Fraud protection is top-of-mind for all businesses, but especially retailers. For cannabis retailers, the risk is more precarious as most operate as a cash-only businesses.
Marijuana is now legal for medicinal purposes in 37 states, and recreational use in 18 states. Still, the Food & Drug Administration (FDA) lists it as a Schedule I drug, which makes it illegal under federal law. That means banks regulated at the national level, including all major credit card companies, will not allow transactions within cannabis businesses, even where it’s legal.
This creates a delicate balance between keeping your business safe and enhancing the customer experience. You want to reduce risk wherever possible. Customers want ease. What’s a business owner to do?
A recent Paysafe survey found that 51 percent of customers would accept whatever security measures were required to keep data secure.
However, the Experian Global Identity and Fraud Report discovered that consumers consistently said they would abandon an online transaction if they had to wait more than 30 seconds.
Whether you sell online or strictly in person, how do you create balance between effective security measures and ensuring the customer has a friendly user experience?
Know your customers
Need drives demand. Because customers want what cannabis businesses have to offer, they become more patient with the process. But that doesn’t mean you can’t be proactive in your search for easier ways to transact business.
Cash will be your primary method of payment for the foreseeable future. A robust cash-control system will protect you and the customer for tracking purchases. A cash-control system should have things like:
- Cash logs
- Daily cash counts
- Procedures for missing cash
- Vault logs
You can also keep watch for other payment methods. Companies are now working on processing services specifically for the cannabis industry. They have a dramatically higher risk associated with the transactions, so you’ll need to determine what risk level you’re willing to accept before you move in this direction.
These payment systems offer workaround solutions, allowing customers to pay with things like ACH transfers, cryptocurrency, or offshore merchant accounts. For the right cannabis business, this may be a perfect way to bring in more dynamic clientele who are ready and willing to pay in other forms of currency.
Keep security in the background
For security to work, being transparent with employees and customers is critical. The more they know about your security methods, and why you have them in place, the more conscious they will be of adhering to the rules.
Because many of your processes are being developed in real-time as laws change, it’s important to keep up with the latest technology. Updating your systems will be mandatory as your business grows. How you keep up with changes in technology will be up to you. Will you do it as you run into problems? Or will you be proactive, choosing to create a team around you that ensures your entire strategy remains cutting edge, providing you with the best of all worlds?
While customers care deeply about security and fraud prevention, they’re motivated even more by easy solutions.
Ask yourself: Is this what my customer wants?
It might be a whirlwind learning curve as you work hard to grow your business and keep customers happy. But because you’re in an industry in its infancy, you’ll likely find yourself in for the ride of your life.
How can we help you keep it all secure?
For IT Strategy, Security and Compliance, or Help Desk Services, reach out to us at Cannabis Technology Partners 360-450-4759.