Buying a point-of-sale system for a cannabis store is no small endeavor. Many factors come into play. However, the decision-making process can be made more accessible by following some general guidelines.
A cannabis retailer should choose a POS system with features that support their business model, operations, and brand, according to cannabis retail designers, consultants, and POS experts.
“A POS is going to help us run our business, right? So what tools do you need to be able to run that business?” asked Krista Raymer, co-founder of Vetrina Group, a Toronto-based cannabis consulting firm.
“If you’re data-focused, you want a POS provider to provide you the data to make decisions. If most of your business is run through e-commerce, finding a POS provider with smooth integration with e-commerce will be important.”
Christine Foss, Director of Product for POSaBIT Inc., a Washington state-based POS and payment company, said. At the same time, there’s a lot to consider when choosing a POS system; ultimately, a retailer’s business operations should drive the decision-making process.
Most cannabis retailers start by considering their workflow and how their POS will support that.
“Devices have limitations on the workflow. If you have a register bolted to the counter, you can’t walk around the store with it if you want to have an Apple store model,” Foss said.
Mobile phones are also valid for retailers who plan to fulfill many online or curbside orders or make deliveries.
But that brings up another point – internet access. What happens if your store’s Wi-Fi goes down or your employee is making a delivery and needs to complete a transaction in an area with lousy connectivity? Foss suggested checking for systems with an offline mode that can be updated once connectivity is re-established.
Compliance, control, and flexibility
Like every aspect of the cannabis industry, “compliance is king” when choosing a POS system, Foss said.
The POS provider should keep on top of changing laws—purchase limits or tax laws—and, ideally, help you avoid problems, she said.
Another feature in POS systems is the program’s ability to control what budtenders can and cannot do at the point of purchase and provide visibility back to the owners based upon each purchase.
“Sometimes what happens is budtenders will give away too many discounts, or they’ll give away a discount that they shouldn’t,” Foss said. “We can set up discount stacking limitations, we can allow expectations, or we can have a whole discount limit within the store, so no one’s getting more than 50% off.”
Foss said another factor for retailers to consider is whether they want to pull up a transaction by the product or by the customer.
Systems that can pull up the customer first at the point of a transaction will allow a budtender to access that person’s profile, including their favorite products, any recent purchase history, or other notes about the customer. That feature supports more personal engagement with the customer, which is helpful if personalized customer interaction is part of the retailer’s brand, Foss said.
Upgrading the ATM model
A POS system improves upon the traditional ATM model many dispensaries have and can increase profitability, Foss said.
POS systems allow cannabis retailers to make debit sales, resulting in higher average transactions than cash sales alone, Foss said.
For example, a POSaBIT case study of a Washington state cannabis retailer found that the store’s average debit ticket was nearly $20 more than the average cash ticket.
“It’s just the nature of the beast. People spend more money with a card,“ Foss said. “Many owners will say, I make a lot of money from my ATM. And yes, they do. But the amount of money you’ll make from that average ticket being so much larger is a bigger difference than making dollars off the ATM.”
A POS system aligned with all cannabis rules and regulations can also help retailers avoid potential legal problems associated with dispensary ATMs, like the recent warning from Visa.
The financial behemoth notified banks and other financial institutions that it was aware of a scheme under which cashless ATMs in dispensaries were being deliberately miscoded to disguise cannabis purchases—an apparent way to circumvent federal marijuana prohibition and banking rules.
POS systems aren’t perfect
Foss said that customers’ biggest complaints about POS systems usually target hardware reliability, system breakdowns, slow speeds, or reporting errors.
Another logistical headache can be details like naming conventions for products. For example, does the POS system allow products to be shared across stores? Once the product is in the system at one location, is it auto-generated? Foss said this avoids having a database with multiple entries for the same product.
However, one of the biggest concerns with POS systems is customer service. So make sure any vendor you choose offers top-notch customer service and is highly responsive in case of problems, Foss advised.
“Not being able to reach someone when something is wrong is a problem,“ Foss said.
“You know there’s a big difference between a donut shop versus a cannabis store where there are compliance issues and some terrible ramifications if you don’t get things resolved quickly.”
Disclaimer: https://hempindustrydaily.com/how-to-choose-a-point-of-sale-system-for-a-hemp-retail-operation
