Quick Hit: How to Create a Dispensary Gift Card Program

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Gift cards are steadily growing in popularity. Experts project over $180 billion US gift card sales in 2022.

The popularity of retail gift cards carries over to the cannabis industry. Easier access to the safe products has shoppers looking for unique cannabis gifts for family and friends.

What's a better present than the gift of a cannabis shopping spree?

This post explains how gift cards work in cannabis, how dispensaries can create an outstanding program, tips for training and reporting, and answers to your gift card questions.

Can dispensaries accept gift cards?

Yes, dispensaries are allowed to create and sell gift cards—with a few caveats.

Cannabis regulations in some states prohibit gift card programs for dispensaries. Be sure to check on your local legal requirements before moving forward with a gift card program.

Additionally, it is not advisable to try to create a gift card program without back-end support from your POS system. The key to a compliant gift card program is a compliant partner.

The benefits of a gift card program at your cannabis dispensary

If you’re on the fence about getting started with gift cards, just think about Starbucks. The coffee giant’s gift card program is one of the most popular in the country and they reported over $1 billion sitting in unused gift cards in 2021.

Whether it’s coffee or cannabis, gift cards unlock new revenue streams and additional sales opportunities.

Here are the key benefits of gift cards for dispensaries:

Increase revenue

Unlike selling a traditional cannabis product like edibles, gift cards bring in two separate customers: the card buyer and the gift receiver. One purchases the gift and the other returns to redeem it, creating double the opportunity to earn.

Not only are you guaranteed the money from the gift card purchase, but studies show that shoppers are willing to spend up to $38 more when they redeem a gift card. So when a shopper comes in with a $25 gift certificate, you have a chance to get them to spend $60.

Tip: You can maximize gift card customer spending with some basic psychology pricing tactics. Try implementing price anchoring or out the door pricing to capitalize on shoppers who are already receiving what feels like a substantial discount.

Market your brand

You want your brand’s name to shine in a competitive holiday market. Gift cards have the ability to act as mini billboards.

Boosting brand recognition and associating your logo with “free” products will help build a positive association between your store and prospective new customers.

Tip: Be bold in how you design your gift cards. Make them on brand, unique and eye-catching and include your logo in a prominent spot on the card.

Drive loyalty

Closed-loop gift card programs, where customers can only redeem them at your store (like at Starbucks), get your brand in the wallet of current and prospective customers.

People who hold a gift card to your store have a strong incentive to stop in and redeem it, giving you an opportunity to earn their business for life. On average, only 6% of gift cards never get redeemed, so be ready for your chance to impress.

Tip: To further incentivize repeat customers, link your gift card and loyalty programs to incentivize repeat customers. Try setting the program up so shoppers earn points on each gift card they buy, and receivers earn points by joining your program when they stop in to redeem the card.

dispensary gift cards

How to create a dispensary gift card program

It’s clear that gift cards can help cannabis retailers. Now let’s walk through how to set up a gift card program at your dispensary:

  • Make sure your POS system can accept/create gift cards

  • Print your gift cards

  • Sell and redeem gift cards

Make sure your POS system can accept/create gift cards

If your state’s cannabis laws allow for cannabis gift cards then you can find a strong point of sale system that can accept and create gift cards.

Using your POS to set up your program makes creating, sending, and tracking gift cards easy because it’s integrated with your cannabis store. Gift card sales are automatically processed into your daily sales and can be easily selected as a purchase option when redeemed.

Learn more about gift cards in Flowhub Maui

The process of accepting gift cards will vary based on POS provider, but it generally includes the following steps:

  1. Ring up the customer's purchase.

  2. As you complete the sale, select the option to scan a gift card.

  3. Once the card is scanned, the available balance will list and you can choose to redeem all or some of the gift card.

  4. If the card does not cover the balance, any remaining amount will need to be paid.

Print your gift cards

When printing the physical cards to use for your gift card program, you have two options.

Option 1: Make your own gift certificates in-store by creating a barcode in your POS and printing it with your label printer. Then you can stick the barcode on whatever you plan to use as the physical card (business cards, stickers, etc.).

Option 2: Work with a third party to design your gift cards. These cards typically range from $0.25 to $1.00 each and should include your logo and a SKU which you will scan into your POS to add a balance.

Unless you’re equipped with the necessary materials to create high quality gift cards, we recommend purchasing the cards from a vendor. This enables your shop to sell professional, eye-catching cards with limited work on your end.

Some reputable gift card vendors include:

Sell your gift cards

Once your gift card program is enabled in your POS and your cards are printed, you’re ready for the fun part—to start selling/redeeming gift cards!

We’ll walk through some tips for optimizing your gift card program in the next section. Here’s an example of a typical gift card sale in your POS:

  1. Select a customer from the queue and click "Gift Card".

  2. Enter a Gift Card ID number.

  3. Add the card to the customer's cart.

  4. Finish the sale as you normally would.

cannabis gift card program


Optimizing your dispensary's gift card program

New product offerings and workflows are never complete without a plan to maximize their potential. You need to properly market and measure your gift card program to ensure its success.

Gift card marketing strategies

Your gift certificates should market themselves in many ways. All you need to do is display them in your store and customers will start adding them to their carts. But to maximize consumer purchases, try some of these tips:

  • Train your budtenders. Your sales associates are the face of your store and have a significant influence over customer shopping behavior. Train budtenders to encourage customers to add a gift card to their cart if they're looking for a simple gift for family or friends.
  • Create a social campaign. Tie your gift cards to holidays or events on your social media channels. You can offer gift cards to first-time shoppers or position them as the perfect holiday gift.
  • Email/SMS. Announce your gift card program via email or text message to your audience to let them know this offering is available. A simple announcement will implant the idea in your audience's mind, they'll already have gift cards on their mind the next time they stop in to shop.

Gift card reporting

Tracking key metrics around your gift card program helps with financial forecasting and further optimization. You should consistently run reports on these gift card KPIs:

  • Total cards sold within a date range
  • Average days active for gift cards
  • Purchase dates
  • Last reload
dispensary gift card reporting

You should be able to see, in one display, the balance of the gift card, reload amounts, dates of purchase/last reload, and a list of the receipt IDs where the gift card was used as tender.

    Frequently asked dispensary gift card questions

    Can I create and sell gift cards with Flowhub?

    Yes, Flowhub Maui allows users to create new gift cards, reload existing cards, inspect card values, and print gift card barcodes. Book a demo to learn more!

    Should I create a gift card program at my dispensary?

    Gift cards are a valuable product offering for cannabis retailers. They are popular purchases during the holidays as gifts and year-round if you market them properly. For dispensaries looking to drive revenue and improve loyalty, gift cards can bring in new business in a fun, creative way.

    Can dispensaries accept Visa gift cards?

    Because Visa gift cards are only allowed at businesses that can accept card payments from major carriers, dispensaries cannot accept them–mostly. There are types of prepaid gift cards that allow you to set up a PIN prior to use. Those could be used at dispensaries that allow debit card payments.

    Cards that function without a PIN would operate on the same payments “rail” as a traditional credit or debit transaction. These gift cards cannot be compliantly processed at a dispensary.

    Want to sell and accept gift cards at your dispensary? Book a demo to see how Flowhub helps you set up a gift card program.

    Kat headshot

    Kat Kuchtjak

    Copywriter and Flowhub Blog Contributor

    Kat is a natural storyteller fueled by her love of plant medicine. She is a passionate advocate for diversity and inclusion. As a copywriter, content marketer, and chronic illness fighter, Kat aims to shed light on life-changing cannabis brands and technologies. Connect with her on LinkedIn!

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