Dear friends future DIL works as a manicurist for her familys' business. They own 6 nail salons. All family members work in the salons but none draw a salary; they live on tips. She's in college full time and this fits in with her schedule. Tips are to be paid in cash only; no exception. The employees are responsible for their own taxes including tips. Why? They rent a station and are considered and treated as independent contractors. I don't know to whom or how the overall profit from the salons is dealt with but that's how it works.
My stylist owns her own salon and she's the only one in it (which is what she wants),. When she worked for a large well-known chain salon in my mall, you used to have the option of placing the tip on your CC when you paid your bill. One day, it changed. My thing was perhaps what I was having one visit wasn't what I was having the next visit so tipping was never the same and there was no ATM in that entire wing of the mall. People weren't happy. I asked her one visit why it changed. Surprised me with the reasons:
*Fee charged to the salon which the salon had to eat.
*Stylists are independent contractors and rent a chair. Sometimes 2 stylist use the same chair so they get a cheaper fee (very common for someone just starting out). Therefore, they are responsible for all taxes including that on their tips so the the salon couldn't "eat" the fee (that would make the stylists employees and change the whole taxing situation).
*Since you had to "cash out" from the drawer, the salon had to keep a lot of cash on hand. This meant making sure the drawers balanced out. They had issues with "sticky fingers". Also, the customer would tell the front desk "give Sue $25" and Sue might only get $15....but the customer was charged $25. Since stylists were not tipped out until the end of the night when the receipts where tallied (or they would pick up their tips when they came in for their next shift) they didn't know who was giving them what...it wasn't itemized. You can see why if it's a very busy salon. (this one was).
These, among other reasons (which made sense as she listed them) were the reason the salon and the employees decided that cash only tips was the way it was going to be. The customer brings in their cash and gives it directly to the stylist and that's that. Since my stylist is the only one in her salon, she prefers tipping be done with CC; works for me!
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