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Cannabis Gift Cards: A Mistake

The prepaid gift card has been one of the more clever workarounds to the cannabis industry’s cash-only dilemma, but it’s also been one of the most problematic. This system has been popular with dispensaries because customers can use credit cards to load gift cards.
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Customers typically pay a $2-$5 flat fee each time they load money onto their gift card, which isn’t such a good deal for them. And having another payment card to keep track of is inconvenient. These gift cards offer NO fraud protection for consumers, and contain confidential info that can be compromised if the card is lost or stolen. 

Similarly, there are numerous drawbacks for dispensaries. The pre-load requirement significantly slows down checkouts. Worse still, the card networks (VISA, Mastercard, Discover) prohibit cannabis-related transactions and actively seek violators of their merchant policies. 

Yet there are processors who offer to circumvent detection again by disguising the nature of the business and using offshore banks and processors and false company names. The high costs, which regularly exceed 5%, are passed on to the merchant.

Dispensaries and payment processors who get caught attempting this workaround are also subject to severe consequences. These penalties can include merchant account revocation, seizure and worse. Taking this into consideration, it’s no wonder that nearly every dispensary is cash only.  

To learn more about digital payments for cannabis download our ebook!

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#Payments   #Digital Currency   #Cannabis