When you grow or sell cannabis, getting paid is an integral part of the business model. Unfortunately, it might not always be a given that a customer is going to pay money for your product. Whether you run a full-fledged cannabis dispensary, or you’re just selling a few ounces of some quality bud, you need to be aware of some warning signs that your customer might not stay true to their word and make good on their purchase. Here are four signs your cannabis customer is not going to pay you.
1. Warning Signs of a Non-Paying Cannabis Customer
There are numerous warning signs to watch out for that may indicate an individual may not be a reliable customer or pay for cannabis services. Pay close attention to the customer’s behavior and be proactive in establishing clear understanding of expected payment terms.
- Little or No Interaction: No dialogue or interaction around the services or payment terms indicates the customer is uninterested in the cannabis services offered.
- Poor Negotiations: Customers that are unable to meet in the middle or agree to payment terms can be a sign of potential non-payment. It’s important to gain agreement on payment terms prior to providing services.
- Questionable Prepayment: Extremely large deposits or prepayments without clear understanding of the payment terms can be a sign of potential non-payment in the future.
Having procedures in place to monitor customer payment behavior can help early identify the potential for a cannabis being served who may not be able to pay. This can help to mitigate the risk of non-payment later on in the relationship. Monitoring customers credit score, cash flow and any potential changes in lifestyle can also provide the advantages of maintaining a healthy customer portfolio.
2. What to Look Out For When Dealing With Cannabis Consumers
When dealing with cannabis consumers, it is important to keep in mind that the potency of different strains can vary significantly. There isn’t any way for the consumer to know what the exact potency level is. For example, two different joint rolls might appear to be the same size but could have drastically different levels of THC. You should always recommend lower potency items if the consumer hasn’t had cannabis before, as they will be more likely to have a better experience.
Before tasting or dealing with any cannabis products, it is important to keep safety in mind. Take into account the product packages, the storage conditions of the product, and how the product has been handled. Different delivery methods can also vary in the precautions needed:
- Smoking: The cannabis should be tested for harm-reduction chemicals and mold.
- Vaping: Products must be advertised and labeled correctly to ensure that users understand the potential risks.
- Edibles: Consumers should not consume edibles on an empty stomach. Labels should be checked to ensure that consumers understand the quantity and level of THC per edible.
It is also important to warn consumers about the potential side-effects associated with the use of cannabis products, such as dry mouth, red eyes, anxiety, and dizziness. With all of the potential risks that come with dealing with cannabis consumers, understanding the need for careful researching and education can mean the difference between a positive or negative outcome.
3. How to Avoid the Costly Pitfalls of Unpaid Cannabis Purchases
Making use of online resources and carefully reading the details of contracts ahead of time are both essential steps for avoiding the costly pitfalls of unpaid cannabis purchases. It can be a stressful situation – when a customer doesn’t pay or they don’t pay in a timely manner – but it doesn’t have to be. Here are some smart moves to stay on top of it all:
- Make Use of Online Resources: There are several helpful online resources that you can access to purchase and invest in cannabis products. Research the different options before deciding which method to use, as each resource comes with its own set of risks and rewards.
- Be Aware of the Contract Terms: It’s critical to carefully read and understand any contract terms prior to making any purchases. Familiarize yourself with the payment instructions and pay special attention to any potential risks. In addition, make sure to know who owns the product, as well as how long the payment terms are.
- Invest in Inventory Insurance: Investing in inventory insurance is another must if you want to protect yourself from losses due to unpaid cannabis purchases. Even if a customer pays in a timely manner, there is still a risk of something going wrong – such as a shipment being damaged or delayed. Inventory insurance can help you recoup your losses in this case.
- Stay Proactive: Once you make a purchase, stay on top of the situation by proactively monitoring payment status. Send follow-up emails, phone calls, or other forms of communication to ensure that payment is received or being processed in a timely manner.
Following these tips can help you avoid the costly pitfalls of unpaid cannabis purchases and keep your business running smoothly. It all comes down to taking the right precautions before making a purchase and staying proactive once it’s made.
4. Strategies for Navigating Uncollected Cannabis Payments
When it comes to collecting unpaid cannabis payments, there are a number of tried and true strategies that are invaluable. Here are four go-to strategies to keep in mind:
- Be Proactive: When payments are due, contact buyers right away with a polite yet firm reminder that payment needs to be made in a timely fashion. The quicker a customer or client is made aware that payments have gone uncollected, the more likely you are to receive compensation.
- Send Multiple Notices: Another strategy for navigating uncollected payments is to send multiple notices to customers. Sending an invoice and reminder message via email works well but also be sure to follow up with a physical copy of the invoice and include a self-addressed, stamped envelope for convenience.
Being persistent and consistent with reminders is key in getting customers to pay up, but if that doesn’t do the trick, it may be time to escalate your approach. If clients or customers are unresponsive to numerous attempts to collect the debt, you may need think to outside the box and consider taking legal action.
We hope this article has opened your eyes to the tell-tale traces of a cannabis customer who might not be able to settle their debts. Being aware of the signs will help ensure your business thrives, and your payments are always taken care of.