Implementing a cannabis gift card program is a great way to increase brand recognition and an opportunity to generate new customers for your marijuana dispensary. Research has shown that if these small pieces of plastic are incorporated strategically into your cannabis business operations, they can boost revenue by up to 40%. These are indeed invaluable tools for upselling your cannabis products as well, as 75% of recipients tend to overspend on the amount pre-stored in their cards. Launching a marijuana gift card program requires minimal investment and is a proven tool to increase profits, elevate the customer experience, and rake in sales on big days like 420 at your dispensary.
Get detailed insights and tips with our ULTIMATE GUIDE TO GIFT CARDS FOR CANNABIS BUSINESSES.
Benefits of Gift Cards
A well-executed gift card program has the potential to bring at least two customers into your dispensary—the buyer and the receiver. A study by First Data showed that 11% of gift card receivers observed that they had never visited the merchant location before receiving the gift card, and over a third became regular customers after redeeming the card. Thus, gift cards are a free marketing tool to attract new curious clients and spread brand awareness. Also, if you offer gift cards as a reward within your loyalty program, a customer will be incentivized to spend more money when receiving points redeemable for a gift card in the future. These branded cards don't just boost your retail profits but also serve as tiny billboards for your marijuana dispensary. Below are five crucial steps to follow when launching a gift card program for your cannabis retail store:
1. Select and Design the Right Solution
Choosing a gift card program that integrates seamlessly with your existing POS system is the most practical and reliable solution. If your POS does not offer any gift card functionality, consider an upgrade to a more advanced cloud-based POS system, like Cova, which offers a completely customized gift card solution. You may also consider opting for standalone third-party gift cards that can be sold through your POS as SKUs, but this solution is not recommended as there is a significant risk of data breaches that can lead to a violation of cannabis laws.
2. Develop a Gift Card Strategy
Building a gift card strategy is a crucial step in implementing this program at your cannabis store. You must decide whether your gift card program is meant to cover your bases across major holidays, occasions like 420 and birthdays, and slower seasons? Or is it supposed to be an integral component of your loyalty program and upsells? It is necessary to plan, design, and tweak the program to fit your unique requirements and customer needs for gift card sales and redemptions at your marijuana dispensary. Cova’s gift cards are personalizable, which means you have total control over the brand look, logo, and design.
3. Ensure Compliance with Regulations
As you already know, cannabis retail is a highly regulated industry, and marijuana gift cards also must comply with specific marketing and advertising restrictions. However, a reliable cannabis industry-specific POS guarantees full compliance with an easy-to-manage, activate, and track gift cards program so that you can sell more cards and add to your revenues without the risk of any legal ramifications. Cova offers localized cards for every market and ensures end-to-end compliance as per cannabis laws and regulations.
4. Outline your Gift Cards Sales Plan
Your supply of gift cards must meet demand, and you must never run low on its inventory. Estimate demand based on your sales volume, holiday season, and target demographics, and plan your order accordingly. Also, decide how and where will you be selling these tiny cannabis vouchers in your store. Placing gift cards at the payment counter is a great way to capitalize on impulse purchases. Train your staff to recommend gift cards to customers when appropriate, and offer incentives to employees who sell the most cards.
5. Promote, Measure, and Analyze
Marketing online and organizing giveaways on social media are excellent tactics to build brand awareness and spread the word about your marijuana gift card program. Capitalizing on holiday season sales by strategically promoting gift cards on days like 420 and occasions that focus on gift-giving will further drive your cannabis gift card sales. You must also track, measure, and analyze your program's results regularly against established KPIs for your business. Cova's integrated reporting tools provide you with insights seamlessly extracted from data within your Cova POS so that you can easily use them to focus on making your gift cards program a success.
Gift cards are one of the safest and most convenient ways to improve cash flow without increasing COGS. A branded gift card that is fully-integrated with your cannabis POS system, such as Cova, is simple to set up, easy to manage, flexible and affordable. However, just implementing a gift card program is not enough, and you must have a formidable marketing and sales strategy as well. With the complexity that comes with shopping for cannabis products, your marketing campaigns must enhance brand visibility and be able to communicate to customers that the best gift they can give is the gift of choice.
The Ultimate Guide to GIFT CARDS for Cannabis Businesses is a complete guide to launching a cannabis gift card program at your dispensary, with detailed information on how to scale and sustain retail growth. Download your free copy now.