Handling cannabis product returns can take a bit more strategy than typical retail returns due to the legality and compliance requirements involved in the process. However, there are a few things to consider before creating and communicating your return policy to your customers.
The laws in the U.S.
Since cannabis is still federally illegal in the United States, it is all dependent on the state location and the dispensary policy. For example, in California Dispensaries: “A licensed retailer may accept customer returns but may not resell the returned cannabis goods. The returned cannabis goods may be destroyed or, if defective, returned to the distributor from which they were obtained.”
A good rule of thumb is to create a policy and stick to it. That policy should enforce state compliance and remain consistent with POS inventory and your Cannabis Tracking System (CTS). In addition, if you keep healthy relationships with your distributors, they can help with the financial aspect of returns.
Returning products such as flower, pre-rolls, edibles, concentrates, and extracts can be tricky due to individual state compliance and the sometimes questionable nature of consumer return requests. Yet, it is also essential to have an internal policy to allow for the return of contaminated products if a consumer reports an issue that slipped past thorough testing.
Create a safety net
Most dispensaries have a policy specifically for cartridges due to the technical nuances of the product. Keep reasonable variables in mind when creating this policy, so it is easy to adhere to it in the future. It doesn’t mean you should return a cartridge that leaked because it was left in the hot sun, nor does it mean you should accept a return on a fully smoked item, but in a batch of 100 cartridges -- there is a chance that a few may fail. Regard this policy as a safety net for those instances. Customers may get upset if they find out some exceptions to the rule were made for others without understanding the reason.
Example return policy
What is your return policy?
Due to state regulations, we cannot accept returns on cannabis products.* We can, however, exchange defective cartridges so long as:
- You bring the return in within three days of purchase.
- You have the original packaging.
- You have the original receipt.
- 50% of the product is remaining.
*Exception: Consumers can return products if the product condition doesn't meet the store's regular testing standards.
The laws in Canada
Similar laws apply in Canada, where the legality is dependent on the cannabis retailer’s province. The independent online journal Inside the Jar did an article on returns in Canada. They explained a similar system to the one typically used in the US:
“Most private stores and government-run retailers use a similar return policy for cannabis. The Société Québécoise du Cannabis (SQDC), Alberta Cannabis, the Ontario Cannabis Store (OCS), and BC Cannabis Stores all allow for returns or exchanges of product that was delivered by mistake, recalled, or defective in some way.”
Product returns are up to the discretion of the store, their province, and their own particular set of rules. It may be best to follow a policy similar to those listed above and give clear direction for specific circumstances so lead staff can address these situations without a manager present.
Former Dispensary Manager and Dutchie Support Trainer, Tawyna Knight, gives us tips for processing returns from start to finish.
- Keep a written or digital return log to track all consumer returns to make it more straightforward when creating a return manifest (CTS). Pro tip: This capability is built into select POS systems to simplify tracking. Be sure to ask your POS rep about it!
- Ensure you know which vendors will accept returns and their requirements so you can request reimbursement on some portion of your purchasing fees.
- Use a single package tag on your return manifest for all returns to a vendor or distributor. It will not only reduce work, but it will also reduce your need to purchase more METRC package tags. (If you are not one of the 16 US states* that uses METRC, reach out to your CTS advisor for tips on how to best execute this in your area.)
- If you sell non-cannabis accessories such as batteries for vape cartridges, allow for a generous return policy when those items are defective and stand behind the policy. Since these products are less regulated, it will create more customer loyalty and repeat business.
- Educate your customers at the time of their purchase to reduce possible returns. User error is one of the most common reasons for returns, and you can mitigate that by providing better education at the time of the sale.
- Educate your employees on your return policy, print it on your receipts, and post it in your store if you are a walk-in retail location.
- If you cannot return the item to the vendor, the inventory must be transferred and destroyed.
*These 16 states use METRC as their CTS: Alaska, California, District of Columbia, Colorado, Louisiana, Maine, Massachusetts, Maryland, Michigan, Missouri, Montana, Nevada, Ohio, Oklahoma, Oregon, and West Virginia.
Communicating with the customer
Be sure to express an apology if they were not personally satisfied with the product, but also don’t be afraid to frame it within the confines of the law. Explain the legality of returns to the customer and offer them what you can do to enhance their experience. Consider this an opportunity to find a better product that will give them a different result. Let them know you are working for them and ask questions to understand better their desired effects.
In the world of black market cannabis sales, most dealers wouldn’t give their customers a refund. Most people wouldn’t consider this a harsh reality. Yet, adherence to these rules keeps these incredible businesses alive and thriving. The customer still gets the experience of purchasing a multitude of different cannabis products in a retail environment. If you can communicate the information in a way that expresses you are on the customer’s side, you can keep their trust and navigate them to a new product.
Cameron Taylor, our Compliance Research Associate, talks about how you can address returns without it hurting your bottom line:
“It really comes down to the vendors themselves and managing those relationships. Producers of items like carts and non-cannabis goods commonly have a return policy for defects. But METRC allows the return transfer of all product types. I regularly would work out return policies for other producer types, especially edible companies. Arranging a buy-back rate for goods that can spoil can have a pretty significant impact, especially for shops on pretty limited purchasing budgets. Flower is a lot less common, but even there, you could end up with some recalled product for one reason or another that results in the need to process a vendor return.”
He also goes on to clarify that “regulators in every market have rules against reselling previously returned product.” Using California as an example again, the Bureau of Cannabis Control states how to destroy returned products. He explains that some dispensaries make the personal choice not to accept returns to avoid the headache of dealing with potential scammers.
Communicate your policy clearly to a customer when they first arrive at your store. Put a reminder on the receipt for their future reference. Educate your budtenders on the procedure so they can confidently handle returns in most situations. Tell them to give your customers advice on storing their products (like keeping live resin refrigerated and cartridges out of the hot sun). All these tips will lead to them still having a good experience, even if something goes wrong with a product.
- Defer to a compliance specialist or reach out to your CTS’s support staff if you do not understand a particular cannabis product rule.
- Remain calm but consistent in navigating returns with the customer. Make exceptions only in severe or defective cases.
- Track everything for both your POS inventory, CTS, and your business budget. Note brands that cause a high number of returns and inform them so they can improve their product. If they don’t improve, consider taking a hiatus from that brand.
- Reach out to vendors for additional help if you need it.