The good, the bad and the ugly of rebates

Rebates have the potential to strengthen patient relationships and boost sales. Unfortunately, most rebates are set up to be a hassle. So how can ECPs make sure rebates work for their patients?
Published 8.17.2021

There are two kinds of people in this world: Those who mail in for their rebates and those who don't.

Can you take advantage of rebates to dispense more materials to patients who are willing to mail in for them? Or is there a better way? You have to understand the good, the bad and the ugly of rebates to know for certain.

What is a rebate?

To start, it helps to define rebates. As you probably know, they’re offered across all sorts of industries—not just in eye care.

A rebate is a partial refund for an item or service that someone has already purchased. You can receive rebates on your taxes, big ticket purchases, online classes or contact lenses. They’re used by all sorts of businesses. They can contribute to stronger patient relationships and have the appeal to help you convert new patients.

Usually, customers have to submit a claim of sorts in order to redeem their rebates. While some online retailers offer instant rebates, most are redeemable only by mail—yes, even in 2021.

The provider, patient and contact lens vendor waiting for the patient to redeem the rebate.

This process isn’t the best for patients. You’d think we’d be past this by now. But, when it comes to putting money in the hands of the patient, customer-first philosophies fade like a transition lens’s shading indoors. In most rebate offerings, forcing patients to put effort into obtaining their reimbursements is usually preferred over a simple and easy process.

So why are rebates used in the first place? Sometimes rebates ensure a fair price is paid. But often they’re used as a sales tool. And that leads us to the good side of rebates.

The good side of rebates

People love getting money—even if they’re receiving their own cash back. That makes a rebate a powerful sales tool. In fact, to the consumer getting 10% back on a slightly higher list price may sound more appealing than paying a flat, slightly lower list price.

This is also true for ECPs when evaluating wholesale price lists. The opportunity to get a higher value rebate will often supersede a lower upfront cost. The simple idea of receiving something in addition to the products purchased is enough to make the rebate offer the more attractive option.

Rebates are common across all industries. In eye care you usually see them offered with contact lens purchases. Rebates work so well with lenses because they incentivize patients to purchase larger quantities of product, which works neatly alongside practice incentives. Contact lenses are the only materials that patients need to be encouraged to purchase in larger quantities.

For example, consider a six-pack of lenses that costs $58.99 per box. The lens company might offer a rebate to patients who purchase a year's supply. They can buy two boxes (left and right) for $117.98 total. Or they can purchase four boxes and receive a rebate. The rebate offer would have them pay $185.96 total; a price of $46.49 per box and $50 total rebate.

Would you rather pay $117.98 for two boxes or $185.96 for four boxes? Many customers will purchase the annual supply in order to qualify for the rebate.

Don’t forget those practice incentives we mentioned earlier. If patients choose the rebate offer, you’re more likely to sell enough contact lenses to qualify for your own rebates or other incentives direct from the vendor.

But rebates have a bad side

Rebates can be an attractive offer and a powerful sales tool, but they’re not exclusively good. ‍ It’s up to you to convince patients they’re worth the effort. Most rebates are not seamless. Nor are they integrated with any of the technology you have at your practice. Instead, these offers usually are still a paper-based, mail-in, entirely manual process.

You’ll probably have to advertise them via a tear-away paper pad placed near your materials or front desk. And patients will have to request their rebates by snail mail.

Rebate offers in eye care are limited as well. An opportunity to offer them with an array of materials would certainly help opticals dispense more materials. Unfortunately, that's not in the cards for most frames or lenses. Typically, you'll only find rebates for contact lens transactions.

Sometimes lenses will come with a rebate offer as well. But to date, the eye care industry hasn't seen a means of effectively scaling rebates on materials other than contact lenses.

Worse yet, rebates have an ugly side too

We mentioned that, for the most part, rebates are still a manual process. There’s a reason for that. The ugly side of rebates is they’re set up to be a hassle. More often than not, rebates offer the illusion of a reimbursement on the transaction. But turning that illusion into a reality is more difficult than it’s worth.

That’s the reason rebate rates never hit 100%. Nor do they ever really approach 90%. Rebate redemption rates range from between 5% and 80% depending on a variety of factors. However, more often than not you’ll find yourself on the lower end of the spectrum.

So if rebates are an attractive cash-back offer, why are people redeeming them at such low rates? They’re just not worth the time and effort. Even when businesses increase the rebate offer or extend the rebate window, it does little to push redemption rates any higher.

Take a look at the mock up contact lens rebate flyer.

A mock up of a standard contact lens rebate flyer.
A mock up of a standard contact lens rebate flyer.

The top half is dominated by offers meant to entice the patient into making a bulk lens purchase. This is the area they’ll see first. It makes it hard to resist the offer. In fact, there are plenty of customers who may read the top half of the flyer and then only give the bottom section a passing glance.

While the top is clean and features appealing rebate offers, the bottom is text heavy and intimidating. However, that’s where the most important rebate redemption information is housed.

Is all of that work worth $30? It might be worth $100, but does your patient want to buy eight packs of 90 contact lenses? That can be impractical and sometimes unaffordable.

So in order to reap the benefits of the rebate your patient has to:

  • See you for an eye exam. And save a receipt from that exam.
  • Circle the fitting fee and date on the receipt.
  • Purchase a specific number of contact lenses from you. Save that receipt as well.
  • Circle the date on the receipt.
  • Find and fill out a redemption submission form. 
  • Collect the required submission documents:
  • The receipts from the eye exam and contact lenses. 
  • Box tops from the contact lenses. These box tops include prescription information.
  • Make copies of all those documents in case the rebate submission is not approved. 
  • Mail the rebate submission to the correct address.
  • Wait for the rebate to be approved.
  • Wait for their rebate.

What if they forget to circle a date? Or don’t include one of the box tops? What if there’s a spelling error on the rebate redemption form?

It’s hard not to imagine that this process is set up precisely to ensure very few people follow through with it. It offers the illusion of benefits. But redeeming those benefits and receiving a reimbursement is another story

Wait, rebates sound a lot like...

Sounds like a familiar "villain" of vision care, doesn't it? Rebates come across a lot like vision plans. And that's no coincidence. Vision plans refer to themselves as insurance. But that's not what they really are. They're not pooling together a group of members to offset costs and reduce risk.

Some people would call that a scam. But you could describe vision plans more kindly as a giant rebate program. When it comes to out-of-network benefits, that program is set up similar to mail-in rebates. Why? To prevent people from obtaining the illusory benefits they were offered as a part of a transaction—a transaction they began in part because of those benefits.

We fixed out-of-network vision benefits. Wouldn't it be nice if someone found a way to fix rebates in eye care as well?

IMPORTANT: This webinar is an exclusive event for Anagram customers only.
IMPORTANT: This webinar is an exclusive event for Anagram customers only.

Connor McGann
Connor McGann, Content Marketing Manager
Connor McGann is Anagram's content marketing manager. He joined Anagram in February 2020. Previously he was a finance writer and animation project manager at a marketing agency, and managed content for a live chat provider that serviced various industries including health care and plastic surgery.

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