Smoke shops are experiencing remarkable growth and transformation in the current market. Sales of vapes, e-cigarettes, and other tobacco products have increased, allowing smoke shops to bring in over $108 billion.
But inflation and tariffs make it harder for small tobacco shops to compete with convenience and grocery stores. Luckily, the right point of sale (POS) system can help.
Your POS system does more than simply process transactions — it helps manage every aspect of your store’s operations, from creating purchase orders and updating stock levels to tracking profit margins and managing customer loyalty.
That said, there are a lot of POS solutions out there, and not all of them are a good fit for tobacco retail. The last thing you want to do is rush into buying a system that isn’t useful or, worst-case scenario, stops supporting tobacco sales altogether.
But, with so many systems to choose from, how do you narrow down your search? Your best bet is to go into the process with a solid understanding of which features your tobacco store needs and, more importantly, which ones you don’t.
Here’s a breakdown of the top tobacco POS features to look for, and why POS systems built for generic retail might leave you in the dust.
Getting a tobacco store off the ground can be a daunting (and expensive) task, and many owners looking for a POS system rush into buying an affordable, “good enough” system.
Unfortunately, those owners find out the hard way that these systems aren’t a good fit for their business and ultimately waste money on software fixes or replacements.
Why? Because tobacco retailers have specific needs that other industries don’t, and not having tools to address those challenges can create real headaches. Here are some common challenges for tobacco shops:
While a missing feature here or there might not seem like a big deal, it does add up in the long run. Your best bet is to find a system that meets all your needs from the get-go.
Now that we’ve explained why many popular POS systems fall short for your industry, let’s get into the good stuff.
Here are the essential features to look for when evaluating tobacco POS providers.
Effectively tracking and managing your inventory is one of the biggest challenges for a tobacco shop, and the right solution can make it considerably easier.
At a basic level, an inventory management system digitizes your stock list and updates it automatically as you make sales. This in itself is handy, but here are some additional aspects of a tobacco store inventory management system to keep an eye out for:
While systems with advanced inventory features tend to be more expensive, they can save you hours (or even days) of work on manual invoicing and other data entry tasks.
We’ve seen it a million times: Store owners notice that sales are down, but don’t know why. Or, on the flip side, sales take an unexpected upswing, but they aren’t sure how to keep the momentum going.
The reporting tools on your POS system contextualize your sales and inventory data to help you understand different aspects of your store’s performance, like:
Periodically reviewing this data helps you improve your stocking choices, negotiate better terms with vendors, spot products to discontinue or discount, improve staffing schedules, and much more.
Some specialized systems, like Cigars POS, come with automated product ranking, which helps identify the specific items contributing the most to your store’s success. Auto ranking assigns a letter from A to D to all of your products, with A representing your fastest-selling items and D representing items that had no sales in the last 30 days.
Item rankings help you hone your stocking choices, identify items to discount or promote, and avoid reordering products that aren’t selling.
Selling tobacco is inherently a high-risk business. If you knowingly or accidentally sell tobacco to a minor, you can face fines or lose your tobacco license. Tobacco stores are also more likely to be targeted for theft and fraud than other retailers.
This is another area where your tobacco POS can help. Using integrated ID scanners lets staff scan an ID and verify it in seconds. Some systems also keep a record of ID checks for every transaction to make it easier to stay compliant and keep employees accountable.
Installing webcams at the register is a great way to keep tabs on any suspicious-looking transactions, too. Modern systems integrate directly with these webcams, tying footage to every transaction in the system — so if you see something in a report, you can quickly pull up the footage.
Combined, these features are a great addition to your tobacco store security setup.
Staffing your tobacco shop with friendly and trusted employees is a must if you want to differentiate yourself from the competition and build customer loyalty. However, you still need safeguards and productivity tools to keep your store running smoothly.
Look for systems that include employee clock-in and payroll features, so employees can start their shift right from your POS terminal. This also keeps a log of employee activity, so you can see who rang up certain transactions or created purchase orders, among other tasks.
Some POS systems also allow you to create a list of tasks (e.g. cleaning, stock checks, closing out) that you can schedule to automatically remind employees through the POS terminal or via SMS. This helps organize your employees and keep them accountable.
Protecting your business from fraud, errors, and theft is essential. Employee access controls ensure that every employee can only use the features they actually need to do their job.
Tobacco shops sell many items, including individual cigars, custom merch, and accessories that don’t have their own UPCs. This can lead to slowdowns or errors at checkout as staff have to manually input pricing (and it doesn’t update inventory levels).
Tobacco POS systems support the creation of custom barcodes and labels that fit on smaller items like cigars. These can be set up and printed in batches, making it easy to label when new shipments arrive.
Labels not only speed up the checkout process, they also keep inventory up to date by tying your custom barcode to inventory entries.
While built-in customer loyalty isn’t specifically a tobacco point of sale feature, it is a key feature to look for when evaluating systems. Some POS systems require a separate paid plug-in for customer loyalty or only include it at certain pricing tiers.
But take it from us: Do not sleep on your customer loyalty program! Customer loyalty programs are a great way to incentivize repeat purchases by giving customers redeemable points and to collect customer contact information for sales history analysis and direct marketing.
This might sound complicated on the surface, so let’s break it down:
A well-run customer loyalty program makes all the difference when it comes to setting yourself apart from the competition.
Running regular tobacco store promotions and discounts is essential to bring in new customers and keep old ones coming back for more. But discounts can cause chaos and stress if they aren’t easy to set up.
Make sure different styles of discount — whether it’s buy one, get one (BOGO), mix and match, or a fixed percentage off — are easy to configure on your POS backend. This ensures that promotional pricing applies automatically at checkout, without staff members having to manually track and set it up.
You can also configure your touchscreen UI for quick access to ad-hoc promotional pricing and discounts (e.g. “10% off for customers wearing green on Saint Patrick’s Day,” “BOGO 50% off an item that hasn’t sold well”).
Flexible pricing configuration is useful for more than just discounts, though. Tobacco has complicated tax requirements at both the federal and local levels. An industry-specific system ensures you can easily set the correct tax rate for appropriate items.
Many passionate tobacco store owners already face an uphill battle when it comes to running their store. Between tariffs and inflation, strict compliance and marketing regulations, and complex inventory requirements, tobacco stores need to take every advantage they can get.
Instead of settling for generic POS systems that aren’t a good fit for your needs at best, or end up dropping you without warning at worst, invest in a specialty system with the features you need to reduce costs, improve the shopping experience, and make your day-to-day easier.
At POS Nation, we believe in matching specialty retailers like you with industry-specific solutions that help you achieve long-term success. To find your dream POS system, try our Build and Price tool today.