The Automated Teller Machine (ATM) is an electronic telecommunication device installed to perform underlying financial transactions without direct interaction with the banking staff. An ATM extends excellent convenience and security with its smooth functioning and full availability.
Today, the ATM has become a part of our daily life as we find them in many locales, such as shopping malls, grocery stores, hospitals, restaurants, street markets, supermarkets, and even gas stations. The USA alone has approximately 4,00,000 ATM’s with over half of them owned by independent operators, a few by credit unions, and the rest is majorly owned by banks like JP Morgan, Chase, Wells Fargo, Bank of America, and Citibank.
Role of an ATM
An ATM provides access to secure cash and subsequently increases the spending power of the customers. Surveys and studies have reflected a direct correlation between the ATM installation and a spike in sales. As much as 20%-30% of sales increase has observed by the mere presence of an ATM in grocery stores, apparel sales, night clubs, or even drug stores.
While in today’s digital business, most of the purchases are made by card or online, the ATM user’s spending still stands 23% more than the non-users in the retail stores.
Having an ATM in your store increases customers footfall, builds business brand and reputation, enhances customer service, and provides increased earnings and revenue. Rationally, most of us prefer to keep a little amount of cash in our pockets as a security measure. Accessing the ATM’s located at a store can also attract customers to check out products and thus enhance sales.
ATM Machine at a Marijuana Dispensary
Medical and recreational marijuana sale is available in most of the US States in dedicated Marijuana Dispensaries. Though legal, these dispensaries are restricted from accepting credit or debit cards as a mode of payment as per federal regulations. It is extremely wise and profitable to provide your customers with easy cash access.
Considering that dispensaries currently are not able to use any other payment option, having an ATM on premises provides customers the convenience to draw cash on the spot. Apart from enhancing customer service, installing an ATM in marijuana dispensaries can contribute a great deal in increasing sales and revenue.
Firstly, the presence of an ATM increases foot traffic to the premises, which itself contributes to the sale increase. As per the purchasing patterns and buying decisions of the customers, they generally purchase from your store to find it non-obligatory to access the ATM.
Secondly, as already studied, access to cash boosts the spending capacity of the customers. Hence, the ATM in dispensaries has the ability to dramatically increases sales. Customers tend to either purchase optional and complementary products available on the shelf or multiply the quantity of the purchase.
Statistics prove that the funds withdrawn at ATMs are usually spent in the same store as they can now draw cash and continue shopping without leaving the premises.
The Profitability of Having ATM in Cannabis Dispensaries
Having an ATM in your premises supplements your profits and gives additional income. With every ATM transaction, customers pay a small surcharge ranging from $1 to $5. Mostly, this is averaged between $2 and $3; however; this charge may vary for different operators.
You can earn a decent amount, depending on the number of transactions your ATM generates over the month. Let’s take an example, if the ATM has processed around 500 transactions over the month, then the surcharge comes (if charged at a minimal of $1 per transaction)to $500, and that makes the monthly commission (if charged at $0.50)$250.
Costs Involved When Installing ATM
Automated Teller Machines do require some upfront costs. However, the investment would soon start giving returns. The price varies as per the machine but would range with a minimal of $1000 to a maximum of $25,000. There are different types of devices like countertop, built-in, dial-up, or wireless, and since the investment is high, it is critical to know the exact machine that suits your premises and purpose.
To quote a few, the free-standing ATM machine costs approximately $2,500 to $7,000, a built-in ATM machine costs roughly $5,000 to $10,000. If your budget is limited, then you may opt for a used or refurbished machine, which starts from $500.
Also keep in mind that there are additional costs for maintenance and repairs, receipt paper, cash loading services, telephony services, a surveillance camera, and invest in security software; however, they are one-time investments.
To sum it up, it wouldn’t be incorrect to conclude that adding an ATM to a marijuana or cannabis dispensary is a great idea to enhance sales, boost profits, deliver better customer experience, build a more extensive customer base, and earn additional income.
For example, you have invested $3500 on machine purchase + additional expenses of $500 (as mentioned above). Keeping the commission calculation of around $250 per month, it would only take 16 months to recover the investment cost, which afterword the entire income is sheer profit.
So make the most of your dispensary and get the ATM installed to reap the utmost benefits.