Although consumers are making purchases, the reluctance to spend remains prevalent.
As such, brands and retailers are trying new ways to entice consumers to shop while also offering methods to facilitate refunds. The most recent approach involves the utilization of Flexible Spending Accounts (FSAs).
While the prevailing perception is that FSAs are predominantly utilized for medical and dental expenses — or even over-the-counter medicine like ibuprofen — funds in those accounts can also be used to shop at some health and wellness brands.
In fact, according to a Modern Retail report, wellness technology company Therabody is experimenting with new ways to streamline spending for shoppers. This includes the use of FSAs, a response to the fact that up to 40% of shoppers allow funds in their FSA accounts to lapse annually.
According to the company, its Theraguns qualify for coverage under health spending accounts, and more than 190 of Therabody’s products meet the eligibility criteria.
Typically, customers needed to submit their receipts to their FSA or HSA account provider to seek reimbursement for a qualifying purchase. However, this year, Therabody is trying something new. has opted to implement a payment method for shoppers through a vendor named Sika Health.
According to Modern Retail, Therabody’s customers now have the option to choose direct payment from their FSAs at the checkout, similar to other digital wallets.
FSAs can cover expenses related to gym memberships, weight loss programs, mental health services, acupuncture, chiropractic care and even specific dietary supplements and health foods.
Consumers are increasingly embracing these accounts as a way to manage their healthcare expenses. Notably, there has been a rising preference for high-deductible health plans, which often provide the option of an FSA. According to Aite-Novarica Group, an estimated 32.6 million FSA accounts were active in 2022.
This trend broadens the potential customer base for wellness brands eligible for FSAs. Brands now have the opportunity to educate consumers who may not fully grasp the diverse range of expenses covered by FSAs and how their products align with these criteria. A recent report from SHRM noted that over 40% of employees with FSAs forfeited a portion of their account contributions in recent years. On average, these individuals lose between $339 and $408 annually by not fully utilizing their FSA funds before the spending deadline.
Supergoop is another brand that’s leaning into FSA spending. The health and wellness company is educating customers about the process of expensing its products through FSA accounts with an entry on its FAQ page.
According to Supergoop, the skincare brand observes boosts in sales twice a year as customers utilize FSAs for their purchases. The initial surge happens in early summer when individuals are restocking their sunscreen essentials. The second peak occurs towards the end of the calendar year as people seek to utilize their contributions before they expire. To enhance these sales spikes, the brand proactively sends reminders to its customers.
Other brands offering FSA-eligible products, such as Sun Bum, COOLA and Neutrogena, along with other skincare, bandage and massage device retailers, reach out to consumers seeking to utilize their FSA funds by showcasing their products on FSAstore.com. Additionally, Amazon has created a dedicated category for FSA-eligible products, streamlining the process for users to input their card information and finalize these transactions.
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