Remember the days when clients paid for their service, then popped back over to their stylist’s chair to discreetly hand over a tip?
The stylist immediately saw who was giving them the cash and how much was being given.
But now, customers who carry cash are few and far between. Instead, they rely on credit cards or use an app like Venmo to tip their stylists—eliminating the tipping moment between stylist and guest. And the result is a smaller tip.
“Customers figure stylists won’t know who the tip is coming from, so they shave a little off what they used to give in cash,” says David Tashjian, CEO/president of Tippy.
Bringing Back the Personalized Tip
Tippy, the digital tipping platform for salons and spas, has found a way to make technology personal.
“When a customer uses Tippy, they see a photo of their stylist, and understand the stylist will get instantly notified,” Tashjian says. “And when the stylist gets the notification, it tells her which client tipped and how much.”
This simple method for tipping is convenient for both parties, and for salons using Tippy, results in an average tip that’s 22 percent higher.
Scott Sharkey, CEO and co-founder of Sharkey’s Cuts for Kids, with dozens of locations across the country, says his company’s recent transition to Tippy has been smooth.
“Our software, Salon Ultimate, presented Tippy to us,” Sharkey says. “Since we started using it as a brand, tips are up 22-30 percent.”
While that’s great news for his stylists, Sharkey says it also gives him an advantage in a tight labor market.
“When you’re trying to recruit people, bigger tips are an added benefit,” he says. “Tips come into play when you’re negotiating hourly wages.”
Venmo No More
Sharkey was also motivated to move onto the Tippy platform so he could get his stylists away from accepting tips through Venmo, which has become a cashless, convenient way for clients to tip stylists in recent years.
“Traditionally, Venmo didn’t report any transactions until you were at $20k,” Tashjian says. “But the government changed the law this year and everything will be reported once you hit $600 gross. If the IRS repeatedly sees $7 or $8 coming into your account, they will know they’re tips and come after you.”
Anyone using Venmo will get a 1099k from the IRS and many stylists won’t know until it’s too late that they owe taxes on all the tips they collected.
“We’re trying to get as many people as possible off Venmo so they aren’t caught off guard come tax time,” says Tashjian.
Better for Clients, Better for Stylists
For clients who don’t carry cash, Tippy is an easy way to provide a personalized tip to their stylist. And for stylists, Tippy provides a debit card that makes their tips instantly accessible.
“If they get a tip at noon, they can go next door with their debit card and buy lunch at 12:01pm,” says Tashjian. “We offer a network of ATMs nationwide that are free, too.”
While the money is accessible, it’s also visible.
“Stylists see their tips accumulating in their app,” Tashjian says. “With cash, it’s spent quickly and they forgot they ever had it. When stylists see it adding up, they start saving, which is a key benefit.”
Sharkey loves it because it’s another opportunity to deliver top-notch customer service.
“Our customers don’t have to use Tippy—they can still use cash,” he says. “But they have the option.”
To learn more about integrating Tippy into your software, visit meettippy.com.
Originally posted on Salon Today