there one or two things that labs could be doing to help you in the area of warranties and redos?
Hubsch: We are very satisfied with the current warranty policy that our laboratory provides. This policy seems to be a standard in the optical industry and it’s completely fair for all parties involved.
McLean: The most important thing that my lab can do for me is offer great customer service, especially when it comes to working with me on warranty and redo jobs. The starting warranty and redo policies are certainly important, but what’s more significant to me is the lab’s ability to adapt those policies and extend them in special circumstances. The ability of a lab to be flexible and to work with me on a job-by-job basis in order to take care of my patient to the fullest is what I value most in an ECP/lab relationship.
Self: I just need a lab to be a partner with me. I’m very happy with my current labs and what they are offering. I value a really good lab rep and when I call in with a question or problem, I want a knowledgeable person on the other end of the line. Usually when you are in the middle of a lens crisis, you want to have somebody on the other end of the line that can help you at that moment and give you advice and to tell you what’s available in the powers and the lens that you need. Therefore, customer service is important and having a lab rep that can come in and help educate my staff and students is another high priority. Furthermore, turnaround time is also very important, and I’m willing to pay a little bit more if necessary in order to get those things. Price is not everything.
Underwood: I would say providing incentives for reducing redos; and working with us for multiple redos, price-wise.

WRAPPING IT ALL UP
As you formulate or make changes to your lab’s warranty and redo/remake policy, keep these industry opinions in mind. Hopefully this information can help you secure a policy that best protects customers and ECPs, without sacrificing your own bottom line.

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Lab Talk-February/March 2018