Choosing the right Point of Sale (POS) system is a critical decision for any cannabis dispensary. But equally important is understanding the contract that comes with it. A POS contract outlines the terms of service, responsibilities, costs, and obligations — and signing it without scrutiny can lead to long-term financial or operational headaches. Before committing, ask these 10 key questions to ensure you’re making a well-informed decision.
1. What Are the Total Costs — Upfront and Recurring?
Beyond the sticker price, make sure you understand the full cost breakdown. This includes hardware fees, software licensing, onboarding or setup charges, monthly service fees, and potential future upgrade costs. Ask if there are promotional rates that expire after a certain period.
2. What Is the Length of the Contract and Are There Auto-Renewal Clauses?
Many POS providers offer multi-year contracts with auto-renewal terms. Be sure to clarify how long you’re locked in and what happens when the contract expires. Are you notified before auto-renewal? Can you cancel without penalty?
3. Is There an Early Termination Fee?
If you decide to end the contract early — perhaps the system doesn’t meet your needs or another provider offers better features — what will it cost you? Some contracts include hefty early termination fees or require you to pay for the remaining months in full.
4. Who Owns the Hardware?
Find out whether the hardware (registers, tablets, printers, scanners) is leased or owned outright. If leased, what happens to the equipment at the end of the contract? Understanding this can help you avoid surprise charges or logistical issues during upgrades or transitions.
5. What Is Included in the Customer Support Package?
Customer service can be the difference between a minor hiccup and a day-long disruption. Ask if support is available 24/7, whether it’s included in the base price, and what support channels are offered (phone, live chat, on-site technician). Clarify response times for system outages or compliance-related issues.
6. Does the System Comply with State-Specific Cannabis Regulations?
For cannabis dispensaries, POS compliance is non-negotiable. Confirm the system is compatible with your state’s track-and-trace system (e.g., Metrc, BioTrack), offers real-time compliance alerts, and automatically enforces daily purchase limits or ID verification.
7. Can the POS System Integrate with Other Platforms?
If you rely on third-party apps for delivery, loyalty programs, or accounting, integration matters. Ask if the POS can connect with your existing tools — or if there are APIs available to allow custom integrations. Limited integration may restrict business efficiency.
8. How Is Data Ownership and Security Handled?
Your POS collects valuable customer, sales, and inventory data. Ensure that your dispensary owns that data, even if you leave the provider. Also, review their data encryption protocols, backup frequency, and disaster recovery process.
9. What Happens If the POS Goes Down?
Downtime equals lost revenue. Inquire about the POS provider’s uptime guarantees and if offline mode is available so you can still process transactions during outages. Reliable systems should include automatic syncing once connectivity is restored.
10. Can the Contract Be Modified or Customized to Fit My Business?
Some vendors offer rigid, standardized agreements. Ask whether the contract can be tailored — especially if your dispensary has unique operational needs, such as multiple licenses, locations, or specific compliance procedures.
Conclusion
Before signing a POS contract, take time to dig deeper. Asking these questions protects your business from costly missteps and ensures that the POS system you choose can scale, adapt, and support your dispensary’s long-term success. Don’t just accept what’s written — negotiate where needed, and consult legal counsel when in doubt.