How to accept cash-less tips at your salon or beauty parlor.

You and your salon or beauty parlor staff work very hard for every cent you earn helping your customers to feel and look their best. It should go without saying that you deserve to be rewarded for your artistry and expertise in the form of generous tips from your customers. But as cash becomes a thing of the past, precisely what can you do to enable your clients to give you the gratuities you deserve?

Advantages of going cashless.

Now that most people have their mobile phones with them at all times, they are feeling encumbered by bulky wallets stuffed with bills and coins. Many people are even getting to the point of leaving their credit cards behind, assuming that they can use their smartphone’s digital wallet feature to make contactless payments with merchants’ compatible readers. Here are just some of the reasons you should embrace cashless payments at your salon or beauty shop.

• Increased efficiency. Non-cash transactions with credit and debit cards, contactless and digital payments can be processed much more quickly. When guests fumble around to gather change and count bills, it can be frustrating for everyone involved. What’s more, the delay can prevent you from serving other customers.
• More accurate accounting. Counting cash leads to more bookkeeping mistakes, which can quickly add up to big problems for your business. By contrast, a point of sale (POS) system that accepts cards and contactless payments records each purchase and seamlessly integrates with your accounting software to promote precise outcomes every time.
• Lessen your vulnerability to crime. Possessing a lot of cash is an open invitation to criminals. Reducing it (or eliminating it altogether), not only saves you from those annoying trips to the bank but also makes you much less susceptible to run-ins with shady characters.

All of these advantages are compelling, but you probably still are asking: Is tipping still possible in a cashless shop?

Ways to keep the tips flowing.

As you well know, hair stylists, nail technicians, massage therapists, and aestheticians rely on tips to supplement their relatively small base incomes. As the owner, it is in your best interests to do all you can to ensure that your valued staff receives the monetary recognition they deserve to keep your employees happy and motivated to work for you and provide excellent service to your customers. Fortunately, there are things you can do to promote cashless tipping.

• Absorb the added cost of adding tips to credit cards. Studies show that customers tend to give higher tips when they pay using a credit card. However, most payment processors charge a fee for gratuities, leading many salon and beauty parlor owners to forbid tipping on plastic. Instead, they request that any additional gratuities be provided in cash. While this may be cost-effective in the short term, it will not make your staff happy since cash is rapidly losing popularity. You may want to consider thinking of those fees as just another part of the cost of doing business.
• Peer-to-peer apps like Apple Pay, Cash App, Zelle, and Venmo. If you set it up so that each staff member directly receives the payments into their personal app accounts, you will remain in compliance with the apps’ prohibitions against using them for business purposes. It should be noted that Venmo now has rolled out a separate platform designed for business owners. Although it is not free, per-transaction fees are affordable.
• Add a gratuity to the cost of each spa or hairdressing service that you provide. Make it clear to your customers that you have adjusted the service pricing to reflect what they were already tipping separately, and of course be sure to compensate each staff member accordingly. Be ready for potential extra scrutiny from the IRS, which may question whether your policy is actually being put into practice. Careful documentation and bookkeeping, as well as prominent displays of your no-tipping policy, should help to offset any problems.
• Use a POS system for beauty parlors and salons that integrates with a tipping app. Many of these products open directly into the customer’s mobile internet browser, eliminating the need to download an app. Clients simply tip from anywhere using their preferred payment options. As the owner, you can even use the app to set up automatic tip distribution. All while seamlessly integrating with external social media sites to manage ratings and reviews, and easily connect with your payroll software to keep your funds organized.

Going totally cashless isn’t for every business; in fact, it is illegal in some cities. However, you must come to terms with the reality that electronic payments are here to stay. By keeping in step with this fact by finding ways to accept cashless tips, you will elevate employee morale and ensure that everyone is fairly compensated for their amazing work.