Vape Retail Made Easy: Overcoming Industry & Compliance Challenges with Technology

The vaping industry is booming, but for vape store owners, growth often comes with a unique set of challenges. From navigating complex regulations to securing reliable payment processing and funding, it can feel like you’re constantly jumping through hoops.

In this blog, we’ll explore some of the biggest hurdles vape businesses face, and how a comprehensive solution like Lightspeed can help you overcome them.

• High risk payments: the first hurdle for vape stores
• A wide and varied inventory…. But how to manage it?
• Ensuring compliance with age verification laws
• Loyalty and community building
• For an extra edge: data and reporting
• Easily managed ecommerce
• Your secret weapon: automation (and more)

High risk payments: the first hurdle for vape stores

One of the biggest challenges for vape stores? Payment processing. Thanks to ever-changing regulations, financial institutions classify vape retail as high risk—which means even wholly legal vape products are subject to strict rules. Some payment processors turn vape business away entirely. 

Any experienced vape store owner has likely been through their share of roadblocks trying to process payments, and many have even been kicked off their processor without much warning. Some have settled for unintegrated payment processing, which is a security risk, even if a business only takes cash.

As a vape shop owner, you ideally want a payment processor that ticks all these boxes:

• Experience with high risk payments: Don’t settle for a payment processor that’s new to the high risk game. Look for a vape processing provider with a proven track record of successfully serving businesses like yours.
• Fraud detection and security: Ensure your payment processor is PCI DSS compliant, meaning they adhere to the highest security standards to protect your customers’ data. Look for advanced fraud detection and prevention, chargeback protection and address verification (AVS) to minimize your risk and prevent costly disputes.
• POS integration and hardware: Seamless integration between your POS system and payment processor is essential for efficiency and accuracy, and helps protect your business by removing unnecessary human entry steps.
• Funding time: Cash flow is king, especially for high risk businesses. Choose a payment processor that offers fast funding options, like next day deposits.
• Chargeback protection: Look for a payment processor that offers robust chargeback protection tools and strategies to help you prevent disputes and minimize losses.

Get integrated payment processing for your vape shop with Lightspeed

Integrated payments mean your point of sale and payment terminal communicate with each other. Because you don’t have to keep manually going between your systems to finalize a transaction, there’s less chance for human error during the process.

With Lightspeed, your vape store can get PCI-compliant integrated payment processing with built-in protection. Lightspeed works with our high risk payment processor partner 2Accept to offer vape stores secure, integrated payments with next day funding, chargeback protection and fraud monitoring. We don’t turn down vape stores for selling legal products, unlike some other payment processors or point of sale systems.

Capital funding for your vape store

Payment processing isn’t the only place vape stores run into roadblocks. Getting business funding for opening or growing a high risk business isn’t always easy. Without access to adequate capital, vape businesses can struggle to launch, expand or even manage day-to-day operations. This can limit inventory, hinder marketing efforts and prevent crucial upgrades, ultimately stunting growth and competitive edge.

Lightspeed Capital: fueling your vape business growth

Good news: we can help you out here as well. Lightspeed Capital provides business funding to vape stores looking to grow the business, finance new projects and maintain cash flow. 

Here’s how it’d work:

1. Eligible retailers are given an option for a merchant cash advance—our Lightspeed experts do the leg work on what they can get and the terms
2. Once accepted, funds are deposited in your bank account
3. Your Capital cash advance is paid back through a percentage of daily sales, with no compounding interest or scheduled monthly payments

A wide and varied inventory…. But how to manage it?

The vape industry is characterized by a dizzying array of products: e-liquids with countless flavors and nicotine strengths, diverse hardware options and a constant influx of new devices. This complexity is compounded by the ever-present threat of regulatory changes, which can suddenly render certain products obsolete or illegal. 

Vape retailers face the daunting task of managing this dynamic inventory while ensuring compliance and meeting customer demand. Without a robust inventory management system, you risk stock discrepancies and inefficiencies that slow down sales and increase costs. This can lead to overstocking of slow-moving items, tying up valuable capital, or, conversely, frequent stockouts of popular products, resulting in lost sales and frustrated customers. Manual inventory processes are prone to human error, making it difficult to track product variations, nicotine levels, and compliance requirements accurately. This can create a significant headache during audits and make it challenging to adapt quickly to new product trends or regulatory shifts.

You need an inventory management system that’s flexible, easy to update and designed to handle frequent adjustments. A modern POS with a built-in inventory framework ensures that your business remains adaptable.

Lightspeed’s dynamic inventory management for vape retailers

Lightspeed’s vape POS provides dynamic inventory tracking that keeps your stock organized and ready for rapid adjustments. It helps you track stock, update products in bulk and keep your shelves full of what vapers want.

Product regulations can change fast for vape stores

Imagine a provincial government suddenly imposes a flavor ban on all e-liquids except tobacco, mint and menthol, effective immediately.

Here’s how Lightspeed helps them manage the situation:

1. The retailer learns of the regulation. They immediately access their Lightspeed POS system.
   • Using the bulk edit feature, they filter their inventory by the affected flavor category.
   • They quickly pull the products from all their locations and online stores, preventing further sales.
2. Lightspeed automatically updates inventory counts, reflecting the removal of the banned products. 
   • Then, thanks to customized reporting, Lightspeed generates reports showing the remaining stock of affected items, allowing them to plan for returns or disposal.
3. Now that the banned products are off the shelves, our vape retailer needs a way to fill those empty spots with compliant products. 
   • Lightspeed’s reorder point alerts notify them about low stock on compliant and popular items, helping to prevent stockouts during the transition. They can easily generate purchase orders for replacement products from approved suppliers.
4. Our vape retailer uses Lightspeed’s sales reports to analyze the impact of the regulation on their revenue. They identify alternative products that are gaining popularity and adjust their inventory accordingly, helping them weather the storm of regulatory uncertainty.

Ensuring compliance with age verification laws

Vape products are age restricted, but not every POS system integrates with reliable age verification tools. Relying on every employee manually checking ID at payment can run you afoul of the law. In Canada, for example, the minimum legal age for purchasing vape products varies by province, ranging from 18 to 21 years old. Failure to comply can result in significant fines and legal penalties for retailers.

Seamless age verification at the point of sale

So you need a POS system that helps you comply with the law—Lightspeed partners with Hyperspace for that. 

When a customer is ready to make a purchase, Hyperspace age verification ensures compliance. At checkout, the system automatically prompts the cashier to scan the customer’s government-issued ID. Hyperspace instantly verifies the date of birth and confirms compliance before allowing the transaction to proceed. If the customer does not meet the age requirement, the sale is blocked—helping retailers avoid fines and legal issues. 

Loyalty and community building 

In the competitive vape market, building a loyal community is paramount. On average, existing customers spend 67% more than new customers, and a 5% increase in customer retention can lead to a 25% to 95% increase in profits.

However, vape retailers face unique challenges due to marketing restrictions and industry perceptions.Vape retailers are restricted on what mediums they use to communicate with costumes, and due to advertising restrictions on platforms like Google, Facebook and Instagram, traditional paid promotions aren’t always an option. 

This means vape retailers need to rely on: 

• Emails marketing, when legal, to get the word out
• A strong loyalty program to encourage repeat purchases and brand advocacy
• In-store promotions to encourage curious shoppers to convert
• An impressive customer experience to get them to come back 

Vape marketing: loyalty and email

Having strict regulations on what you can and can’t say, to who and where you can say it… that adds up to a lot of time spent on marketing, fine tuning your message, tactics and audience.

That’s where Lightspeed comes in. Being in a high risk industry, you’ll always need to spend a little extra time to ensure legal compliance, but you can streamline and speed up the rest of your marketing efforts to take some of your time back.

Vape shop marketing with Lightspeed Advanced Marketing

Vape marketing: the in-store experience

Loyalty extends beyond rewards programs. In the vape industry, customer education is crucial for building trust and ensuring compliance. A positive in-store experience can significantly enhance customer satisfaction and foster stronger emotional connections with your brand, driving repeat visits and long-term loyalty. Customers who have a positive in-store experience are more likely to return and recommend the business to others.

Elevating the in store experience with a mobile POS

With legacy systems, any time your employees need to look up an item, they have to return to the front counter. Lightspeed being cloud-based means all your inventory data is portable—your sales associates just need an iPad in hand.

To see why this is so important, let’s go over a sale. A customer has entered your store for the first time—they’re looking to switch from smoking to vaping, and they’re not entirely sure what all they’ll need. Because you have Lightspeed, your sales associate grabs an iPad and gets started.

1. They start at the top: the vape itself. Your sales associate gets a feeling for your customer’s desired price point, and looks up all the vape pens within it on the Lightspeed app.
2. As the customer reviews their options, your sales associate checks the description on one of the pens’ inventory entries. To help your employees give your customers the best possible service, you’ve added names of related products in the description of many items. Here, your sales associate sees a list of e-liquid compatible with that pen; they go through each item on the list with your customer, ensuring they have what they need.
3. When it comes time to ring the sale up, your sales associate makes the customer a customer profile. In the notes on the profile, they list their vape pen and their preferred price point. The customer mentioned being interested in a vaporizer pod system in the future, so your sales associate makes a note of that as well.
4. Around the same time the next month, the customer returns. A new sales associate looks up their customer profile and checks the purchase history. They recommend compatible e-liquid and mention a sale on vape pods, in case the customer is ready to try that out as well.
   Because Lightspeed stores that data, it doesn’t matter that this is the first time the customer and this particular employee are meeting—they’re able to offer personalized service that doesn’t over- or undersell the customer on anything they might need.
   

Lightspeed helps your sales associates make customers feel like they have an incentive to keep shopping with you, month after month: a trip to your store means they’ll be treated like a regular, not like an anonymous sale.

For an extra edge: data and reporting

In the highly competitive vape market, where product trends shift rapidly and marketing claims are heavily regulated, data is your most valuable asset. Retailers who leverage data analytics can gain comprehensive customer insights, optimize merchandising across channels, and streamline their supply chains. The global retail analytics market is projected to reach $18.33 billion by 2028, highlighting the increasing recognition of data’s importance in driving growth. For vape stores, this means understanding which flavors are trending, which hardware sells best and how to adapt quickly to new regulations, all of which are made possible through robust data analysis.

Data driven decisions with Lightspeed reports

Lightspeed’s cloud-based reporting provides real-time insights, allowing you to react quickly to market changes and stay ahead of the competition. Trends can change fast, especially when a consumer favorite is targeted by regulations. Understanding sales performance is crucial for making informed business decisions in those moments. 

Lightspeed’s sales performance reports provide granular insights into product popularity, customer behavior and overall revenue. This data empowers you to identify emerging trends, optimize inventory and tailor your messaging strategies.

Key Lightspeed reports for vape retailers

How to use Lightspeed reports to drive sales

1. Identify a trending brand.
   • A vape store notices a surge in sales for a specific e-liquid brand using the “Sales by Product Category” report.
   • They increase their order quantity for this brand to prevent stockouts and capitalize on the trend.
     
2. Clear slow-moving inventory to make room for the better performing stock.
   • They use the “Dusty Inventory” report to identify older device models that are not selling well.
   • They implement a limited-time discount on these devices to clear stock and make room for new products.
     
3. Set an automated report to keep an eye on it.
   • Using Advanced Reporting, the shop manager schedules an automated monthly report on sales. 
   • With this information, they’re able to react much quicker to changes in trends and preferences.

Vaping the Way boosts sales with business intelligence from Lightspeed

Vaping the Way is one of Saskatchewan’s leading vape shops, started out of a single location in 2014. After merging with another company in 2015, they expanded into a rapidly growing multi-store business. According to General Manager Kevin Millama, “things are getting better, year over year, month over month.”

A longtime Lightspeed user, Vaping the Way began delving deeper into their business data for buying, selling and employee appraisal. With the business taking off, the team knew that they could take it further. 

But their reporting capabilities were being outstripped by their success: “all we looked for as far as whether it was working or not was our profit margins, as long as they were fairly accurate, or our sales, customer transactions, things like that.”

So they turned to advanced data from Lightspeed, which has changed how Vaping the Way runs their business. Reports on products commonly bought together inform their sales strategy, helping their staff upsell and meet new bonus targets, and by running category reports, they’re now able to track their superstar products.

Easily managed ecommerce

Vape retailers face unique legal complexities when selling online, including age verification requirements and shipping restrictions. Ensuring age verification online is a significant challenge, leading some retailers to prioritize in-store sales. 

As a result, most vape retail takes place in a brick and mortar store. But our research at Lightspeed finds that even if customers ultimately purchase in-store, they often begin their research online, with a retailer’s website being invaluable to the purchase journey.

An ecommerce store provides a valuable platform for showcasing your products, educating customers and building brand awareness. Moreover, it adds a crucial additional revenue stream. 

So you should go online, but you’re going to have to spend a little more time verifying the legality of shipping various orders than a shoe store would. That’s why you want your online store to be easy to manage: you want to be able to dedicate bandwidth to your compliance, not micromanaging your site. 

Launch your vape ecommerce store with Lightspeed

Lightspeed’s omnichannel system has you covered—your inventory management, for example, all happens on the same platform, making it easy to get your eCom store up and running.

Here’s how fast it is to take your vape shop online with Lightspeed:

1. Start with an instant site.
   • With Lightspeed eCom, you can launch a professional-looking online store quickly and easily.
   • Choose from customizable templates and add your branding to create a unique online experience. Bam, you’re up and running with a fully coded site.
   • No need for extensive technical expertise; Lightspeed simplifies the setup process.
     
2. Get your inventory online. Take your payment processing online, too. 
   • Your online store is seamlessly integrated with your Lightspeed POS system, ensuring accurate inventory levels across all channels.
   • Any changes made to your inventory in-store are automatically reflected online, and vice versa. This eliminates the risk of overselling or stockouts.
   • You can also integrate with reputable payment gateways that support high-risk industries.
     
3. Set up age verification. 
   • Lightspeed eCom allows you to integrate age verification tools to ensure compliance with legal requirements.
     
4. Manage your shipping options.
   • Set up flexible shipping options and calculate shipping costs in real time.
   • Integrate with shipping carriers to streamline the fulfillment process.

That’s it. You can be up and running right away.

Your secret weapon: automation (and more)

Vape shop owners are constantly navigating a complex industry with evolving regulations, diverse product lines and discerning customers. Your POS system shouldn’t add to the burden. 

Lightspeed offers powerful automation tools that streamline operations, reduce manual tasks and free up time for what matters most: growing your business.

Let’s look at three examples.

Growing with Lightspeed—scale your business 

The vape industry, while challenging, offers immense opportunities for growth with the right tools.

Lightspeed provides a comprehensive solution designed to address the specific needs of vape retailers, from securing reliable payment processing and capital funding to streamlining inventory management, ensuring compliance with age verification laws and fostering customer loyalty.

By leveraging Lightspeed’s powerful features, vape shop owners can overcome common hurdles, operate more efficiently and focus on building a thriving and compliant business.

Watch a demo of Lightspeed in action