Dispensary tips

The benefits of cashless payments for cannabis dispensaries

By
Dutchie
May 25, 2022

The cannabis industry has a cash problem. The good news: now there are cash-free solutions that can help.

For dispensaries in the US, cannabis remaining a federally scheduled substance is a significant obstacle. And even though cannabis is legally regulated in the vast majority of states and Washington, DC, the major credit card networks prohibit the processing of cannabis payments.

Until recently, these restrictions forced cannabis dispensaries into adopting an all-cash policy. The result? Inconvenienced customers and challenging tax collection practices—with dispensary owners literally delivering sacks of cash to City Hall.

Why cashless solutions are better for your dispensary

Cannabis payment processing solutions use electronic processors to receive and distribute payments from customers’ banks. These solutions allow cannabis dispensaries to sidestep all of the difficulties associated with running an all-cash business, such as:

  • Account tracking. Keeping track of cash payments is complicated and challenging. Cannabis payment processing allows retailers to automate transaction reporting in a way that is impossible when dealing with cash.
  • Security risks. Keeping large amounts of cash anywhere is a security risk. Tempted burglars are well-aware of the fact that cannabis retailers typically keep large piles of cash on-premises and often have to deliver cash directly to tax authorities monthly.
  • Constant trips to the bank. Keeping significant amounts of cash-on-hand can be risky, so some dispensaries make multiple trips to the bank in a day in order to keep low in-store cash balances.
  • The hassle of bill payments. Many utility providers just don’t accept cash. This puts cannabis dispensaries in the difficult position of having to make electronic payments, despite not having access to their own business capital in an electronic form.
  • Inconvenienced customers. Many customers prefer to avoid spending cash whenever possible. In fact, when offered cashless payment solutions, shoppers tend to spend more thanks to the added convenience. 

Cashless transactions also offer remarkable benefits to business visibility over cash-based systems. By enabling instant reporting, cannabis dispensaries can enjoy a more in-depth view of the state of their business at any moment in time. They can make payments instantly and significantly improve their cash conversion cycle. This will allow retailers to invest business capital more intelligently and generate greater profits in the long run.

Rewards programs are already a common feature in many retail industries. In the world of cannabis, they offer a powerful option for enabling cashless payment while gathering mission-critical customer data for marketing purposes.

Cannabis dispensaries have fewer marketing options than other retailers enjoy, so maximizing the effectiveness of direct communication with customers while enabling cashless transactions is a must for any growing dispensary.

Three reasons to implement cashless payments at your dispensary right now

Providing your customers with a modern retail experience is a crucial competitive advantage in the cannabis industry. Leveraging payment solutions that allow customers and dispensaries to escape the cash trap helps improve sales volume while reducing the risks associated with operating an all-cash business.

Here are three reasons to implement cashless payments at your dispensary today:

1. Decreased customer wait times
Cashless solutions also decrease waiting times for customers. In the broader retail industry, the transition to cashless payment alternatives correlates with up to a 15% increase in the number of transactions processed per hour. 

2. Reduced opportunities for theft
Some cannabis dispensaries have been the targets of a wave of robberies in recent months, inspiring a national call to reform the federal banking rules that make it difficult for dispensaries to accept virtual payments. Implementing a cashless payment solution will help ensure your state-legal, legitimate business operates like any other type of business.

3. Increased revenue
One of the consequent results of this transition is an average increase in basket size per customer. Dispensaries that enable cashless transactions with Dutchie see an average increase of 25% in order value, leading to increased sales volume and revenue. Upselling and cross-selling techniques are much easier to implement in a cashless environment—customers are far more likely to buy into upsells when they don’t have to physically remove cash from their wallets to do so! This drives ROI (return on investment) and ultimately increases the overall profitability of your dispensary.

The bottom line

The time to implement cashless solutions is now. Although there’s currently no way to offer credit card transactions to customers in the US reliably, cashless payments are becoming an increasingly popular way to alleviate the cannabis cash problem for both dispensaries and customers alike.

Introducing Dutchie’s integrated payments solutions

Dutchie Pay is here!

As attitudes shift more and more each day, Dutchie is thrilled to help prepare US dispensaries to accept digital payments.

Our digital payments solution, Dutchie Pay, can lead to faster checkouts, more significant purchases, more productive staff, and returning customers. Shoppers can now choose how they pay—with curbside, delivery, and pay ahead options. Click here to learn more.

Many dispensaries prefer to offer consumers the choice of payment solutions, including in-store debit transactions (typically referred to as "cashless ATMs"). Retailers can implement our cashless payments solution via a third-party integration with Dutchie’s POS. Cashless payments create a sense of traditional shopping and can help build trust in the cannabis industry. Empower your customers to start paying directly into your merchant account and reduce the complexity (and vulnerabilities) associated with running an all-cash business. 

Contact us for a demo today.

About the author
Dutchie
The Dutchie Squad