As the legal cannabis industry matures, so do the expectations of cannabis customers. When a customer visits your dispensary, they come expecting two things: a variety of options and convenience. Right now, you’re probably thinking through the products you offer and whether your online menu is up to date. What you may not be thinking is that these expectations extend beyond your product offering to the options your dispensary offers when it comes time to pay. It’s been proven in every retail vertical that offering multiple payment options at checkout improves revenue and customer experience. Let’s walk through the pros and cons of different payment types and how Treez is changing the game with integrated Treez Payments.
Cash has always been king in the cannabis world. The prevalence of cash in cannabis is partly due to federal legislation lagging behind that of states with legalized markets, limiting cannabis operators’ access to credit card processing options and federally regulated banks. There are both benefits and risks to cash as a payment method.
One benefit is familiarity. Customers have come to expect cash as being the only payment option at dispensaries, making it a familiar way to transact, but there are a few downsides of having cash as your only payment option. Cash can be a security issue for both your business and your customers. Bad actors know that dispensaries and dispensary customers are likely to have a lot of cash on-hand, increasing security risks for all parties. The use of cash can also disrupt the checkout process if a customer needs to withdraw more cash from the ATM after they’ve finished shopping. Lastly, cash means coin change, which can add up quickly without a bank account to deposit it into.
The benefits and risks of an in-store ATM are similar to those of cash transactions – familiarity, but with underlying security issues. The familiar, if not disjointed process of deciding what to purchase, leaving the register to get the appropriate amount of cash out of the ATM, and returning to the register to complete the transaction has, unfortunately, become the typical dispensary customer experience. While having an ATM on-site is convenient for cash customers, there are some risks to consider. In-store ATMs are at risk for theft and tampering, and these expensive pieces of equipment require regular maintenance, increasing costs even further. This non-integrated payment method also disrupts the workflow for sales associates, leaving the door open for manual errors.
Cashless ATM allows the customer to use their debit card to pay for their purchase. There are two types of cashless ATMs – integrated and non-integrated. Both replicate an in-store ATM in that they charge a merchant fee and require a round-up of the transaction to the nearest $1 or $5 whole dollar amount. Now, let’s dive into what makes non-integrated and integrated cashless ATMs different.
Non-Integrated Cashless ATM
Non-integrated cashless ATMs are debit terminals that are often used in lieu of an in-store ATM. This type of cashless ATM is easy to implement because it doesn’t need to be plugged into your POS system. The downside of this easy implementation is that the debit terminal cannot talk with your POS system, increasing the risk of human error for sales associates and accounting. The process of checking out with a non-integrated cashless ATM needs to be initiated by the sales associate at the proper debit terminal. Depending on the partner, the associate then needs to select a few different buttons to get to the point where the customer can complete the transaction with their debit card. This longer workflow, compared to an integrated cashless ATM, is more cumbersome for the sales associate and increases the risk of manual errors.
Two systems that cannot talk to each other can create a reconciliation nightmare. As the business owner, you have to trust that the sales associate is going to match the balance between the two systems by marking the correct transaction amount plus the round-up in the POS system. The sales associate then has to manually enter the cashback amount from the round-up as a negative transaction in the POS, calculate the difference between the round-up and actual transaction amount, and then give the appropriate change to the customer. If this step is missed, the round-up is not accounted for in the POS system and is therefore not being taxed, which can lead to some major tax discrepancies down the road. If cashback is not given to the customer, that means you’re overcharging them and creating a poor and dishonest customer experience.
Integrated Cashless ATM (Treez Payments)
Treez has just launched an integrated payment solution that removes any guesswork around transactions for sales associates, management staff, and accounting. We call it Treez Payments — an integrated cashless ATM that allows debit card payments to process directly through your Treez portal. For the customer, the checkout process with Treez Payments is the same as a non-integrated cashless ATM. But, since the integrated cashless ATM in Treez Payments interfaces directly with the SellTreez POS system, it removes the need for the sales associate to do anything on the debit terminal to initiate a transaction. This streamlines the workflow for your sales staff — all they have to do is process the transaction as normal in Treez and then select charge debit > cashless ATM as the payment option on the checkout page. Integrating the cashless ATM means your POS and debit terminal talk to each other, removing the risk of manual error and ensuring that figures and balances match at the end of the day.
Integrated Treez Payments does all the work for you. It accounts for the fact that there’s a round-up and merchant fee and automatically displays exactly what the sales associate owes back in cash to the customer on the checkout screen. Depending on your receipt configuration, both the round-up and merchant fee are displayed as line items on the customer’s receipt, improving transparency for your business and the experience for your customer. With Treez Payments, all taxes and receipts are handled within the Treez system, making it easy for both the customer and accounting to understand.
Implementing Treez Payments takes some configuration from Treez Customer Support but learning how to use Treez Payments only requires about 15 minutes of training for your staff – it’s just two extra buttons to learn at checkout! As long as each terminal in your dispensary has reliable internet access (either ethernet or WiFi), all you have to do to get started with Treez Payments is plug it in and go!
ACH (One-Click Treez Payments)
Treez-supported Automated Clearing House (ACH) payments (a.k.a. One-Click Treez Payments) are electronic payments that pull money directly from a checking account. Think of it as writing a check, but without having to actually write a check. An ACH payment pulls an exact withdrawal amount directly from the bank and usually includes a fee. To sign-up for One-Click payments, the customer links their bank account to a secure portal linked to the dispensary they first time they checkout with this option. Once their payment information has been saved, customers will be able to pre-pay for eCommerce and in-store orders with the click of a button on any mobile device — no 3rd party apps necessary. Even more, this offers customers a completely contactless and expedited way to pay for their orders, which is at the forefront of many consumer's minds during their unprecedented time of COVID-19.
There are a few other payment options in Treez when it comes time for a customer to check out. As we mentioned earlier, credit card payments are not yet available for most legal cannabis operators. The availability of credit card processing in the future is promising, though, with legislation like the Secure and Fair Enforcement (SAFE) Act passing in the House of Representatives in 2019. A few other payment types that are available now are gift cards and loyalty points. Treez has integrated rewards and discount programs that are easy to set up and great ways to grow your loyal customer base.
Providing multiple payment options for your customers will put your dispensary above the rest. Remember, options and convenience are what your customers expect when they choose to visit your retail location. Integrated Treez Payments will not only save you and your sales staff time, but will take the headache out of accounting, taxes, and compliance. Delight your customers, boost revenue, and automate the entire transactional process with Treez Payments.