Wednesday, May 8, 2019

Thrifty Thinking: Saving on Eyeglasses

Three-quarters of US adults and 91% of people over 55 participate in the $26 billion dollar US eyeglasses industry. It’s full of inflated prices, absurd insurance “benefits,” and a lack of transparency for consumers. Mark Agnew, the founder of, is trying to change this, and his new consumer guide EYEGLASSES BUYING GUIDE (2019, paperback $14.95), is a major step.
Agnew argues that the optical stores and the insurance companies that dominate the industry are intentionally keeping their customers in the dark. They do this in part, by making sure people don’t understand what type of eyeglasses they truly need and what they should really cost. But it’s not rocket science, and in this book Agnew shares all the information needed to be an educated empowered consumer--and to save hundreds of dollars.
Among the topics covered in the book:
--11 secrets opticians don’t want you to know
--tips on how to save money at the eyewear store
--how to get the most out of your eyewear insurance
--which features you need and which are unnecessary add-ons
--how to read and understand your eyeglasses prescription
--how to choose the best shape frames for the shape of your face

A former Wall Street executive, Agnew came to selling eyeglasses after a mugging left him blind in one eye. The expense associated with the glasses he needed to wear to protect his good eye led him to see major problems in the eyewear industry, as well as a good business opportunity in trying to solve them.  
How do eye doctors, optical stores, and insurance companies work in concert to keep the prices of glasses high?
It all starts with vision benefits, which are sold as an inexpensive insurance add-on. At something like $3/week, most people don’t pay attention. But that adds up to $156 a year. In return, you get a free pair of eyeglasses from a limited selection, worth about $156. Bad deal, right?

Also, many people forget they have the insurance, or they don’t use it every year, in which case the insurance company keeps the premiums.

The insurance companies require providers (optical stores) to sell their eyeglasses at a certain discount. In order to do that, the stores raise their prices for everyone, including the 120 million Americans without a vision benefit plan.

Two companies comprise 80% of the vision benefit industry. And online companies are generally not allowed into the insurance networks because insurance companies make most of their money when people don’t use the insurance.  Adding online companies would increase the number of people using the plan and cut into the profits of the insurance companies.

Eyeglasses are one of the most visible accessories a person can wear.  Why do most people have one pair of eyeglasses, and ten pairs (or more) of shoes?
The eyewear industry is set up in a certain way, and you must go through all the steps to make a purchase. 1. Go to the eye doctor for an exam and prescription.  2. Move to the next room. 3. With your new prescription you are told you “need” a new pair of frames. 4. Pick the frames while someone watches you. 5. Choose “the best” lenses. 6. Pay the bill and leave.
This process takes time, and a visit to the store, during which there is always a salesperson with you.  It usually requires a second visit to the store as well, which makes it an errand. It is unlike all other shopping experiences, and it is very difficult to price compare. This makes it unpleasant, which is why the average person buys eyeglasses only once every two years and only has one pair.

What did you learn about the industry after the mugging that left you blind in one eye? How did it influence your decision to start
My first pair were brown tortoiseshell Giorgio Armani eyeglasses in a P3 shape and without corrective lenses.  I bought them from my eye doctor who recommended them as protection for my remaining healthy eye. I don’t remember what I paid but it was a lot, and I was annoyed but followed his recommendation. That pattern continued for ten years – me following his advice which put $400 into his pocket every two years.

It then occurred to me that everybody else was doing the same thing: buying eyeglasses from their eye doctor at what seemed like too-high prices.  I was a Wall Street research analyst at the time, so I used my skills to research the eyewear industry. I found that the entire industry was structured in such a way to inflate prices too much relative to the costs.

When did you first realize the rest of the industry was going to dislike you?
Immediately, because many brands would not sell to us. Here’s why: Let’s say the wholesale price of a pair of fashion eyeglasses is $100. Optical stores would sell that for $300 to $350. We wanted to sell it for $200. The brands did not want us selling at a lower price than their established customer base, so they would not sell to us.

Twenty years later, many brands are selling to us, but there are still plenty that won’t. Opticians, optometrists, and dispensing eye doctors also dislike us because we sell at lower prices. Every time they make an eye examination, they warn their patients not to buy eyeglasses online.

In 2013, 60 Minutes ran a segment about the eyewear industry that got a lot of attention. It claimed that one company, Luxottica, dominates the industry and its near monopoly is the cause of the high prices.  Is that true?
Leslie Stahl incorrectly reported that the high prices in the eyewear industry are due to the market dominance of Luxottica, which only has a 10% market share in the US even though it is the largest retailer.  However, about 80% of the industry’s retail stores are insurance providers, and therefore must inflate their sticker prices in order to discount them for those people with insurance. The book unravels the many ways in which a person can navigate this problem, and save tons of money on every eyewear purchase. works with Sankara Eye Foundation to provide free surgeries in India to people who, through improper nutrition, have become blind from cataracts. How did you get involved?
There are many ways to provide charity to people.  We had been giving away eyeglass frames for years, but then I realized that the frame was only a small part of what was needed to help people see. I wanted a more direct application to improve vision. To date, over 560 people have had their eyesight restored through our program.

Sankara has developed a great model.  Through their nine hospitals, they take payment for 20% of their surgeries in order to fund the 80% provided free. This model is not only sustainable but growing, with three more hospitals coming online. There are 8 million people in India that are totally blind with cataracts, which is preventable.  Imagine for a moment the main husband and/or wife in a household that has become blind, and the devastating impact that would have on the family’s situation. By curing one blind person, we are literally changing communities.

Mark Agnew lost his right eye in a mugging. Through his interactions with optometrists and optical stores afterward, and his experience as a Wall Street research analyst, he began to look at the eyewear industry. He discovered it was structured in a way that greatly inflated prices and kept customers uneducated and vulnerable to these fees. In 1999, he quit Lehman Brothers to found in order to offer a wide range of prescription eyewear without all the mysterious upsells and charges. It’s since become a leading online retailer for eyeglasses. Agnew lives in Connecticut with his family.

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