Community Chat

[BirkiLady]

As a customer at the same salon for a number of years, I've noticed my beautician takes my cash payments and puts the tip portion in her pocket. She places the amount for my wash, cut and blow dry in the register. However, if I pay by check or credit card she (of course) places that transaction in the register drawer. 

You know when she's paid by check or credit card, she has to pay taxes on that amount. Over the years, I've also noticed the monies in her pocket are removed to purchase colas from the vending machine, sandwiches ordered and delivered to the salon, or her kids will stop in for cash after school. You know those monies are never remembered to be taxed when she files her returns! I'm there once every four weeks. Imagine how much money "evaporates" from her pocket in a week.

She has a thriving clientele and is earning a good income. The shop is owned and operated by she and her sister. They both manage their tips in the same way. No issues there. They do not rent out chairs to other beauticians.

They are excellent beauticians and basically honest; however, this does bother me. I've always paid taxes on all income. (This year I'm really being hit with inheritance taxes, but grateful mom had invested wisely and was able to live so well in spite of her 14 years of dementia care and still have a substantial sum left over. I'll gladly pay it in April 2019.) 

Therefore, I usually charge both the service and an excellent tip. I also give her birthday and holiday gift certificates. Seems like the fair way of paying for my hair services and keeping my values intact!  

[NYC Susan]

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@Patty Pooh wrote:

Hey, a tip is a tip. If you don't want it om my card - you might just be out of luck. Beggars can't be choosers.  

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I've been seeing this policy for years.  It doesn't make much difference to me because I nearly always tip in cash.  I want to be sure that the money I intend to leave for a tip goes where it's supposed to.

I would never not leave a tip because of a policy like this.  The employees are not the ones who institute the policy, and they shouldn't be penalized for it.

[NYC Susan]

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@QueenDanceALot wrote:

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@Patty Pooh wrote:

Hey, a tip is a tip. If you don't want it om my card - you might just be out of luck. Beggars can't be choosers.  

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@Patty Pooh

People who provide you with a service are Beggars?

You must be delightful to serve.

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"Beggars can't be choosers" bothered me too.  It's very demeaning.  These are people trying to earn a living.  They don't deserve to be referred to in that way.

[NYC Susan]

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@suzyQ3 wrote:

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@wildcat fan wrote:

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@Tinkrbl44 wrote:

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@Patty Pooh wrote:

Hey, a tip is a tip. If you don't want it om my card - you might just be out of luck. Beggars can't be choosers.  

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@Patty Pooh

???   Beggars can't be choosers?  Seriously?

We go in for a manicure and our payment actually splits to two different parties .... the salon, and the manicurist. 

 First, why should the salon pay taxes on the manicurists' income?   Secondly, I'm betting that the salon would want to tally things up "later" and the manicurist (or whomever) wants their tip money at the time of the transaction ... and they shouldn't have to wait for it.

Keeping tips separate isn't new, and it's more efficient.   Who doesn't have even a few bucks on them when they go out?    Paying the tip in cash is no big deal, IMO.

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Responding to the last couple of sentences:

If I tip 20%, that's more than a few bucks...more like $35.  For me it is a big deal because it means I have to add extra time to my schedule to go wait in line at the bank or go buy something at the store just so I can get cash back.  Tipping on a card is a convenience service, but if it's not offered at a local salon it's a big enough deal for me to find another one.  

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@wildcat fan, I both agree and disagree. :-)

I tip my stylist $25. I'm not big on carrying cash; I prefer using a credit card.

But if a salon wants to keep the tip separate, I'll either add the tip to the charge and give the cash to my stylist, if the salon allows that; or I will just make sure always to have the cash with me.

Having found a good stylist, I wouldn't let anything stop me from being a customer.

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I feel the same way.  If I'm happy with the stylist (or whoever), I'm fine paying however they prefer.  As long as I know in advance, it's not a big deal to me.  (I can't remember ever being blindsided by "no credit cards" or "cash only" or anything like that ever.)  If I'm happy with the results I get (hair, eyebrows, whatever it happens to be), I wouldn't let preferred method of payment keep me away.

[ReturnToSender]

Not long ago we were told we could no longer tip on our card at a restaurant we frequented. We didn't have cash so guess who didn't get a tip? We also never went back. I wonder how that's working out for them.

[shoekitty]

One  reason for tips not being put on the credit card, or any card is usually the stylist has her own chair.  She rents chair or station.  She can use the salon to run charge through, minus the tip.  If they added tip in it would look like the salon was making more than it does.

They could do extra book work, separate the tip from amount service, but it is a lot of work.

Also, every time you use credit card, or debit card there is a fee to salon.  It is part of doing business.  But to add tip  onto service, 3% or so would be take out for fee.

most salons keep all charges separate.  They are not paid hourly.  I have been in many salons,  and spas, that have a separate tip drawer.   When tips are not given directly to stylist, they are given end of day, or next day.  Many salons collect the tips, and report it to IRS that way.

in some devious salons when tips were added to credit card, stylist never got them or the owner took a cut of tips before giving to stylist.

most tips are reported.  IRS knows you are in a tipping business, they expect a certain amount of wages to be tipped.

where my granddaughter works.  All tips by credit card or cash go through main cash register with your name on ticket.  She picks up her tips next work day in cash. The management reports all tips to IRS.  

I can tell you the number one reason for cash tips is book keeping. They might not report a few bucks, but most are reported.  

[shoekitty]

No one takes checks any more. So, if they want the tips and services separate and don't want tips on credit card,how else would one pay?   Life is either card or cash. 

[SunValley]

Yes, how tips are handled depends on the business relationship between the stylists and owners, depending on if they are self employed or considered employees.

At my salon all the stylists are self employed. They pay chair rent to the owners and the stylists are all paid for services and tip directly by their clients. (Product is paid for separately as that is sold by the salon.) The IRS has assumed a specific % that must be declared as tips for self employed stylists. The salon owners pay business taxes based on chair rental income and product sales for the business.

If the stylists are direct employees of the salon, they will receive a W-2 from the salon. How tips are handled is up to the employer (by stylist or pooled and shared, etc.)

[NYC Susan]

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@ReturnToSender wrote:

Not long ago we were told we could no longer tip on our card at a restaurant we frequented. We didn't have cash so guess who didn't get a tip? We also never went back. I wonder how that's working out for them.

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You punished a server who had nothing to do with the decision to only accept cash.  

[Hoovermom]

Ultimately, I believe the small business owners will be questioned about the amount of tips that given to employes in cash if they are audited.  Not all employees report cash tips to their employer.  

We are a credit card family and haven't encountered this problem in my area yet.