How Dermstore Turned HSA/FSA Payments Into a Growth Channel With Flex

Dermstore customers were already searching for ways to use their HSA and FSA funds on skincare. The demand was clear and closely aligned with Dermstore's belief in skincare as healthcare. But creating an experience that could support Dermstore's expansive assortment while making HSA/FSA payments simple for customers required the right partner.

Together, Dermstore and Flex built an HSA/FSA experience designed around how Dermstore's customers actually shop. Since launch, the program has grown into a meaningful driver of the business, bringing in new customers, increasing basket sizes, and contributing up to 22% of revenue during peak periods.

The opportunity was already there

HSA and FSA consistently ranked among Dermstore's top on-site search terms. Customers were actively looking for ways to use their benefits on skincare, but Dermstore didn't yet have a way to meet that demand.

For the Dermstore team, this was a clear signal of customer intent and an opportunity to better serve customers while opening up a new source of revenue.

Since launching Flex, that opportunity has proven significant. HSA/FSA purchases now drive 14% of Dermstore's revenue, climbing as high as 22% during peak periods.

"HSA and FSA were consistently, day in and day out, our top ranked search terms on site, showing that customers had a real interest in this with intent to use their benefits on skincare."

Rachel Laufer, VP of E-commerce, Dermstore

Building the right experience together

From the beginning, Dermstore felt strongly that accepting HSA/FSA payments needed to feel seamless for customers. Rather than directing shoppers through a reimbursement process after purchase, the team wanted customers to be able to use their HSA/FSA funds directly within the shopping experience.

Flex stood out because it could deliver the native payment experience Dermstore was looking for, keeping customers in the purchase flow and making it easier to understand and use their benefits.

But creating that experience came with a unique challenge. Dermstore carries hundreds of brands and thousands of SKUs across multiple categories, making eligibility mapping far more complex than it would be for a single-brand business.

The teams worked closely together to build an experience around that complexity, establishing eligibility across Dermstore's broad assortment while giving the Dermstore team an active role in shaping the customer journey and identifying opportunities to make it better.

Since launch, 91% of Dermstore's Flex orders have contained a Letter of Medical Necessity-eligible item.

That collaboration has continued as the program has grown, with the teams working together on catalog updates, eligibility changes, customer feedback, and enhancements to the experience.

"What stood out about the partnership was really your willingness to treat us as a true collaborator rather than just any other client."

Rachel Laufer, VP of E-commerce, Dermstore

Turning awareness into growth

Once the experience was live, the next opportunity was making sure customers knew it existed.

Dermstore found that repetition across the customer journey was essential. The team incorporated HSA/FSA messaging across multiple channels and created educational content that helped customers understand what's eligible, how to pay, and how the experience works.

The insight was simple: many customers already had the interest. They just didn't know the option was available.

"For a lot of customers it wasn't that desire was the barrier. It was just not knowing that we had this capability."

Rachel Laufer, VP of E-commerce, Dermstore

Dermstore also began incorporating HSA/FSA messaging into key promotional moments. By reminding customers that they could combine sale pricing with their pre-tax HSA/FSA funds on eligible purchases, the team created a powerful savings message at moments when purchase intent was already high.

The strategy paid off. During peak promotional moments, Flex grew to 15% of Dermstore's order share.

From payment method to growth channel

What began as a way to meet existing customer demand has grown into a meaningful acquisition and growth channel for Dermstore.

On average, 30% of Dermstore's Flex customers are new customers, helping Dermstore reach shoppers looking for a place to use their HSA/FSA benefits.

The impact extends to returning customers as well. Across new and returning customers, Flex orders have a 43% higher AOV and 24% more items per transaction than Dermstore's overall site averages.

That change in basket size also points to a shift in how customers are shopping. Rather than purchasing a single product, customers can use their benefits to build more complete routines, including products like cleansers, treatments, and SPF, in one transaction.

The impact became even more pronounced during Q4. During peak moments, Flex reached 15% of Dermstore's order share and up to 22% of revenue, while Flex orders maintained a 51% higher AOV than Dermstore's overall site average.

Bringing skincare as healthcare to life

For Dermstore, the success of HSA/FSA goes beyond the numbers. The company has long believed in skincare as healthcare, with a focus on making professional-grade skincare more accessible. HSA/FSA acceptance is a natural extension of that mission, giving qualifying customers another way to invest in eligible products and build routines around their long-term skin health.

"Skincare as healthcare is a narrative that we really believe in. So having HSA and FSA eligibility really just aligns so closely with that."

Rachel Laufer, VP of E-commerce, Dermstore

Together, Dermstore and Flex have turned an unmet customer need into a meaningful growth channel, creating a simpler way for customers to use their benefits while supporting Dermstore's broader mission around skin health.