Shopify for Cigar Shops - Many Questions

[caspercigar]

Currently a Shopify customer for e-commerce, but haven’t taken the leap to their POS. Currently evaluating & have several questions…

1. We mostly understand Shopify’s tobacco restrictions - currently use a 3rd party gateway with their site that seems to work well, and assuming that same vendor could likely replace Shopify Payments on the physical system as well?  Little leery about shifting policies, as we were onboard with Square originally, who changed their tune midstream after several assurances that all was well - started turning off accounts at other stores we knew and didn’t have a good handle on their own policies for whatever reason. Created a hair on fire nightmare separating from their ecosystem at the drop of a dime. Can we be assured the terms will not change unexpectedly? 

2. Data conversation from existing POS. My experience has been that a) every POS company tells you it’s no big deal, and then b) everything ends up being a big deal and you lose a ton of data that ends up in hours upon hours of manual changes. Currently use “POS Nation”, which is a white label reseller for Heartland Capital’s Cash Register Express. 

3. Dynamic inventory from the POS to the website is critical with who we choose. Square did it, and I’m assuming Shopify does too - but we have two anomalies I’m wondering if there’s a workaround for.  First, we have customers that run tabs/hold tickets - could be as simple as a customer who’s in for a few cigars and wants to check out after they’re finished, or could be a heavy regular that puts stuff on a tab for a couple weeks and settles up on payday. In other systems those items are still in inventory until they are paid, which would leave the potential for limited quantity items to display on the site and be sold when we actually don’t have them available. Second, tobacco taxes are different for people in-state vs out of state. To be competitive online, we have to price items at MSRP or below, which is unavailable to in-state customers that require a 20% excise tax to be submitted to the state + sales tax. Sales tax is also exempted for out of state customers. I assume the price in the POS is the price on the site and there’s no way to price differently out of state? Any creative workarounds or plug-ins that accomplish the differentiation?

4. We run a membership program, where members pay an annual fee to have access and a locker to store their products. We need the ability to associate their membership with their name in the POS to apply an automatic 10% discount on all transactions. We also run a loyalty points program, where any customer can accrue points based on spend and use to get 10% off rewards in a single transaction. Shopify POS can accomplish same  I assume?

5. Marketing add-ons similar to Square, I assume? We used to use their text coupons and email marketing, which is a weakness of our current provider. 

6. It’s possible we will be starting up an additional business next door that would focus on more “smoke shop” type items, but effectively run as a 2nd terminal and extension of the core business on the backend. Where does Shopify and 3rd party gateways stand on other tobacco products, hemp/Delta & accessories, vape, etc.? All would be legal to sell in our city/state, and not carried over to the online portion of our business, site would remain tied to the cigar & pipe tobacco business - POS only. 

Thanks in advance for sharing knowledge. 

[Shay]

Hi @caspercigar 

Thank you for reaching out to the Shopify Community with your questions. I'll be happy to answer what I can here, and then I am going to refer you to our dedicated retail support specialists to chat with some more. 

Tobacco restrictions on the Shopify platform and policy changes:

Tobacco products are accepted products that can be sold via the Shopify platform, so long as you are also following your local laws and requirements for age restriction, etc. Using Shopify for your business is fully supported. Our terms of service could change at any time, but the chances of us changing that policy is very slim. We work with a lot big companies and are the go to platform for cannabis sellers, recently partnering with Aurora Cannabis. I understand those are two different products, but if we support the sale of cannabis, then it's safe to say we will continue supporting the sale of tobacco as well.

Data conversation from existing POS:

I am not familiar with the ins and outs of moving data from one POS to another. Shopify does allow you to import customer data and depending on the platform you are moving from, you may be able to use a prebuilt app or custom integration to assist with the data transfer. If that is not an option you will be limited to what can be imported via CSV files. 

Getting started with your store migration - Import Store Data

Inventory Management - Product holds and tabs

Changing inventory quantities (Shopify admin) · Shopify Help Center - Shopify offers what we refer to as inventory states, allowing you to have product in an "unavailable" state that is not available for sale, but is also not yet sold. That combined with the ability to create draft orders should allow you to create orders similar to a tab experience. You can see the pending orders in the customer profile (so long as the customer is properly attached to the draft order) and they can either settle in store or you can send them an order invoice via email and they can settle up online. 

Product pricing online/out of state/in store differences:

To summarize what you stated, would you confirm that this is correct?

Online products are sold at MSRP or below, and out of state customers do not pay taxes on these items. 

In store and in state (online) customers pay a 20% excise tax + sales tax. 

Regardless of the taxes being charged, is the base price for the product same for both online orders and in store purchases? Or is the base price for those products different? 

You can set up your tax rates to charge various amounts based on customer location and if they are buying online or in store, that is not an issue. But if you do need to have different product prices, that is a bit more complicated. The easiest from a platform point of view would be to have two versions of the same product, one available online and one available in store. But tracking inventory for limited products would be much more complicated. I recommend chatting with our retail support team directly for more help with that question. 

Loyalty programs

At this time Shopify does not offer an in house loyalty/subscription/points service. For this functionality you would need to integrate a third party app that provides this for you. 

An app like Smile: Loyalty and Rewards is incredibly popular and trusted by many merchants to provide this experience. It also integrates with the Shopify POS system. I definitely recommend checking them out and contacting their support team to see if they would be a good fit.

Marketing and promotions

Shopify offers a very easy to use in house email marketing solution, but you can also expand on that by integrating a third party marketing solution for emails and SMS: Best Email Marketing Apps. 

Additional products smoke/vape/cbd

Great question! Shopify, the platform, allows and supports the sale of these products so long as local laws and regulations are being followed. For selling hemp or hemp derived products, please review this page in our Help Center and the attached documents for more information: Selling CBD on Shopify in the United States (US) · Shopify Help Center. 

The most difficult aspect of this question will be coming to an arrangement with your payment gateway(s), as that is where the most restrictions come in. Payment gateways are beholden to the banks that power them and not all banks are willing to accept the risk of processing payments for these types of products. You will need to work with a high risk payment gateway for your business and come to an agreement with them on the nature of the products you sell currently and wish to expand to. 

Shopify offers Shopify Payments to eligible merchants, but tobacco and smoke products are not accepted through our payment gateway. I can recommend these gateways as an alternative to connect with:

Bankful 

• General high risk products, including sale of vapes: https://bankful.com/shopify-partner/
• CBD Products: https://bankful.com/shopify-cbd/

Authorize.net 

• No longer supports payment processing for firearms, ammo etc.

• Does not support vapes

First Data Payeezy (Clover)

Available in the USA and CA, does not support firearm sales.

For in person sales, you will want to ensure that your payment gateway supplies or supports a third party card reader. You can connect the card reader to your Shopify POS terminal to collect payment from customers, but the POS will not directly track the payments as they would be processed by the third party. You would collect payment through the card reader then mark the order as paid in the POS. 

For additional questions about moving from one platform to another for your physical store please reach out to our retail support team for further assistance. To do so, you can create a free merchant account (required) and then sign into our Help Center: Shopify Help Center. Next, you will want to follow the on screen prompts and select Store Management > In person/Shopify POS. On the last page you will be provided with all available support options including the ability to call and chat with one of our retail specialists. 

[PairingsCB]

Hi Shay

can you provide an update on Shopify in terms of selling cigars online? We have an authorized.net account that we currently use with our other e-commerce platform but we are looking for another one that is easier to use.  We can transfer the authorize.net account to another site I am assuming.