May 25, 2022

The benefits of cashless payments for cannabis dispensaries

May 25, 2022

The cannabis industry has always had a cash problem. The good news? Now there are integrated, cash-free solutions that can help both retailers and consumers.

For dispensaries in the U.S., cannabis remaining a federally scheduled substance was 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 practicesβ€”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.Β 

Integrated cashless payments 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, so maximizing the effectiveness of direct communication with customers while enabling cashless transactions is a must for any dispensary.

Three reasons to implement cashless payments at your dispensary today

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.

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.Β 

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 environmentβ€”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.

Get started with integrated cannabis payments from Dutchie

Dutchie is here to support you with our best-in-class integrated cashless Payments solutions. Our integrated PIN debit solution, in conjunction with Dutchie Pay's successful launch of in-store payments, allows us to streamline your business operations with payment solutions you needβ€”and your customers love.Β 

Oh, and did we mention that over 70% of shoppers who use Dutchie Pay at a dispensary return to that dispensary within 90 days?

Let's grow together. Contact us today to learn more.

About the author
The Dutchie Squad