Accounts dropped without warning. Compliance risks. Sky-high transaction fees and hidden costs.
If you’ve been running a smoke shop, cigar lounge, or tobacco store on a generic retail point of sale (POS) solution, you’re probably familiar with these challenges.
But there’s good news: You can protect your thin profit margins and avoid these hassles by switching to a specialized tobacco payment processing tool.
In this blog, we’ll cover:
- What to look for in a tobacco payment processor
- All-in-one tobacco POS and payment processing solutions
- Standalone tobacco payment processing tools
Let’s dive in!
Why Tobacco Shops Need Specialty Payment Processing
If you sell cigars, cigarettes, loose-leaf tobacco, or vapes, generic retail payment processing simply won’t cut it. You face challenges like:
- Strict regulations: Tobacco shops are required to stay compliant with strict federal and state laws regarding age verification, reporting, and taxes.
- High-risk merchant categorization: Retailers that sell tightly regulated products like tobacco and vapes are often labeled “high-risk,” making it more difficult to get approved for services.
- Higher processing costs: High-risk retailers generally pay higher per-transaction fees and other costs, such as chargebacks and fraud protection.
- Unexpected cancellations: Many tobacco retailers have had their merchant accounts frozen or cancelled without warning, bringing their sales to a screeching halt.
Fortunately, the right tobacco payment processor can help you avoid these headaches.
Our number-one recommendation is to look for an all-in-one tobacco POS and payment processing solution. This gives you access to features and payment processing tools specifically designed for high-risk businesses.
You’ll get compliance-friendly features like built-in age verification, cost-saving options like dual pricing, and advanced fraud protection. Plus, you’ll have access to a support team that understands how your business actually works.
All-in-One Tobacco POS and Payment Processing Solutions
Before we dive into our list, let’s talk about what to look for in a tobacco POS system and payment processing solution. Must-have features include:
- Age verification: Scan IDs to prevent underage tobacco sales.
- Compliance-friendly reporting: Maintain thorough sales records, inventory data, and transaction logs to stay ready for audits.
- Tobacco inventory management: Track tobacco inventory in real time by the carton and pack, and automate the purchasing and receiving processes.
- Configurable state tobacco tax rates: Apply correct excise taxes automatically.
- Built-in marketing tools: Boost sales with a customer loyalty program and promotions.
- High-risk payment options: Sell tobacco, vapes, and other products like CBD and delta-8.
- Dual pricing: Keep payment processing costs low by passing on transaction fees to your customers.
- Flexible payment options: Accept cash, card, and contactless payments.
- Support: Get fast, expert support during onboarding and beyond to solve technical issues before they impact your bottom line.
Now, let’s take a look at three tobacco payment processors that fit the bill.
Related Read: Is Dual Pricing Right for Your Tobacco Shop? 7 Considerations
1. Cigars POS: Best All Around
Cigars POS is an all-in-one POS and payment processing solution designed specifically for smoke shops, cigar lounges, and tobacco stores. It’s cloud-based, so you can access your software from any internet-connected device.
Cigars POS’ payment processing solution includes easy dual pricing, interchange-plus or flat transaction fees, and offline payment processing capabilities.
Along with payments, Cigars POS includes:
- Powerful inventory automations like auto PO and simplified receiving
- A built-in customer loyalty program
- Integrations with Bandyworks, Shogo, and more
Get a custom quote for tobacco POS software, hardware, and payment processing using our Build and Price tool.
2. Lightspeed: Best for Multilocation Tobacco Shops
While it’s not purpose-built for tobacco retailers, Lightspeed is a solid option if you run a growing chain of smoke shops or cigar lounges. Their cloud-based software is designed to help you sell in store and online.
Lightspeed Payments accepts all major credit cards, as well as Apple Pay and Google Play. Like most of the options on our list, their payment processing solution is PCI-compliant and encrypted.
Lightspeed’s other features include:
- Multilocation inventory syncing and consolidated reporting
- Built-in e-commerce and website-building tools
- In-depth reporting and demand forecasting
Lightspeed’s payment processing rate is 2.6%+ $0.10, and their software subscriptions range from $109 to $339/month.
3. KORONA POS: Best for Flexibility
KORONA POS is a retail POS solution with a focus on tobacco and vape retailers.
The main appeal of KORONA POS is flexibility. It’s processor-agnostic, so you can use it with nearly any payment processor. This also means you can change processors at any time without having to migrate to another POS system.
KORONA POS’ other key features include:
- Personalized SMS promotions
- A built-in customer relationship management (CRM) system
- Employee time and activity tracking
KORONA POS’ pricing options start at $59/month.
Related Read: How To Prevent Downtime During a Smoke Shop POS Migration
Standalone Tobacco Payment Processing Tools
Happy with your POS system but just need a new payment processor? These providers offer high-risk payment processing services for tobacco retailers:
- PayKings offers high-risk merchant accounts to help you sell tobacco and vapes hassle-free. They offer interchange-plus pricing with fees ranging from 0.80% + $0.10 to 1.10% + $0.25/transaction, depending on your transaction volume.
- MobiusPay offers payment processing for all types of tobacco stores. They’re PACT Act-compliant, which means you can use their processing to sell online and in store. They can also help you manage tobacco subscriptions and cigar club fees. Apply for an account on their website to see transaction fees.
- Vector Payments promises fast, secure, and affordable payment processing to brick-and-mortar and online tobacco shops. Get in touch with their sales team for a free quote.
While an all-in-one solution is still our top recommendation for tobacco retailers, the flexibility of a standalone payment process is convenient.
Get Started With the Best Tobacco Payment Processing
Ready to take the next step and get started with a reliable tobacco payment processing solution? We’ve got you covered.
Cigars POS is an all-in-one solution designed to help you process payments, manage tobacco inventory, and boost your profit margins. Along with commercial hardware, purpose-built POS software, and integrated payment processing, you’ll have access to our team of tobacco industry experts during onboarding and beyond.
Schedule your Cigars POS demo today to see it in action.
